Losses from in-store retail fraud rise 2,000 per cent in 2024
Reports of in-store retail fraud rose by 545 per cent in the first six months of 2024 compared to 2023, while losses rose an estimated 2,000 per cent, according to new data.
Figures from the NFIB Fraud and Cyber Crime Dashboard showed that in-store losses widened from £258,000 in 2023 to £5.4m in 2024.
The real number is likely even higher as only a third of crime incidents at retailers were reported to the police last year, according to the British Retail Consortium (BRC).
Retail fraud examples included consumers returning stolen items for legitimate ones or switching a price tag before paying.
According to accounting company RSM, more people have been turning to fraud to make ends meet as the cost of living has spiked.
Consequences for crime, too, are not particularly stringent, reducing the cost of theft.
Police did not respond to 71 per cent of serious retail crimes in 2023, according to a freedom of information request made by Co-op last year.
Earlier this year, return management platform Loop found that around 38 per cent of UK shoppers engaged in return policy abuse or fraudulent behaviour in the past year.
“Return policy abuse and fraud pose an enormous challenge to retail brands,” Hannah Bravo, Chief Operating Officer at Loop, said at the time.
“There is still so much more work to do to reduce the impact of returns fraud and abuse on merchants’ bottom lines while retaining their best customers… To achieve this, retail brands need partners with deep expertise and true customization engines powered by broad data sets and machine learning,” she added.
Naveed Islam, Chief Information Security Officer at card payment provider Dojo, which analysed the data, said: Where possible, businesses should set aside a budget for fraud protection training to help staff feel confident to recognise common fraud tactics such as suspicious behaviours and counterfeit returns.
This shouldn’t be a one-time-only tick-box activity. Businesses should provide ongoing training and regular updates to ensure staff are aware of the newest trends that fraudsters use,”
Improved data analytics and CCTV coverage, too, have both been touted as potential solutions for retailers.
Small businesses more at risk of fraud
SMEs could face more retail fraud due to “not having enough budget to invest in fraud detection for staff”, Dojo said.
A professional certificate for fraud prevention costs around £2,000 per person.
“Alongside this, small businesses tend to build closer relationships with customers that fraudsters could take advantage of,” Dojo added.
Around half of small businesses in England and Wales – about 2.54m firms – have experienced at least one business crime in the previous two years, according to the Federation of Small Businesses (FSB).