April 30, 2010, 12:20 PM — While the lousy economy of the past two years certainly hit retailers hard in the form of slow business, many stores had another problem to contend with as well: Increased theft. 2009 created "the perfect storm in retail shrink," according to Derek Rodner, vice president of product strategy at Agilence, a maker of retail loss prevention products.
"The economy wasn't doing well, and because business took a hit, retailers stopped spending on new projects and on any unnecessary expenditures--and a lot had to lay off non-essential employees."
Also see retail fraud -- investigative tactics and strategies for practical tests of retail employee honesty and service quality, plus a sample "shopping investigation form"
That meant putting enough eyes in the store to prevent shrink became more difficult. These factors, coupled with many out-of work and desperate people turning to theft for profit, caused worldwide shrink to rise to $114.8 billion dollars in 2009, a $10 billion dollar increase since 2008, according to the Global Retail Theft Barometer.
"Theft is always a problem, but became exacerbated in this climate," said Rodner.
But retail theft has changed in the last few years. Smash and grabs or hiding stolen items in a bag are no longer the most common ways con artists rip off retailers. Now a fair amount of shrink comes from internal fraud, as well as organized retail crime. Rodner laid out the most common ways tech-savvy criminals are getting away with goods today.
Web sites like Grocerygame.com are hugely popular with shoppers. Sites like this allow people to find coupons and big sales and then time their purchases so they make off with huge savings. But the popularity of online coupons has also spawned an explosion of counterfeit discounts, too, according to Rodner.
While you may be thinking a few cents here and there sounds like no big deal, fake coupons are a huge problem for grocery stores, where the profit margin is very small--usually only between one and two percent annually. Rodner referenced one client who lost over $150,000 in just a few days thanks to one counterfeit coupon.
"With that slim of a profit margin, anything that causes loss to the company has dramatic impact to the bottom line," said Rodner.
Self check-out lines have become common in grocery chains and even in some drug and department stores. While research finds a fear of making a mistake causes most people to try and be MORE honest using self checkout, their good intentions make it easy to steal for thieves.