The Hidden Costs in the Retail Price of a Garment | The Meredith Minute

The Hidden Costs in the Retail Price of a Garment | The Meredith Minute


[MUSIC PLAYING] DIANE ELLIS: Have
you ever wondered what goes into the retail
price of a garment? One component of the retail
price that may surprise you is the cost of doing business,
which includes the losses that are the result of organized
retail crime, credit card fraud, shoplifting, employee
theft, and clerical mistakes. The most significant
losses are the result of shoplifting, organized retail
crime, and credit card fraud. These losses are called
shrink, and account for 15% of the
price of a garment. This economic loss is far
larger than any other form of property crime in America– larger than auto theft,
bank robbery, burglary, and personal robbery. Organized retail crime
and credit card fraud are on the rise. Credit card fraud may
not be as dangerous, but it also causes
a ripple effect. Online retailers are especially
hurt by credit card fraud. They lose money from
the sale itself, plus the cost of postage. These losses are a huge
cost of doing business for brick and mortar stores,
and for online retailers. While millions of dollars are
being spent to prevent losses, shrink continues to
be one of a retailer’s most was frustrating and
expensive costs of doing business. It doesn’t look like
this unexpected cost of a retail price tag
will go away anytime soon.

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