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How Much is Theft Impacting Retail Shrink?

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How Much is Theft Impacting Retail Shrink?

Retail theft accounts for about $45 billion in annual losses for retailers these days, according to The Coalition of Law Enforcement and Retail. That figure is up $15 billion from a decade ago and has only gotten worse since the onset of the pandemic, reported The Wall Street Journal (Sept. 1).

Here’s an examination of three prominent retailers at the center of the issue:

THEFT CASES MORE THAN DOUBLE AT CVS

Retailers are spending millions of dollars a year to battle organized crime rings that steal from their stores in bulk and then peddle the goods online.

CVS Health Corp. investigator Ben Dugan noted the trend was growing every day, and the pandemic and rapid growth of online commerce continues to propel it. At CVS, reported thefts have grown 30% since the pandemic began.

Dugan’s team, which is working with law enforcement, expects to close 73 e-commerce cases this year involving $104 million of goods stolen from multiple retailers and sold on Amazon. The number of cases has more than doubled from 2020.

The company believes one network of organized professionals, also known as boosters – whom CVS had been monitoring for weeks – is responsible for stealing nearly $50 billion in products over five years from dozens of stores in Northern California.

SHOPLIFTING PERSISTANT IN SAN FRANCISCO

Dugan has called San Francisco “one of the epicenters of organized retail crime.” In May, The New York Times reported on San Francisco’s major shoplifting problem that largely resulted in the closing of 17 Walgreens stores.

At a board of supervisors hearing, representatives from Walgreens said that thefts at its San Francisco stores were four times the chain’s national average, and that it had closed stores largely because the scale of thefts had made business untenable

Employees have even been instructed not to pursue suspected thieves because encounters had become too dangerous, according to Dugan.

In June, a brazen daytime shoplifting incident was captured on video at a Walgreens in San Francisco, CNN reported (June 17). “Unfortunately, this is another example of blatant retail theft which is an ongoing problem for several retailers in San Francisco,” Walgreens spokesman Phil Caruso said in an email to CNN.

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WHY HAS THE PANDEMIC WORSENED THE SITUATION?

During the pandemic, consumers became more reliant on online shopping outlets, such as Amazon. This has also aided the shift of organized crime from flea markets and corner stores to the internet.

In particular, investigators and law-enforcement officials say Amazon is one of the biggest outlets for criminal networks, given its size in potential customers and, in an investigator’s view, insufficient vetting of sellers and listings.

Amazon “may be the largest unregulated pawnshop on the face of the planet,” said Sgt. Ian Ranshaw of the Thornton, Colorado, police department, in The Wall Street Journal. “It is super hard to deal with them.”

 

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