Wal-Mart is taking urgent actions against theft which is costing it $3 billion a year.

According to a report from Reuters, Wal-Mart’s head of U.S. operations Greg Foran disclosed that theft is present at Walmart stores — so much so that it takes a good chunk out of profits. Reuters pegs average losses for retail companies from theft at about 1% of annual sales, and for a company with the size and scope of Wal-Mart, with about $300 billion in revenues, that’s billions lost every year due to theft. As reported by Reuters

ThiefGreg Foran, head of the retailer’s U.S. operations, told a media briefing on Thursday he added theft and other forms of “unknown shrinkage” to a list of urgent items to be tackled at Wal-Mart’s 4,555 stores across the United States.

Foran said he saw an opportunity to boost margins by putting a dent in a problem that typically represents 1 percent for any retailer’s sales. He noted that Wal-Mart generated nearly $300 billion in revenues in the United States in the past fiscal year.

“One percent of $300 billion is quite a lot of money. If you can save 10 basis points of it – boy I’ll take it every day of the week and put it into lower prices for customers,” Foran told Reuters after the briefing.

One basis point is equal to one hundredth of 1 percent, meaning that 10 basis points – or 0.1 percent – of $300 billion would be equal to $300 million.

As any accountant, finance director or business owner knows, reducing shrinkage means that money flows directly to the bottom line – profits.

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