Retail theft is a growing concern that casts a shadow over small businesses across the United States. A staggering 90% of small business retailers have experienced theft at their stores, painting a grim picture of the challenges these establishments face. This issue not only affects the bottom line but also the very fabric of local communities that rely on these retailers.
Theft rates vary among small businesses, but the consensus is clear: it's a prevalent problem. For many retailers, customer theft occurs a few times a week, with some experiencing it daily. The repercussions are significant, with monthly losses ranging between $500 and $2,500 for the majority of affected small businesses. These figures show the harsh reality that theft is not just an occasional setback but a consistent drain on resources and morale.
According to Forbes Advisor, 2023 report indicates that Alabama, while ranking eighth worst in retail crime cost to business, fares better than the study average, with a loss of $305 per resident compared to the average of $449. Despite this, Alabama is among the top 15 states with the least lost tax revenue due to retail crime, at $24 per resident.
In contrast, California and Pennsylvania are significantly more affected, with California losing an average of $353 per resident and Pennsylvania topping the list with $430 lost per resident in stolen goods. Wyoming stands out as the state least impacted by retail theft, with the lowest value of lost tax revenue and stolen goods well below the study average. On the other end of the spectrum, Washington state is identified as the most impacted by retail crime.
The majority of small business retailers have experienced theft, with 85% reporting at least one incident annually. The frequency of theft has either increased or remained the same in 2023 for over half of these businesses. To mitigate losses, 64% of small business owners have raised prices, and 50% have installed security cameras. Despite these measures, 56% of retailers still anticipate theft during the holiday season, a time when 53% of small business owners report an increase in theft losses.
Employee theft also poses a significant problem, with 58% of small business retailers experiencing internal theft. Businesses employing between 21 to 30 staff members are most likely to face this issue.
Highlights of the report:
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85% of small business retailers said they experience theft at least once a year.
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Just 5% of small business retailers report never experiencing theft.
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The majority of small business retailers (79%) said their monthly losses from theft were between $500 and $2,500.
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10% said theft losses accounted for more than $2,500.
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Washington ranks as the state the most impacted by retail crime, and Wyoming is the state the least impacted.
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The state with the highest average total value of stolen goods per resident ($430) is Pennsylvania.
Internal vs. External Theft
The threat of theft comes from both outside and inside the organization. While external theft by customers is often highlighted, internal theft by employees is equally damaging. Over half of small business retailers report that current or former employees have stolen from their company.
- Just 26% of small business retailers report never experiencing internal theft.
- Small business retailers with 21 to 30 employees were most likely to experience internal theft (66%), followed by businesses with one to 20 employees (63%).
- Small business retailers with 41 to 50 employees were least likely to experience internal theft (30%), followed by businesses with 31 to 40 employees (29%).
Anticipating Theft During the Holiday Season
In response to the threat of theft, an overwhelming 98% of small business retailers have put measures in place to prevent it. These include installing security cameras, increasing prices, and implementing control systems like regular inventory counts.
- 56% of retail small business owners said they anticipate theft during the 2023 holiday season.
- The shoplifting statistics from our survey reveal that the majority of monthly losses are reported to average between $500 and $2,500 (75%).
- Retail business owners that employ 31 to 40 employees were most likely to report monthly theft losses to be between $500 and $2,500 (90%), followed by businesses that employ 21 to 30 employees (77%).
- Nearly 11% of small business retailers report monthly theft losses of over $2,500.
- Retail business owners that employ one to 20 employees were most likely to report monthly theft losses to be at least $2,501 or higher (24%).
Despite these efforts, the decision to file a theft claim with insurance or report it to authorities is complex, with concerns about time consumption, identifying perpetrators, and potential insurance rate hikes influencing the decision-making process.
Areas That Are Most Impacted by Retail Theft
Washington’s total score: 100 out of 100
Washington D.C.’s total score: 88.48 out of 100
Maine’s total score: 87.86 out of 100
Hawaii’s total score: 82.72 out of 100
Pennsylvania’s total score: 81.47 out of 100
New Hampshire’s total score: 80.29 out of 100
Minnesota’s total score: 76.41 out of 100
North Dakota’s total score: 75.71 out of 100
Missouri’s total score: 74.95 out of 100
California’s total score: 71.06 out of 100
Washington state ranks as the state most impacted by retail crime.
States That Are Least Impacted by Retail Theft
Wyoming’s total score: 0.00 out of 100
Idaho’s total score: 5.62 out of 100
Mississippi’s total score: 6.11 out of 100
Georgia’s total score: 6.94 out of 100
Alabama’s total score: 8.47 out of 100
Wyoming state ranks as the state least impacted by retail crime.
For more insights into the impact of retail theft on small businesses and the measures being taken to combat it, visit Forbes Advisor.
