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Financial and psychological costs of crime for small retail business

Media Release

24 June 2002

A paper released today by the Australian Institute of Criminology uses the AIC's Small Business Crime Survey to provide an overview of the financial cost and psychological impact of crime experiences of small retail businesses within Australia.

In releasing the paper, Dr Adam Graycar, AIC Director said "The financial burden of crime on small retail businesses is substantial, and this study has usefully contributed to identifying which types of retailers stand to lose most".

Financially, service stations which experienced crime were shown to suffer the highest cost of victimisation compared to other small business sectors. The average loss for each victim was approximately $6,900 over one year. Losses were lowest for victims in the cafe/restaurant/takeaway food industries with an average total loss per victim of $3,050 per year.

When losses are spread across all victims and non-victims, retail liquor outlets had the highest average loss: $4,300 per year when averaged across the liquor retailer sector. Pharmacies were next hardest hit, with an average loss of $2,770 across the sector. 72% of liquor outlets experienced some type of crime in 1998/9, as did 61% of pharmacies. For all the sectors examined, the victimisation rate was 49%.

One in 20 businesses increased prices to compensate for losses, and borrowed money to finance the purchase of security measures. One in 25 businesses reported having changed their hours of operation, or having paid for employee counselling. Psychological costs were substantial, with one in four victims of burglary and one in two victims of robbery experiencing fear of crime, and one in five victims of robbery having difficulty in attending the premises where the crime occurred.

The report, by Dr Natalie Taylor and Pat Mayhew also explored the most costly types of crimes to small business retailers.