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BizReport : Ecommerce : July 17, 2020

Study: Retail fraud skyrocketing

Retail shrink is at an all time high according to new data out from the NRF; according to their report retail 'shrink' is up by $11 billion (2018 to 2019) and now totals $61.7 billion, accounting for nearly 2% of legitimate sales.

by Kristina Knight

Merchants don't only need to worry about shoplifting from physical stores. Now 'shoplifting' is happening both online and offline, causing an even bigger security issue for merchants and brands. According to the latest National Retail Security Survey retailers believed about one-quarter (26%) of theft is happening from online purchases while nearly half (49%) is happening in physical stores. Nearly 20% of fraud is committed 'multi-channel' including buy online/pick up in-store options that retailers have rolled out to make shopping easier for consumers.

"Between an increase in incidents and new ways to steal, shrink is at an all-time high," NRF Vice President for Research Development and Industry Analysis Mark Mathews said. "Loss prevention experts are facing unprecedented challenges from individual shoplifters to organized gangs to highly skilled cybercriminals. Retailers are responding with both traditional methods and the latest technology, but this is an ongoing challenge that can only be won with the support of lawmakers and law enforcement."

According to retailers, their biggest challenges include ORC gangs (61%) and ecommerce/cybercrime (59%), but just over half (58%) say employee/internal theft is a rising issue. Shoplifting and employee theft account for about two-thirds of retailers' yearly shrink.

The shrink issue could become even more prevalent moving forward, especially in the ecommerce space, as more consumers have moved their purchases online because of the COVID pandemic. According to new Adobe data ecommerce was $77 billion higher in Q2 2020 than in Q2 2019, primarily because of the pandemic. For the first half of the year digital commerce totaled more than $368 billion.

Tags: ecommerce, ecommerce fraud, ecommerce trends, National Retail Federation, retail fraud, retail trends

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