Need ROI on Your EAS System?
Focus on Refund Fraud

Electronic Article Surveillance (EAS) has been around for quite some time and is still considered one of the leading Loss Prevention tools in reducing shoplifting. Those Loss Prevention professionals who have had the opportunity to interview amateur shoplifters or professional boosters were told many times over that they would rather steal merchandise from a non-EAS retailer than one who employs this technology. But in order to determine the true ROI of an EAS system, data needs to be analyzed.

There are several ways to calculate the effectiveness of an EAS system other than a reduction of shrink as a per cent to sales. One other way is to compare the number of known shoplifting incidents within a specified time frame before the EAS system was installed, to a specified period of time after the EAS system was installed. Depending on the retail store and location, one may find a glaring reduction in shoplifting incidents. But shoplifting isn’t the only thing a solid EAS system should be preventing.

For every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud

According to the National Retail Federation:

Refund Fraud is a large issue and one that is rarely cited as a leading cause of profit erosion. But in the 2021 Annual Return Survey published by the National Retail Federation (NRF), it was revealed that for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud. According to the NRF’s 2021 survey:

• Total returns account for over $761 billion in lost sales for U.S. retailers
• For every $1 billion sales, the average retailer incurs $166 million in merchandise returns
• For every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud.
• Receipted returns are a hidden risk from behaviors like shoplifting, collusion, wardrobing and more

Ensuring the right EAS system and the right EAS tags are in place are the two most important things a Loss Prevention professional can do to ensure the greatest ROI from the lowest possible investment. Although a huge challenge for retailers has always been getting a high level of tagging compliance from employees, some retailers have employed source-tagging. But if determining an effective ROI from your EAS system is the goal, then shoplifting isn’t the only thing to look at. The most successful LP executives know this, and that is why Refund Fraud reduction is one of the main benefits they realize from a modern and efficient EAS system that is coupled with the right EAS tags.

This blog was originally posted in 2016 and updated with new data in 2022.

Do you want to learn more about how you can combat return fraud?

Read our blog on how RFID Puts a Restraint on Return Fraud

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Vice President Nedap Retail Americas

Wouter Ubbels

Wouter is passionate in helping clients with their needs. As the Vice President, Wouter will help his clients find the best loss prevention solution for their needs.

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