Retail theft on the rise, and it could cost consumers, too
- National Retail Federation: Retail shrink amounts to a nearly $100B issue
- More stores adding return fees and restock charges to recuperate losses
- 79% of consumers believe retail theft impact prices of goods they purchase
store security monitor with shoplifter caught in the act
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CHICAGO (NewsNation) — Organized smash-and-grab incidents and retail theft are wreaking havoc on retail establishments, with department stores being stripped of their merchandise. It’s not just costing retailers, it could soon cost consumers, too.
According to the National Retail Federation, the retail shrink cost retailers a combined $94.5 billion in 2021, up from $90.8 billion in 2020.
Retail giants such as Target are grappling with unprecedented levels of aggressive theft. Target CEO Brian Cornell recently disclosed that the company saw a 120% increase in theft incidents involving violence or threats.
Now, retailers like Dick’s Sporting Goods and Macy’s are highlighting theft as a paramount issue. They attribute it to a significant factor behind dwindling profits.
Experts predict that consumers will ultimately bear the brunt of this solution.
Things such as tightening return policies or introducing charges for returns, which were previously free, and implementing restocking fees, seem to be the initial steps taken by retailers aiming to recover from the losses they’re facing.
As per a survey conducted by the National Retail Federation:
- More than 64% of consumers express worry about gang-led shoplifting occurring in their community
- 75% of consumers have experienced shopping at stores where products were secured in locked cabinets to deter theft
- 79% of consumers believe that retail theft has an impact on the pricing of the products they purchase
The increasing practice of locking up products in stores has diminished the attractiveness of shopping at physical retail locations.
“Well it’s certainly not fun,” said University of San Diego finance professor Dan Rocato. “We can understand when our Crest White Strips are locked away, but when it’s our Crest toothpaste that gets locked up it’s certainly not fun. The shopping experience is degraded overall when the items you and I want to purchase are behind glass cases.”
Target anticipates a potential loss of up to $1 billion this year due to unaccounted inventory, a notable increase from the $700 million reported the year prior.