SAN DIEGO · Retailers nationwide lost a record $41.6 billion last year to customer and employee theft, fraud and internal accounting errors, according to a survey released Monday here at the National Retail Federation's Loss Prevention Conference.

Merchants say that consumers will pay for this shortfall in the form of higher prices on the goods they buy.

"That cost has to be borne by somebody and ... ultimately it builds into pricing," said Dan Doyle, vice president of loss prevention for Florida-based Beall's Department Stores.

The 2006 National Retail Security Survey, conducted by the University of Florida, shows that retailers' losses from store inventory increased 11.2 percent from the previous year. The survey said the losses still remained about 1.6 percent of total annual retail sales but merchants say the loss figures are too high and actually much worse because money lost from credit-card fraud and organized retail crime isn't included.

The retail industry's annual security report surveyed 139 national and regional retailers and was a collaborative effort with the National Retail Federation. The report included inventory losses from employee theft, shoplifting, retail vendor fraud and general accounting errors. It was released during the National Retail Federation's Loss Prevention Conference and Expo in San Diego, where more than 2,600 retailers and law enforcement officials are gathered to talk about ways to curb retail crimes and boost store security.

Frank Muscato, organized retail crime training coordinator for drugstore chain Walgreen Co. said total store inventory losses, especially those related to theft, are likely much higher than reported in surveys like this.

Muscato said there are a lot of exceptions to the numbers published in loss surveys and retailers don't report actual store losses for fear that would drive shoppers to competitors' stores. He put retailers' losses in inventory from various types of theft and fraud at closer to 3 percent or 4 percent of annual sales.

Joseph LaRocca, the National Retail Federation's vice president of loss prevention, called the retail inventory losses last year "a huge problem."

He agreed the survey released Monday doesn't show a complete picture of the industry's inventory losses, especially those related to the growing problem of organized retail crime.

Organized retail crime involves sophisticated criminals who steal merchandise for the purpose of reselling the goods at flea markets, pawn shops and via online auction sites. This costs retailers about $30 billion annually, and, in Florida, retailers lose $3 billion to $5 billion a year to organized theft rings.

The silver lining, some experts say, is the University of Florida's data show that retailers have a better understanding of organized retail crime and may be starting to stem crime in their stores.

"Retailers seem to be putting a dent in the amount of criminal activity in their stores, though they acknowledge they have a lot of work left to do," UF criminology professor Richard Hollinger, who authored the report, said in a statement.

Still, retailers like Muscato expect organized retail criminal activity to worsen.

"I don't think we've seen the real influx of organized retail crime yet," Muscato said. "In the next few years, I think we're looking at even a bigger blow to retailers."

Meanwhile, states such as Florida are adopting tougher laws designed to differentiate between amateur shoplifting and theft by professional crime rings and imposing stiffer penalties on organized theft.

At the conference Monday, the national retail federation unveiled model legislation to help educate lawmakers across the country about organized retail crime and spur them to draft laws to combat it.

Florida already has among the stiffest retail crime laws in the nation and is ahead of most states when it comes to cracking down on professional shoplifters and organized theft rings.

Thefts greater than $300 are considered a third-degree felony, for example. And an organized retail crime bill passed recently by the Legislature and awaiting Gov. Charlie Crist's signature would make thefts exceeding $3,000 as opposed to $20,000 a second-degree felony. The same legislation would increase the sentence for grand theft from a maximum of five years in prison to 15 years.

http://www.sun-sentinel.com/business/local/sfl-zsecurity12jun12,0,1284623.story?coll=sfla-business-headlines

Swanny Note: People steal , as a general rule, because they need to survive. The way the laws are...it discourages making a living. They want you to WORK for someone else when it should be easier to own your own business. Yes, there is organized crime but organized crime is there because there is a need that is not filled. New laws are not what is needed.