“Discount theft”: Shoplifting spikes in Australia as Coles, Woolworths crack down on $3.37 billion problem

The rise of self-service checkouts and retailers diverting resources to cyber security has contributed to a spike in shoplifting activity in recent years.

That’s according to a new assessment of retail theft in Australia published today, which has found shoplifting has spiked 16% in less than two years, costing the sector $3.37 billion in the 2017-18 financial year.

The study, conducted by UK-based criminologist Emmeline Taylor and supported by Checkpoint, surveyed 9,000 retail stores across Australia and New Zealand, with businesses large, medium and small accounting for a combined $95 billion in annual turnover.

Taylor’s research has tracked a worrying increase in shoplifting activity at a time when the local retail sector is already struggling to convince legitimate consumers to open their purse strings, finding telecommunications, fashion and supermarket retailers are being hit hardest.

Speaking to SmartCompany on Thursday, Taylor said the increase is being driven by multiple factors, noting the proliferation of self-service checkouts, which were popularised by retailers as a cost-saving measure but have since become hotspots for casual criminal activity.

“The entire sector is moving towards automating processes … we’re seeing increased demand for it from customers,” Taylor says.

Unfortunately for supermarkets Coles and Woolworths, which have spent tens of millions of dollars installing automated checkouts, consumers don’t mind stealing from robots.

“These individuals wouldn’t steal in any other capacity,” Taylor says. “Some go so far as to say they think it’s a bit of a game.”

“They don’t really see it as theft.”

The phenomena, known to criminologists as “discount theft”, is a persistent issue for retailers looking to decrease their shrinkage bills.

Queensland University of Technology (QUT) professor and retail expert Gary Mortimer says the increase in shoplifting activity should be read in conjunction with the rising cost of living.

“[There are] many reasons for this spike in theft — increasing household costs, less disposable incomes or unemployment will motivate some to steal, in order to provide for their families,” he tells SmartCompany.

Mortimer has been tracking retail shrinkage as an issue in Australia for some time; QUT has previously undertaken research on the problem in Australia and Mortimer says Taylor’s work lines up with previous estimates.

For Rachel Power, owner of Tasmania’s Waterfalls Cafe, shoplifting has become so bad it has prompted a re-think of everything from stocked products to the way her gift shop is arranged.

“The attitude from all thieves, not just the tourists, is one of lack of care,” she tells SmartCompany.

“If I confront them one-on-one they shrug their shoulders and hand over the goods or even deny it until I tell them I have them on camera.”

The large supermarkets are responding. Coles recently beefed up security in their self-service checkout areas, installing cameras and new gating technology, while Woolworths has taken the controversial step of adding “weighing plates” to self-service checkouts.

In recent years, law enforcement officials have also stepped up their efforts to combat shoplifting across the country, but when Taylor surveyed retailers she found only one-in-five (20%) believe the police are doing enough to combat the problem.

Also contributing to the rise of shoplifting is e-commerce, Taylor says.

That’s because retail companies have been diverting security resources to tackle emerging cyber crime threats, providing more opportunities for sophisticated shoplifting activity to occur.

“The pendulum has moved too far — retailers have taken their eyes off bricks-and-mortar stores,” Taylor says.

For e-commerce retailers themselves, theft is also a growing problem. Scott Pendlebury, owner of online home retailer Renovator Store, says instances of credit card theft are becoming increasingly common.

“What most people do not appreciate, is if a thief uses a stolen credit card or stolen credit card information to purchase online, the merchant has no way of knowing as the processing is outsourced to their merchant provider,” he tells SmartCompany.

“Eventually, the aggrieved cardholder reports the unauthorised transaction and the merchant provider takes the money from the merchant’s bank account and refunds it to the cardholder,” Pendlebury says.

“This is a large and growing problem in the online retail space, and there is little or no protection against it … the banks do not really provide any protection to the merchant.”

Taylor says theft activity is becoming more sophisticated — large resale markets have been established, for everything from stolen champagne to baby formula, which is then on-sold by entrepreneurs in China.

More than two-thirds (67%) of retailers Taylor spoke to for the study said they felt it’s too difficult to combat the growing sophistication of shoplifting activities with their current resources.

Taylor also sought the views of shoplifters themselves for the research, finding the practice is now regarded as lower-risk by criminals.

“Thieves now tell me that it’s easy to get away with petty theft,” she says.

“Reward greatly outweighs the risk.”

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