Retail Crime Is a Hidden Consumer Tax

Using scanner transactions for every cannabis sale in Washington state, researchers match robberies and burglaries to stores and show victimized stores and nearby competitors raise prices by about 1.7–1.8%. The paper estimates crime functions like a roughly 1% hidden per‑unit tax on affected retailers, producing an estimated $30.7 million in social costs mostly borne by consumers. — If crime raises final consumer prices, debates about policing, retail security policy, insurance, and competition policy should account for the distributional effect that consumers (and especially customers of independents) absorb crime costs.