Shop Theft Calculator

See how shoplifting and staff theft affect retail margins

Use this simple Shop Theft Calculator to work out how much thieves are likely to be costing you each year.

If you don't have a clue what your Net Profit % is, look at the table further down this page.

Net Profit Before Tax As % Of Total Income - NZ Retailers

Use these figures as a guide to actual typical retail margins in Auckland, when you use the Shop theft Calculator.

Source of data "The Retail Market in New Zealand" An Analysis - 2009, prepared by: John Albertson CEO, New Zealand Retailers Association July 2009

The Shop Theft Calculator Explained:

1. Please note that Best Case shown in the Shop Theft Calculator represents a business with strict inventory control, ongoing staff loss prevention training and a combination of security systems and strategies. A 1% loss is used.
2. Worst Case represents a company with little or no anti-loss policies. An 8% loss is used.
3. These percentages are based on the advice of Fred Tarasoff, one of the world's leading authorities on loss prevention. See article extract on page 3.

Some Thoughts From One Of The World's Leading Authorities

Shoplifting and employee theft will cost the retailer a great deal of lost profits and everyone pays for this crime.

Retailers suffer lower profits and consumers ultimately pay higher prices. Some stores charge up to 7 cents per dollar to cover retail losses which can make a business less competitive.

But let’s break it down a bit further and examine the actual cost of shoplifting to both the retailer as well as the consumer.

Many retail businesses are unaware of the impact of retail loss on their business and some businesses live in a world of denial, in terms of profits walking out their door.

There is a simple basic formula which applies to virtually every single retail outlet from the mom and pop stores to the large retail chains.

Formula for calculating total annual Retail Losses

(These are the calculations used in the Shop Theft Calculator)

Estimate your businesses gross yearly sales, then multiply this figure by a value of 1%.

Repeat this calculation again but this time take your gross yearly sales and multiply it by 8%.

Example 1: $1,000,000 (yearly gross sales) X 1% = $10,000 (retail loss)Example 2 : $1,000,000 (yearly gross sales) X 8% = $80,000 (retail loss)

Generally most retail businesses yearly losses are somewhere between the two example figures of 1% and 8 %. Although your yearly gross sales will vary the percentage figures will remain constant.

Please note that Example 1 represents a business with strict inventory control, ongoing staff loss prevention training and a combination of security systems and strategies. Example 2 represents a company with little or no anti-loss policies.

Although at times there is a notion that shoplifting and internal theft is a victimless crime, this is in fact not true.

Everyone, except the thief pays as it is estimated that every consumer in the US and Canada pay's a minimum of $250 each year because of crimes against merchants.

Theft of a $2.00 item from a store operating on a 10% profit margin requires the sale of $20.00 in merchandise to make up for the loss. Supermarkets and other retailers operating on low margins of 1% must sell $500.00 in merchandise, just to cover the cost of a $5.00 stolen item. It's easy to see how out-of-control shoplifting can quickly threaten the viability of a business.

The cost of shoplifting is high and is expected to skyrocket due to the global economic crisis. Retailers need to re-examine their level of security and should begin to take a more proactive role in the battle against retail theft. Most retail loss experts agree that in order to be successful there needs to be a combination of anti-theft devices combined with good staff training in the prevention of retail shrinkage.

FJ Tarasoff is considered a leading authority in retail loss prevention and has been featured in numerous newspapers and magazines including Globe and Mail, Small Business Report, Grocer and Hardware Mag. etc. He has more than twenty five years experience in retail and understands the cost of retail theft.

In 1989 a record store he owned went under in a large part due to shoplifting. A few years later he was physically attacked by a shoplifter while managing a health food store. These two events inspired him to research and develop various training programs to better prevent, detect and deter both internal as well as external theft. For the last decade Tarasoff worked closely with law enforcement, security companies, trade associations as well more than 250 shoplifters were interviewed in order to better understand theft and how to best reduce theft.

PO Box 32293 Devonport
Auckland 0744
Phone (09) 551 7716

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