Elkie had carefully laid out clothes that had arrived via UPS, only to notice that two of the colors she displayed were missing. Her saleslady was certain that she had not sold them. A troubled Elkie could not believe what she saw when she reviewed the surveillance tape. A youngish woman in her 20’s is seen stuffing the two items into her clothing before simply scampering out. No one seems to be immune from the latest epidemic of shoplifting which is plaguing the country. It is just out of control,” said Lisa LaBruno, an official at the Retail Industry Leaders Association. In a Business.org survey of 700 small businesses last year, 54 percent reported a rise in shoplifting and 23 percent said they were robbed daily.
Elkie’s father who founded the store in the ‘90’s told her that he could remember “maybe one or two thefts a year.” How things changed. You probably noticed that many commonly used items are now routinely locked in a showcase even such benign products like deodorant, soap, and even toothpaste. Last year a CVS official told Congress shoplifting was up 300 percent over pre-pandemic figures. Walmart’s CEO Doug McMillon warned that spiking theft could lead to higher prices and/or store closures. Retail theft reports were up 52 percent over 2021 in Philadelphia last year; in New York City, they rose 45 percent. Nearly a third of all shoplifting arrests in New York City in 2022 involved just 327 people who were arrested and re-arrested more than 6,000 times, police say.
It appears that many of these thieves have made a “business” out of their shoplifting. After they steal the goods, they simply resell on-line, even on Amazon. A bill passed in Congress now requires the large on-line retailer to request tax ID information. Last year the Prosecutors Alliance of California estimated that $500 billion worth of stolen or counterfeit goods are sold every year through online marketplaces.
The net effect of this epidemic is that it is forcing many stores to close since the losses are staggering and unsustainable. It is not only drug and beauty aid stores that are being targeted by the thieves, but even food establishments. Whole Foods shuttered a San Francisco store that had been repeatedly hit by gangs of thieves, citing fear for staffers’ safety.
The obvious answer is to improve security. Indeed, Elkie invested in sensors and sensor removing equipment that trigger an alarm. She is still traumatized by the fact that it could happen in a “safe” neighborhood like hers. Others are investing in security guards and in showcases that are alarmed. Many pharmacies now even put basic items like mouthwash behind locked plexiglass, which cuts theft at the expense of actual sales. Chains like Best Buy are locking up a growing number of items, and Home Depot and Lowe’s have introduced power tools that won’t work until they’re activated at the register.
But even the improved security has not halted the shoplifting and in many cases has prompted criminals to use violence. Safeway says it now sees regular customers walking out with unpaid items. “Some people think: Why should I pay if others are not?” Prosecutors in New York last year seized nearly $4 million in stolen goods from Roni Rubinov, a 42-year-old they said worked from a midtown office, sending dozens of “boosters” out to steal from stores such as CVS and Sephora, giving them lists of desired items.
The impact on business is enormous. Not only do businesses lose large amounts of money from the theft but they have to spend significantly to secure the items. Elkie said that her store could not afford the $42,000 for a permanent security guard. In addition, the stores are forced to raise prices and in an age where they face stiff competition from on-line sites, they become far less competitive on the street. It is estimated that retail theft costs federal and state governments nearly $15 billion in lost personal and business tax revenues, not including the lost sales taxes.
An interesting side note is the fact that stores like Elkie’s keep incidents of theft quiet. The last thing they want in the post-Covid era is to lose more customers because of a perception of not being safe.
The repercussions to the economy of the growing shoplifting crisis is beyond description. If you add to this fiasco the fallout from closed stores, the impact on the economy is as devastating as a depression. Imagine that a giant like Walmart succumbing to this widespread malaise. It is set to close all remaining locations in a major U.S. city following devastating levels of retail theft. Walmart closed its final two stores in Portland, Oregon, in March due to the thefts and disappointing performance, leaving around 600 people without jobs, another terrible result from this epidemic. Major retailers in the US have been forced to shut down stores due to millions of dollars in losses as rampant theft plagues big box stores across the country.
Stores like Target, Macy’s and Best Buy, are also considering closing stores. Target’s CFO said the company expected retail thefts to reach $600 million by the end of the year and it doubts whether it could ever make up for the losses. In 2021 retailers lost a combined $94.5 billion due to product theft. Modern technology may also be a culprit in the rising epidemic. Self-checkouts have made it easier for people to walk out without paying for items. Some retailers say that they have also been plagued by fraudulent sales due to identity theft.
Clearly, it behooves Congress and law enforcement to put an end to this epidemic. Today in most big cities, culprits receive only a slap on the wrist or nothing, quite an insignificant price to pay for what has turned out to be a lucrative business. The shoplifter of 2023 is unlike the shoplifter of even a decade ago who simply stole because they could not afford to pay for the item. Now it is society that cannot afford to let this epidemic continue.