Internal and external thefts of all kinds have reached highest level since 2019, causing R$11bn in losses

07/30/2024

---

Estimates show that in 2023, internal and external thefts accounted for 31.7% of losses, the highest level since 2019 — Foto: Hermes de Paula/Agência O Globo

In mid-March, the manager of a neighborhood market in Piraí do Sul, a town with 25,000 inhabitants in Paraná, noticed discrepancies between the value and quantity of products processed by one of the cashiers and the total collected at the end of the day. Uncertain, he checked the surveillance videos and discovered that the cashier on several occasions entered a password (which belonged to a supervisor, as investigations revealed later) to cancel sales.

Discreetly, she would then take the money from the register and stash it in her pants while the store was still open. The employee was dismissed for cause and criminal charges were filed.

This is not an isolated incident, nor confined to small towns. In Campinas, São Paulo, a cashier at a medium-sized supermarket, with 20 checkout points, owed her landlord R$300 in rent. They agreed she would repay it by simulating purchases of products worth that amount at her workplace.

“She pretended to scan the merchandise but didn’t do it. The issue was that they made a much larger purchase, of R$3,000, which caused a discrepancy in the register and triggered an alert within the company,” said Juliano Camargo, CEO of Nextop, whose client was the victim of the scam. Mr. Camargo has been working in retail theft prevention since 1996.

Simulating purchases to keep the product or settle debts, and even using supervisors’ passwords to cancel sales and keep the money, are common practices among thefts in the sector. Supermarkets and pharmacies are particularly prone to this type of crime. However, new methods are emerging, involving the instant-payment system Pix and other payment channels, such as ATMs, which have created opportunities for increased fraud.

Estimates by the Brazilian Association of Loss Prevention (ABRAPPE), supported by KPMG, show that in 2023, internal and external thefts (by customers, employees, suppliers, and promoters) together accounted for an average of 31.7% of losses, the highest level since 2019.

The total loss index for retail (including errors, thefts, and fraud) also accelerated, reaching the highest level since the survey began in 2016. The rate averaged 1.57% of sales in 2023, a 0.9% increase over 2022.

It may seem small, but Brazilian retail generated R$2.23 trillion in 2023, according to IBGE, which translates to an estimated loss of around R$35 billion. Considering only the projected share of thefts (31.7%) within the total, they accounted for just over R$11 billion.

This is more than half of the revenue generated by GPA, the owner of Pão de Açúcar, last year (R$20.6 billion) and nearly matches Renner’s entire gross sales in 2023.

“We have noticed an impressive increase in thefts. It is quite troubling,” said Carlos Eduardo Santos, president of ABRAPPE. By estimation, employee crimes rose to 9.8% in 2023 from about 6.8% of total losses in 2022, and thefts by outsiders increased to 22% from 16.6%.

“This has required much greater attention from stores on the subject in recent years, as there are social, racial, and economic issues involved, and retail is at the center of this complex and difficult debate,” he states.

To calculate these numbers, based on information provided by members, the networks rely on data such as video surveillance of customers and employees, and evidence like tampered packaging shortly after being handled by employees. The entity considers these estimates, as the cases do not always generate statistics through police investigations or lawsuits. In certain situations, chains avoid prosecuting customers and employees.

This occurs partly due to the risks involved. “There are certain thefts that create avoidable strain, such as cases of vulnerable customers. And the company does not want to risk exposure with all the visibility on discrimination and racial issues today,” said a union director in the sector.

According to the data, theft was second only to estimated losses from “damaged” products last year, which accounted for 43% of the total, leading the general ranking for years. This includes damaged and expired items, two of the sector’s main vulnerabilities.

It is also necessary to consider the need for chains to review internal loss control projects, including thefts after the pandemic. There were deep expense cuts that affected the control department, which may help explain today’s high rate.

As the volume sold in general retail took a hit after the pandemic, and interest rates rose after 2021, operations had to adjust to a different level of expenses and debts, and the loss prevention area felt the cuts. “It’s the same old story: when cuts are necessary, this department is one of the first to feel it, and then the bill comes due,” said Mr. Camargo.

Another industry data set confirms this scenario. According to a survey by Nextop, there were 41,000 cases of theft and fraud in food retail from January to June, 55% higher than in 2023, and the highest rate since at least 2019, the initial year of the survey requested by Valor.

This is more than double the number observed, for example, in 2021, the pandemic year when the unemployment rate was the second-highest since official records by the statistics agency IBGE began. The analysis includes 3,500 supermarket stores, partners of Nextop.

Another aspect affecting the numbers is the industry’s releases, and this year, there is already an expectation that thefts and robberies in pharmacies will increase compared to last year, due to the sale of Ozempic, used to treat diabetes. The medication, sold for R$1,100 per box, has become a craze among those willing to lose weight quickly. In this case, the product has been more targeted for robbery than employee theft, due to the security measures around Ozempic.

According to experts, the rise of self-checkout in supermarkets and fashion retailers, which are still operating with precarious controls in some cases, has pressured retailers’ losses.

“Companies say everything is going well, that theft is low, but that’s not quite the case,” said Mr. Camargo. “I have worked in large chains with losses of 15% at the quick checkout, while the normal would be 2%, 3%.”

According to him, some chains, like Pão de Açúcar, use tray reading systems. In these, the customer places all items on one side of the checkout, passes them all through the reader, and deposits everything on the other tray. Only after that, the customer can pay and pack.

Other chains, like Renner and Zara, perform an immediate reading of the entire purchase after it is placed on the tray. “The more difficult it is to shop, the less friendly the process, the higher the theft risk for the network. The store does this to protect itself,” said the CEO of Nextop, a company that keeps over 400,000 client videos related to theft.

The data also shows how theft has spread across the sector, beyond supermarkets, historically the most affected.

In 2021, in fashion chains, unidentified losses, which include thefts and frauds, were estimated at 1.1% of total losses, according to ABRAPPE, rising to 1.54% in 2023. In construction retail, it went to 0.93% from 0.66%, and in cash and carry stores, to 0.54% from 0.47%.

The rise of Pix operations has forced stores to improve their controls. Purchases through apps, with remote payment, have led to a sharp increase in falsified receipts among small grocery stores, experts say.

One of these scams involves payment using the cashier operator’s account when making a Pix. At that moment, the employee provides their bank key instead of the store’s. Therefore, companies have widely kept their Pix key at payment counters.

One such case became known in the countryside of São Paulo, due to the buyer’s abuse. In April, a customer of a butcher shop in São Carlos bought R$7,100 in meat and beer using the store’s WhatsApp to make the order. He sent a fake bank receipt as payment. Since he had pulled off the scam six times at the same place without any consequences, he took a chance and went to pick up the order. An employee became suspicious, checked the transaction, and discovered the fraud. The customer, who resold the products, was caught in the act while picking up the order, according to the São Carlos regional police.

The proliferation of new types of these crimes has weighed on retail balances—and ultimately, the consumer pays the price. In an environment of fierce competition and high money costs, companies end up passing the blow to the buyer, or, alternatively, cutting from their own margin. Retail profitability is already low, making some cost transfer to the consumer inevitable.

about:blank

This increase involves a broader scenario of general merchandise losses. The number has grown. Losses include, for instance, damages, frauds, administrative and inventory errors, in addition to thefts.

*Por Adriana Mattos — São Paulo

Source: Valor International

https://valorinternational.globo.com/