Retailers face a multi-million pound bill and a red tape nightmare as an unforseen consequence of legislation to combat money laundering.
Top financial firm PricewaterhouseCoopers has warned that the cost of audits could soar as the Proceeds of Crime Act 2002 is implemented.
PwC risk assessors believe the Act will generate a mountain of paperwork.
The definition of money laundering employed in the Act relates to 'any proceed or benefit from criminal activity'. In retail, this would apply to shoplifting and staff theft.
From this summer, auditors will have to report any instances of theft to the National Criminal Intelligence Service.
A PwC spokesman said: 'Nobody realised when the Act was drafted the impact it would have on people like retailers. The law aims to catch money launderers, but is creating red tape for people who are nothing to do with the intended targets.'
'A lot of retailers don't report all staff crimes or suspicions of crime to the police. Now, any time an auditor suspects a crime has taken place, a form will have to be filled in.'
'A group with 650 stores, open 365 days a year, with one instance of shoplifting every day, would generate 250,000 reports annually. If each report costs£50 to process that would mount up to more than£12 million a year.'
A John Lewis spokeswoman said the retailer was not aware of the Act's implications, but would investigate the possible effects.
Nobody at the Home Office was available for comment.
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