Fraud and theft incur more than half billion dollars in losses
from Quebec retail stores

Findings of a survey conducted by the Conseil québécois du commerce de détail (CQCD) in co-operation with Géocom Recherche Inc.

For immediate release - Montreal, September 18, 2002 - An important survey conducted by the Conseil québécois du commerce de détail/Retail Council of Quebec (CQCD) in co-operation with Géocom Recherche Inc. finds that Quebec retailers have suffered more than 635 million dollars in losses in 2001.

CQCD found that shoplifting and customer frauds result in daily losses of approximately $1,026,000 whereas thefts by employees create losses of over $415,000 a day.

Retail chains and independent retailers operating in Quebec, not including car dealerships, were surveyed from June to August 2002. The data provided by the 362 respondents to the survey, whose sales reach more than 9 billion dollars and employ 72,000 persons, was analyzed. The survey covers more than 18% of the Quebec work force in this sector, which is approximately 400,000 people in the retail sector.

Objectives

The objectives of the survey were to:

• Determine the losses incurred by Quebec retailers in 2001;
  
  
• Identify the policies and procedures set forth by retailers to protect themselves from losses resulting from shoplifting, theft by employees, administrative errors, fraud, errors made by suppliers and vandalism;
  
  
• Estimate the losses related to shoplifting and theft by employees.
  

Key Findings

The average loss on gross sales for all respondents was 1.5% in 2001, compared to 1.3% in 2000, which represents a 0.2% increase.

All major sectors of activities incurred losses near the mid range percentage of 1.5% of total annual retail sales of 42.4 billion dollars.

Shoplifting, main cause of losses

Out of the 635 million dollars of losses incurred by retailers in 2001, more than 526 millions are attributed to shoplifting, consumer frauds and employers thefts and 109 million dollars to administrative errors, frauds and vandalism. The survey shows that:

• 59% of total losses are related to shoplifting and consumer frauds;
  
• 24% of total losses attributable to internal theft and
  
• 17% to administrative errors, suppliers fraud and vandalism.

It is however of interest that the survey shows a different allocation of these losses when we consider retail chains and independent retailers.

Retail chains attribute a more significant proportion of losses to internal theft (31%), while independent retailers estimate that losses due to shoplifting and consumer frauds represent a hefty 79% of their total losses.

"This allocation difference between retail chains and independent retailers can found an explanation in part by the fact that retail chains have a greater number of employees and therefore are more at risk with internal theft, furthermore retail chains have a vast array of preventive means at their disposal. Conversely, independent retailers have less resources and are more exposed to shoplifting", says Me Gaston Lafleur, President of CQCD.

Theft is increasing

While independent retailers consider that the number of incidents relating to theft, fraud and vandalism were stable, 12% of those respondents indicated an increase between 2000 and 2001; retail chains, on their part, indicated by a proportion of 33% that they noticed an increase in incidents relating to theft, fraud and vandalism between 2000 and 2001.

Preventive measures

The most common preventive measure used by respondents to the survey is training and awareness programs to employees.

Other means used are associated to surveillance systems, alarm systems and monitoring and control procedures.

Preventive means are still today the best avenue to address this major problem in the retail industry, however, the survey leads CQCD to draw certain conclusions on the need to consider sensitization measures to the public on our values as a society.

"As a leading association of the retail industry in Quebec, the CQCD will, in the months to come, initiate an action plan in order to address these issues to the population and establish cooperations with other partners concerned by this problem with the objective to sensitize Quebecers and help retailers in their preventive efforts", concluded Me Lafleur.

At the outset, consumers as well as retailers are loosing if no efforts are done to try to diminish shoplifting and internal theft.

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CQCD's mission is to advocate and promote the interests of the retail sector and its members to ensure the development of the retail sector in Quebec. The retail sector in Quebec represents annual retail sales of over 63 billion dollars, 50,000 commercial establishments and employs over 400,000 people.

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