What Does Shoplifting Do to Store Prices? (2024)

You might assume that, because shoplifting is a common problem in retail stores, store owners simply absorb the costs associated with inventory lost through shoplifting. However, store owners typically pass on the costs of shoplifting to consumers in the form of higher prices. Store owners incur several costs that can raise how much a consumer pays for retail goods.

Lost Profits

When a store visitor shoplifts a retail item, the store must recover the entire cost of the item, rather than the store's profit margin on the lost inventory. The amount the store must recover depends on the store's profit margin and the cost of the shoplifted item. For example, grocery stores commonly operate on a 1-percent profit margin. This means that a grocery must recover $100 for every $1 worth of shoplifted inventory, according to Rutgers University. The high cost-per-dollar is typically distributed across the pricing for the store's remaining inventory.
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Marketing

A store may sell additional items to recover money lost through shoplifting instead of directly adding its costs to retail goods. However, it must engage in additional advertising to attract more customers or upsell additional items to existing customers. The store must recover its additional marketing costs through increased revenue, typically in the form of higher prices, to avoid decreasing its profit margin.

Anti-Shoplifting Measures

A retail store owner can install surveillance equipment throughout a retail store and place detection gates at store exits to help reduce shoplifting. Retail stores can also hire security personnel to apprehend shoplifters detected by surveillance equipment. Although these measures may help minimize shoplifting losses, the store must bear the expenses of installing and maintaining surveillance equipment, as well as payroll expenses for security personnel. The store must typically increase retail prices to offset these expenses.

Legal Costs

Prosecuting shoplifters may help discourage future shoplifting. Although laws vary by state, shoplifting is considered a crime and is typically punishable by fines. In most states, shoplifting goods worth more than a specific amount is considered a felony and may result in imprisonment. However, retail stores must bear the court costs and attorney fees associated with prosecution. The store may pass these costs on to consumers through higher retail pricing.

FAQs

What Does Shoplifting Do to Store Prices? ›

Lost Profits

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Does shoplifting cause prices to increase? ›

Experts caution that uncontrolled retail theft could eventually drivel broader inflation if left unchecked. As the costs of business risk, security measures and inventory shrinkage get passed through supply chains in the form of higher prices, a self-perpetuating loop results.

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What are the effects of shoplifting on stores? ›

The reduction of staff or wages for employees when stores lose profits. The loss of community jobs when stores are forced to close. The loss of state and local sales tax revenue for local programs and services. The added burden on the police and the courts.

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What does shoplifting do to the economy? ›

Shoplifting results in higher prices and unemployment due to business losses and failures; it ultimately affects wages, the job market, and the cost of living.

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How much money do retailers lose due to shoplifting? ›

Stores lost about $86.6 billion to retail theft in 2022, but that includes employee theft as well as external theft.

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Why can't employees stop shoplifters? ›

Taking the law into one's own hands can have severe legal consequences for employees and the store. If an employee detains a suspected shoplifter without proper authority, they may be held liable for assault, false imprisonment, or other criminal charges.

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What do stores do about shoplifters? ›

Retail stores commonly use signage to make thieves extra aware that the store has taken anti-theft measures. These signs usually inform people of installed cameras, whether the store is part of a local anti-theft group, and that shoplifters can expect to be prosecuted.

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Can stores detect shoplifting? ›

To detect shoplifting even more accurately, artificial intelligence (AI) has enhanced the effectiveness of existing systems. Based on already installed cameras, anti-theft devices and walk-through detectors, intelligent video surveillance can further reduce the risk of theft.

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What do shoplifters steal most? ›

Clothing and fashion accessories are among the most commonly shoplifted items in retail stores. Shoplifters often target high-end brands and steal designer clothing, handbags and shoes.

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Do stores build a case against shoplifters? ›

In many cases, stores have actually instructed workers to not interfere in minor instances of theft. Instead, they ask the employee to report it to store safety personnel who then build a case against the thief.

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What are 3 facts about shoplifting? ›

According to NASP, both men and women shoplift in approximately equal proportion. Moreover, about 25% of shoplifters are underage. Among adult shoplifters, 55% say they started shoplifting in their teens. Most shoplifters do not commit other types of crimes.

Is shoplifting getting worse? ›

Data on reported commercial shoplifting—defined under Proposition 47 (2014) as entering a commercial establishment with intent to steal property valued at less than $950 during business hours—failed to reveal evidence of increases until 2022, when the state saw a 28.7% jump from the unusually low rates of the pandemic ...