A self‐report questionnaire was used to discover key shrinkage, theft and loss prevention data from 476 major European retailers (23 per cent of West Europe's retail turnover) in 16 countries for the financial year 2001‐2002. The response rate was 33 per cent. Shrinkage rates were found to vary considerably between countries with a weighted average of 1.45 per cent (1.42 per cent in 2000/2001), equivalent to €30,310 million (or $27,582 million). A total of 18.3 per cent of shrinkage was perceived to be caused by “internal error” rather than crime and this estimate is deducted from shrinkage to derive the crime figure. Retail crime cost retailers €30,407 million ($27,670 million). In contrast to US data, customer theft was seen as the most important crime cost, followed by employee theft, security costs and supplier theft. Stores apprehended more than 1.2 million thieves in 2001/2002, but passed only 25.7 per cent to the police.

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PurposeEmployee theft is a significant part of retail losses from shrinkage, yet has been comparatively underexplored compared with shoplifting. The purpose of this paper is to assess the impacts of different forms of staff theft and fraud upon retail crime losses and analyse the characteristics of offenders.Design/methodology/approachThe approach is based on a statistical analysis of the details (from retail records) of all staff offenders apprehended for theft by four major UK retailers over a two‐year period. The results are then compared with shrinkage losses for these retailers to discuss the implications of the findings.FindingsRetailer concentration upon customer theft is difficult to explain given the significance of perceived staff theft on losses from crime. Only a small percentage of staff offenders were caught by retailers, but estimation problems were caused by the fact it was difficult to value the exact amount stolen over time by serial offenders. The majority of people apprehended were young and were believed to have stolen comparatively small amounts of cash or goods. In contrast, a small number of large‐scale offenders were responsible for 47 per cent of total known staff theft. Only a relatively small proportion of known staff crime involved collusion, the major losses were caused by theft of cash, major fraud losses, merchandise and refund fraud.Practical implicationsThe implications of this study are significant for retailers. They suggest that retailers may concentrate on smaller‐scale wrongdoers rather than major frauds and that retailers may benefit from switching part of their loss‐prevention resources from shoplifting and minor staff offending to more considerable in‐house frauds.Originality/valueThe paper presents original data based on the characteristics of actual apprehended thieves rather than a discussion based primarily on shrinkage estimates). It presents new information for the academic community concerning the impact of different types of theft and fraud and challenges part at least of retailing conventional wisdom about “Who steals?” and “How?” It is valuable both to the academic community and to retail practitioners.

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