On 20 January 2015, the British Retail Consortium (BRC) reported that retail crime in the UK had reached its highest level for ten years in 2014. Shoplifting, cybercrime and fraud cost retailers more than £600m, in spite of businesses spending an average of £2m each on crime and loss prevention measures.
While the volume of offences decreased over the past twelve months, an increase in the value of each incident – up to an average of £241 – ensured that the total cost of retail crime rose by almost 20% year-on-year.
The BRC‘s report attributed this to the increasing impact of organised gangs. With criminals becoming increasingly sophisticated, and their impact increasingly damaging to retailers‘ bottom lines, it is more important than ever for businesses to maximise the recovery of their losses. Here are five top tips:
Look beyond the obvious
Retailers typically focus on thefts from their high street stores and those committed by employees working in them. It is easy to overlook potential losses in other areas. Warehouses and distribution centres, for example, are every bit as much of a target for thieves – particularly organised gangs – as stores are. Meanwhile, as more and more retailers embrace e-commerce as they look to provide a 360-degree customer experience, they should also ensure they are not forgetting to pursue any revenues lost as a result of irregular online activity.
Improve reporting rates
Perhaps surprisingly, given how big a hit retailers are taking to their bottom lines as a result of criminal activity, only around 10 to 15 per cent of all theft and fraud is ever even reported, let alone recovered. To put that in perspective: if you currently recoup £300,000 worth of losses per annum through civil recovery processes, you could be missing out on as much as £2,700,000 more by not reporting all incidents.
Get business buy-in
There is no use having a civil recovery policy in place if nobody is going to put the relevant processes into action. It may be worth considering including incident reporting and loss recovery in your business‘s KPIs to ensure everyone works towards recovering losses as part of their day-to-day.
Beef up your data
Data quality is key: it is all very well identifying incidents and offenders, but if the information you submit to your civil recovery supplier is incomplete or of poor quality then you will severely hamper your prospects of recovering what you are owed. You should also remember to report each offender – not just each incident – to ensure that you maximise your return.
Don‘t forget other kinds of loss
Finally, it is not just retail crime that leads to recoverable losses being incurred. Don‘t forget overpayment of salaries, for instance: if you dismiss someone for gross misconduct, you may well find that they have been overpaid for holiday, or may owe the company money in respect of staff loans or sponsorship.
Kevin Feehan, Senior Recoveries Manager, Debt Recovery, DWF