How do retailers make up for losses due to shoplifting?
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Shoplifting Shoplifting (also known in slang as boosting and five-finger discount) is a popular term used for the unnoticed theft of goods from an open retail establishment. Shoplifting typically involves a person concealing a store item on their person, in pockets or under clothes (or in a bag, baby stroller, etc.) and leaving the store without paying for it. With clothing, shoplifters may put on items from the store and leave the store wearing the clothes. The terms "shoplifting" and "shoplifter" are not usually defined in law. The crime of shoplifting generally falls under the legal classification of larceny. Shoplifting is distinct from burglary (theft by breaking into a closed store), robbery (stealing by threatening or engaging in violent behavior) or armed robbery (stealing by using a weapon). In the retail industry, the word shrinkage or shrink can be used to refer to merchandise lost by shoplifting, but the word also includes loss by other means, such as waste and theft by store employees.
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Shrinkage (accounting) In accounting, inventory shrinkage (sometimes shortened to shrinkage or shrink) is when a retailer has fewer items in stock than in the inventory list due to clerical error or goods being damaged, lost, or stolen between the point of manufacture (or purchase from a supplier) and the point of sale. This affects the level of profit margins a business will be able to make. If the amount of shrinkage is large, profits go down. This leads retailers to increase prices in order to make up for losses, effectively passing the cost of shrinkage onto paying customers.
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Credit card fraud Credit card fraud is a wide-ranging term for theft and fraud committed using or involving a payment card, such as a credit card or debit card, as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft. According to the United States Federal Trade Commission, while the rate of identity theft had been holding steady during the mid 2000s, it increased by 21 percent in 2008. However, credit card fraud, that crime which most people associate with ID theft, decreased as a percentage of all ID theft complaints for the sixth year in a row.
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Receipt A receipt is a written acknowledgment that a person has received money or property in payment following a sale or other transfer of goods or provision of a service. All receipt must have the date of purchase on them. If the recipient of the payment is legally required to collect sales tax or VAT from the customer, the amount would be added to the receipt and the collection would be deemed to have been on behalf of the relevant tax authority. In many countries a retailer is required to include the sales tax or VAT in the displayed price of goods sold, from which the tax amount would be calculated at point of sale and remitted to the tax authorities in due course. Similarly, amounts may be deducted from amounts payable, as in the case of wage withholding taxes. On the other hand, tips or other gratuities given by a customer, for example in a restaurant, would not form part of the payment amount or appear on the receipt.
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Ripoff A ripoff (or rip-off) is a bad financial transaction. Usually it refers to an incident in which a person is overcharged for something, or receives goods or services not of the standard expected for the price. A ripoff is usually distinguished from a scam in that a scam involves wrongdoing such as fraud; a ripoff may be considered excessive, but not illegal.
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List of duty-free shops This is a list of duty-free shops. A duty-free shop is a retail outlet that is exempt from the payment of certain local or national taxes and duties, on the requirement that the goods sold will be sold to travelers who will take them out of the country. Which products can be sold duty-free vary by jurisdiction, as well as how they can be sold, and the process of calculating the duty or refunding the duty component.
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Recommerce Recommerce or reverse commerce, refers to the recovery of products over electronic systems, such as the Internet, or through physical distribution channels.
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Win–loss analytics Win–loss analytics involves identifying and analyzing the reasons why a visitor to a website was or wasn't persuaded to engage in a desired action (conversion).
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Wardrobing Wardrobing is a form of return fraud. It is the practice of purchasing an item, using it, and then returning it to the store for a refund. It is most often done with expensive clothing - hence the name - but the practice is also common with tools, electronics, and even computers. To prevent this practice, some stores make certain items, such as wedding dresses or Christmas decorations unreturnable. Some observers classify wardrobing as a form of shoplifting.
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Automobile products liability When a person makes a claim for personal injury damages that have resulted from the presence of a defective automobile or component of an automobile, that person asserts a product liability claim. That claim may be against the automobile's manufacturer, the manufacturer of a component part or system, or both, as well as potentially being raised against companies that distributed, sold or installed the part or system that is alleged to be defective.
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Comrs of Customs and Excise v Barclays Bank plc Her Majesty's Commissioners of Customs and Excise v Barclays Bank Plc [2006] UKHL 28 is a leading English tort law case concerning negligent misstatement and pure economic loss.
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Ringfencing Ringfencing or Ring-fencing occurs when a portion of a company's assets or profits are financially separated without necessarily being operated as a separate entity. This might be for:
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Stock clearance Stock clearance is an activity by a company where ownership of products and materials move on to another legal entity. These products and materials in stock clearance will not form the basis of a company's key activities. As such they are often end of line stock, surplus stock, returned stock or bankrupt stock.
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Category killer A category killer is a retailer that specializes in and carries a deep product assortment within a given category and through selection, pricing and market penetration obtain a massive competitive advantage over other retailers. Chains such as Barnes & Noble, Best Buy, and Staples are considered category killers.
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Global financial crisis in October 2008 The policy response to the subprime crisis started in earnest after Lehman’s failure in mid September 2008, accelerated after February 2009, and had become very large by September 2009. Governments have relied on a portfolio of intervention tools, but the biggest commitments and outlays have been in the form of debt and asset guarantees, while purchases of bad assets have been very limited. Announcements directed at the banking system as a whole (general) and at specific banks (specific) were priced by the markets. General announcements tend to be associated with positive returns and specific announcements with negative ones. Moreover, general announcements exert cross-country spillovers but are perceived by the home-country banks as subsidies boosting the competitive advantage of foreign banks. Specific announcements exert spillovers on other banks.
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Newsagent's shop A newsagent's shop or simply newsagent's (British English), newsagency (Australian English) or newsstand (American and Canadian English) is a business that sells newspapers, magazines, cigarettes, snacks and often items of local interest. In Britain, Ireland and Australia, these businesses are termed "newsagents". Newsagents typically operate in busy public places like city streets, railway stations and airports. Racks for newspapers and magazines can also be found in convenience stores, bookstores and supermarkets. The physical establishment can be either freestanding or part of a larger structure (e.g. a shopping mall or a railway station).
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Trade-In Protection Trade-In Protection refers to an automotive protection program that assists in paying off vehicle trade-in negative equity if loyalty occurs by the consumer to either the original selling dealership or automotive manufacturer by trading-in and purchasing another vehicle from the original provider.
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Theft In common usage, theft is the illegal taking of another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting, library theft, and fraud ("i.e.", obtaining money under false pretenses). In some jurisdictions, theft is considered to be synonymous with larceny; in others, theft has replaced larceny. Someone who carries out an act of or makes a career of theft is known as a thief. The act of theft is also known by other terms such as stealing, thieving, and filching.
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Go-back In retail terms, a go-back is an item of merchandise which must be placed back on the store shelves. Such items usually accumulate during the store's open hours, and comprise a combination of returned items, items customers have decided not to purchase, and items store employees may have found left lying on the wrong shelf. Go-backs can often accumulate over several days because businesses, especially larger department stores, tend to have other priorities at the time and not enough employment to put the go-backs away. Go-backs are sometimes referred to as re-shop, put-backs, misplaced, shop-backs, returns, abandons, left-behinds, loose-stock, or shop-downs.
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Refund theft Refund theft, also known as refund fraud, refund scam or whitehouse scam, is a crime which involves returning goods ineligible for refund to a retailer in exchange for money or other goods. The goods returned may have been acquired illegally, or they may be discarded damaged goods. Other schemes involve sealing weights or other simulated merchandise in the original product packaging, or switching labels on items to purchase them at a lower price and then returning them for their original value.
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Pottery Barn rule The Pottery Barn rule is an American expression alluding to a "you break it, you buy it" policy, by which a retail store holds a customer responsible for damage done to merchandise on display. It is an analogy often used in the political or military arena to suggest that if an actor inadvertently creates a problem, the actor is obliged to provide the resources necessary to correct it.
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Distribution center A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.