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Wow, this quote: Organized retail crime costs retailers an average of $719,548 per $1 billion in sales, a 2020 survey from the National Retail Federation found

Wow, this quote: Organized retail crime costs retailers an average of $719,548 per $1 billion in sales, a 2020 survey from the National Retail Federation found — a nearly 60% increase from 2015. The cost of all this shoplifting is 0.7% up from 0.45%. Meanwhile, over the same period, the cost of using your credit card at home depot went up over 1% from 1.3% to 2.4%. Who is the bigger threat to your business here, really?

Y-bar 5y ago
> $719,548 per $1 billion in sales [...] The cost of all this shoplifting is 0.7% up from 0.45%. Wouldn't that be 0.072%?
- somenewaccount1 5y ago
  yup. they are installing trackers and justifying it with nearly inconsequential losses. patriot act all over again.
oehpr 5y ago
wait... are we sure we're reading these numbers right? that $1 billion. is that the income earned from the sale? Or is that the profit the retailer keeps all told? As an example, how many chainsaws does Home Depot have to sell before it pays for the theft of one chainsaw? I would assume much more than one. I think the NRF are just listing the sum MSRP's of legitimately sold items vs stolen items. You can't just divide that to get the "portion of harm"
- ChuckMcM 5y ago
  I agree that there are a number of sources of possible error, from the retailer to the reporter that is summarizing from a much larger report. That said, the computation of 'shrinkage' has been defined as MSRP of products that are stolen and/or damaged, divided by the gross sales of all products. The number captures "lost" revenue. My nephew, who is working at a large nationwide retailer and has access to all of this data for their stores, has told me in the past (and I presume it is still true), that the largest component of "loss" experienced on the retail side is through employee theft, either directly, or by assisting a partner to evade the payment systems. The smallest portion of this loss is from people who come into the store and take merchandise without paying for it. The "interesting" thing about that story, is not that it makes it harder to sneak out a tool, but that it requires a register transaction for that tool to work. Combined with inventory management of that tool, internal theft rings are uncovered because the employee facilitating the theft has to use their register to do so. But the stores won't tell you that of course. Just like back in the day getting out of a Fry's Electronics was like being released from a SuperMAX prison lockup with all the gates and checks and re-checks. They too were much more worried about employee theft than individuals stealing stuff.
MattGaiser 5y ago
> Meanwhile, over the same period, the cost of using your credit card at home depot went up over 1% from 1.3% to 2.4%. Did it? I suspect that large retailers like Home Depot can negotiate substantially on the credit card fees.
- handrous 5y ago
  Can absolutely confirm that these numbers are negotiable. If you have any amount of scale, ask your processor (places like Stripe or Authorize.net or PayPal for online CC processing). Just bringing it up with sales or customer service, without even having a competing offer, might well get you a "gimme" amount off the public figure. And do shop other providers, if you're processing even tens of thousands a month they might make you a better offer than what you're getting and than the public prices.

Y-bar 5y ago

> $719,548 per $1 billion in sales [...] The cost of all this shoplifting is 0.7% up from 0.45%. Wouldn't that be 0.072%?

somenewaccount1 5y ago
yup. they are installing trackers and justifying it with nearly inconsequential losses. patriot act all over again.

oehpr 5y ago

wait... are we sure we're reading these numbers right? that $1 billion. is that the income earned from the sale? Or is that the profit the retailer keeps all told? As an example, how many chainsaws does Home Depot have to sell before it pays for the theft of one chainsaw? I would assume much more than one. I think the NRF are just listing the sum MSRP's of legitimately sold items vs stolen items. You can't just divide that to get the "portion of harm"

ChuckMcM 5y ago
I agree that there are a number of sources of possible error, from the retailer to the reporter that is summarizing from a much larger report. That said, the computation of 'shrinkage' has been defined as MSRP of products that are stolen and/or damaged, divided by the gross sales of all products. The number captures "lost" revenue. My nephew, who is working at a large nationwide retailer and has access to all of this data for their stores, has told me in the past (and I presume it is still true), that the largest component of "loss" experienced on the retail side is through employee theft, either directly, or by assisting a partner to evade the payment systems. The smallest portion of this loss is from people who come into the store and take merchandise without paying for it. The "interesting" thing about that story, is not that it makes it harder to sneak out a tool, but that it requires a register transaction for that tool to work. Combined with inventory management of that tool, internal theft rings are uncovered because the employee facilitating the theft has to use their register to do so. But the stores won't tell you that of course. Just like back in the day getting out of a Fry's Electronics was like being released from a SuperMAX prison lockup with all the gates and checks and re-checks. They too were much more worried about employee theft than individuals stealing stuff.

MattGaiser 5y ago

> Meanwhile, over the same period, the cost of using your credit card at home depot went up over 1% from 1.3% to 2.4%. Did it? I suspect that large retailers like Home Depot can negotiate substantially on the credit card fees.

handrous 5y ago
Can absolutely confirm that these numbers are negotiable. If you have any amount of scale, ask your processor (places like Stripe or Authorize.net or PayPal for online CC processing). Just bringing it up with sales or customer service, without even having a competing offer, might well get you a "gimme" amount off the public figure. And do shop other providers, if you're processing even tens of thousands a month they might make you a better offer than what you're getting and than the public prices.