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Retail crime reaches record £603m

The direct cost of retail crime has reached the highest level in a decade at £603m, according to this year’s British Retail Consortium Retail Crime Survey.

The report found that the average value of each in-store theft across the total UK retail sector increased by 36% to £241 per incident for 2013-14.

The vast majority of retailers also reported suffering increasing levels of fraud, most of which is now committed online.

The respondents said they expect fraud to pose the single most significant threat to their businesses over the next two years.

“It is clear that retailers are facing an increasingly sophisticated criminal,” said BRC director general Helen Dickinson. “Despite an average investment of £2m per business in crime and loss prevention, retailers need help and support to respond to the threat. Police and crime commissioners should follow the lead set by the Mayor of London and work with retailers to develop dedicated business crime strategies to help tackle this growing problem.”

The report found that there were an estimated 3 million offences against UK retailers in 2013-14 and, although the volume of shop theft offences declined by 4%, the average value of each incident increased from £177 to £241.

Fraud increased by 12% during the period and accounts for some 37% of the total cost of retail crime. An estimated 59% of fraud was committed by organised groups.

There were 32 incidents of violence and abuse per 1,000 employees in 2013-14.

Readers' comments (2)

  • They should add pre-pack administration to these figures - A retail crime if ever there was!

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  • As retail crime grows, its subset, returns fraud continues to grow with it. From wear and returners, deliberately damaged goods, goods relabeled to appear as the retailers, right through to customers returning fakes, our analysis at Clear Returns shows returns fraud escalates dramatically over time if undetected.

    Returned fake or used product doesn't only effect product availability and spoilage rates, it can get back into the hands of a loyal customer who had paid to own a new, clean and genuine item.

    Returned fakes are a double whammy, because not only is the original stock lost, a credit card is refunded and the stock re-enters the supply chain in genuine packaging. This occurs because warehouse staff are unlikely to be sufficiently trained to recognise fakes, particularly where dealing with multiple brands they may be unfamiliar with.

    However, to successfully intercept fraudulent returns, a shift in the way we view the right to return is needed. Not every single customer should be given the option to return product however and whenever they want.

    Existing policies for rejecting returns should be enforced. Risked scores can be used to prioritise inspections and ultimately, return responses need to be tailored to a customer's history. A 'one size fits all' policy will not work for retailers looking to combat exploitation and returns fraud will only end up escalating.

    Vicky Brock, CEO, Clear Returns

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