Shoplifting, theft and fraud have increased during the pandemic: study


The pandemic has changed the way many businesses were expected to do business by switching to online sales or curbside pickup, and there are fears it has led to an increase in retail fraud.

According to a recent LexisNexis study on the true cost of fraud, retail fraud in Canada is up about 15% from pre-pandemic levels and it’s costing retailers hundreds of millions of dollars a year.

“Shoplifting and return fraud are on the rise and professional return fraud is also on the rise,” according to Rui Rodrigues of the Retail Council of Canada. “Fraud has grown in many ways, it’s getting hard to keep up. “

Retailers say there has been an increase in theft in stores, with some shoplifters stealing items only to bring them back to return without a receipt to get gift cards. They then take the gift cards to another store to purchase items and return them for cash.

There is also an increase in organized delivery thefts, where thieves use stolen credit cards to buy items to have them delivered, then call later to have them sent to a different address, or just have people steal packages upon arrival.

Jeffry Chiasson is the CFO of SoftMoc, which has 130 shoe stores across Canada and a strong online presence. Chiasson said while the chain wants to have a welcoming environment for its customers, it must also be constantly on the lookout for thefts.

“All a fraudster has to do is find a hole in your armor and that’s where they come in. You have to constantly protect yourself against all aspects of fraud and find ways to deal with it” , said Chiasson.

Recently, Durham Regional Police charged two suspects in an alleged shoplifting ring. Two 29-year-old suspects from Whitby, Ontario. face numerous charges for fraudulent gift card transactions.

Det. const. Taryn Snow told CTV News Toronto that the accused allegedly stole items and then returned them to the store without receipts to get gift cards, which they allegedly took to other stores to purchase items.

“We determined a timeline from 20221 to February 2022 where they defrauded the retail company of over $200,000,” Snow said.

The charges have not been proven in court.

Although police did not name the retailer, investigators seized $30,000 in property and $20,000 in gift cards from a suspect’s residence that belonged to the victimized business.

Criminals are also abusing the chargeback system where a buyer can dispute charges on their credit card.

Yale Holder is the vice president of customer experience at Moneris and said a chargeback happens when someone buys something online and then disputes the charge on a credit card saying they don’t never received it.

“In 2021, we had over 300,000 business chargebacks and that resulted in tens of millions of dollars in losses,” Holder said.

Police said retailers should monitor inventory closely and watch for excessive returns, especially those without receipts.

The Retail Council calls on stores to work together to prevent fraud and there is also a Loss Prevention Task Force which has been set up to try to tackle the rise of professional fraudsters in retail.

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