Retail Crime Drives Up Prices
New Study Finds Retail Crime Drives Up Consumer Prices

The financial impact of retail crime may extend well beyond stolen merchandise and security expenses, with new research suggesting that consumers ultimately bear a significant share of the costs through higher prices.

By the D&D Daily staff

A new study published in the November 2026 issue of the American Economic Journal: Economic Policy found that retailers affected by robberies and burglaries increased prices by approximately 1.7% to 1.8%, with similar increases observed at nearby competing stores.

The study, titled “The Pass-Through of Retail Crime”, was conducted by researchers Carl Hase and Johannes Kasinger. Researchers examined cannabis retailers in Washington state, matching store-level crime reports with detailed transaction data to determine how criminal incidents influence retail pricing.

The findings suggest that retail crime creates financial pressures extending throughout local markets, even affecting businesses that were not directly victimized.

Researchers found that price increases were not primarily driven by short- or medium-term changes in consumer demand. Instead, the results were consistent with additional costs associated with crime. The effects were particularly pronounced among independent retailers and businesses operating in less concentrated markets.

The researchers estimated that crime effectively imposed a 1% hidden tax on affected stores, generating approximately $30.7 million in additional social costs, primarily borne by consumers.

Although the research focused specifically on Washington's cannabis industry, its findings raise broader questions about how retail crime influences operating expenses, pricing decisions and competition across the retail sector.

For loss prevention and asset protection professionals, the study provides another perspective on the financial implications of retail crime. Beyond merchandise losses, businesses must account for security investments, operational disruptions, employee safety and other expenses associated with preventing and responding to criminal activity.

The findings also highlight the importance of considering retail crime's indirect economic consequences when evaluating prevention strategies and investments in security.

As retailers continue balancing loss prevention spending with profitability and customer affordability, understanding how crime-related costs move through the marketplace could become an increasingly important part of measuring the value of effective asset protection programs.


Retail Fraud Threats and Prevention
Proactive Protection: What Small Business Owners Need to Know About Fraud Prevention
Retail fraud has long been a threat to businesses, but fraudsters have never been able to go after so many different targets at once. New technologies like artificial intelligence (AI) and automation can help bad actors scale scams and make impersonation attempts more convincing, putting businesses at greater risk of financial loss and theft. And with e-commerce accounting for 16.4% of total U.S. retail sales in 2025, opportunities for fraud are increasingly expanding across channels.

Though large, national brands may seem like the most lucrative targets, no business is immune to modern fraud threats. In fact, small-scale retailers, such as independent home improvement stores, can be particularly alluring marks as they often carry easy-to-resell, high-value merchandise and operate with little to no dedicated fraud-prevention resources.

Here’s what small business owners should watch for to recognize fraud early, plus practical steps to build stronger defenses.

Common Fraud Threats Facing Hardware Stores

There are many ways fraudsters can con hardware stores and other retailers out of money and merchandise, such as returning stolen goods, using fake receipts to claim refunds or sending back counterfeit merchandise for full-value refunds.

In 2025, the retail industry was projected to process $849.9 billion in merchandise returns, but not all those returns were legitimate with 9% classified as fraudulent.

Return fraud isn’t the only way bad actors can defraud small business owners. Payment card fraud and stolen card use remain persistent threats, too. According to The Federal Reserve’s Economic Well-Being of U.S. Households in 2025 report, 16% of U.S. adults reported experiencing credit card fraud.

Though retailers may not be the direct target when a customer’s card information is stolen, they can still feel the impact through lost merchandise or chargebacks when fraudulent purchases are reversed. Criminals can run similar plays with gift cards, either purchasing them with stolen information or physically tampering with the cards to steal card numbers and claim the balance after legitimate activation. Though many retailers have defenses in place to block suspicious transactions, some fraudsters can get around those protections by committing fraud through a known customer’s account. For example, by using stolen credentials to take over loyalty or other online accounts, bad actors can pose as legitimate shoppers to slip past security controls that rely on trusted account signals to assess fraud risk. hardwareretailing.com


McDonald's Faces Backlash Over Workplace Safety Measures
Family of teen killed at Cypress McDonald’s retains Ben Crump, seeks answers on workplace safety

Attorneys question what safety measures McDonald’s had in place as investigators probe late-night altercation

The family of a 17-year-old employee fatally stabbed at a Cypress McDonald’s has retained civil rights and personal injury attorney Ben Crump, according to a statement released Tuesday.

“A mother sent her 17-year-old son to work, and he never came home,” Crump and Dekle said in a joint statement. “RJ was killed by a co-worker inside a McDonald’s restaurant where he should have been safe. His family deserves to know what McDonald’s had in place to protect its workers and how this tragedy could happen. We are investigating, and we intend to get those answers.”

Authorities said RJ and a 16-year-old co-worker got into an altercation that escalated into a stabbing. RJ was found suffering from multiple stab wounds and was pronounced dead at the scene. The 16-year-old remained at the scene and was detained by deputies.

McDonald’s owner-operator Michael Gutierrez issued a statement following the incident.

“We are saddened by this tragedy, and our hearts are with the victim’s loved ones and all those impacted,” Gutierrez said. “Right now, our focus is on the well-being of our restaurant employees and supporting them as they process these events. We are cooperating with local law enforcement and would respectfully refer any questions about this active investigation to them.”  click2houston.com


The Debate Over Crime-Fighting AI
AI Cameras Send Alerts in Seconds at Chicago-Area Stores
Security cameras in about two dozen Chicago-area stores are now doing more than recording — they're using artificial intelligence to flag suspected shoplifting and send alerts to employees within seconds. Store staff monitor the situation and intervene if merchandise leaves the store.

The technology has spread from suburban grocery aisles to South Loop convenience stores, and it's sparking a familiar debate: does catching thieves faster justify watching every customer that much more closely?

At International Fresh Market in Naperville, manager Daniel Valle said store staff catch about two suspected shoplifters a day after they leave the store, with the system helping identify them, according to ABC7 Chicago.

During a demonstration for the station, the software — built by a company called Veesion, which layers AI analysis on top of existing security-camera footage — sent a push alert to employees within seconds of a simulated theft attempt. Before the system was installed, Valle said, human review of surveillance footage typically turned up only a few suspected shoplifters a week.

Veesion's software scans live camera feeds for gestures and movements associated with stealing — things like slipping an item into a bag or coat pocket — and immediately alerts employees when it flags suspicious behavior. Valle said signs alerting customers to the technology appear to discourage theft on their own, and he called the system's cost reasonable, saying it pays for itself through the money saved by preventing losses. hoodline.com


Key Local and State Criminal Justice Elections to Follow in the Midterms

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