Meeting the challenge of organized retail crime

Organized retail crime costs retailers more than $700,000 for every $1 billion in sales on average, according to NRF’s 2020 Organized Retail Crime Survey, and 69 percent of retailers surveyed in 2021 said they had seen a rise in ORC during the previous year.

These are not victimless crimes; they jeopardize employee and customer safety and disrupt store operations. They’re also not non-violent — customers, employees and community members are traumatized by these incidents. News headlines around “smash and grab” thefts at national retailers in major cities show that organized retail crime continues to be a serious problem. ORC continues to be a “gateway crime” to more serious crimes and often has ties to transnational crime rings.

And it’s not a new problem: NRF surveys show that organized retail theft has been a growing problem over the past five years. The brazen, targeted and coordinated activity occurs in communities across the United States.

How did we get here?

Over the past eight years, several states have worked to keep non-violent criminals, or those with minor misdemeanor offenses, out of the U.S. criminal justice system. Diversion programs and other job and economic development programs encourage these individuals to become productive members of society.

States have also changed laws regarding the amount of bail assessed to minor offenses, increased felony theft thresholds and worked to remove non-violent offenders from the prison system in the hopes they do not become “career criminals” or fall into a life of more violent crime.

Some district attorneys, law enforcement officers and state legislators even communicated that they would no longer be tough on non-violent, “victimless” or seemingly minor offenses. In an effort to help locales meet criminal justice reform goals and free resources to go after more violent and serious offenders, those apprehended were often quickly released due to the “non-violent” and unimportant nature of these property crimes.

The result is that criminals can recruit people to steal inexpensive items in great quantities with no fear of retribution or prosecution.

COVID-19’s impact

Incidents of organized retail crime were rising before 2020, but the pandemic upended people’s lives in countless ways. Many lost their jobs. Communities restructured how we lived, shopped and worked. Retailers raced to safely stay open and serve customers by increasing innovations like delivery, curbside fulfilment and buy online, pick up in store. Customers flocked to these convenient — and safe — ways to shop, wearing face coverings as required in stores and shopping centers.

Unfortunately, these innovations also attracted enterprising criminals looking to exploit gaps in security and take advantage of opportunities to quickly resell merchandise online, on street corners, in black markets and even back to the retail supply chains and stores they stole from. Criminals organized flash mobs or smash-and-grab incidents through social media and apps, which spawned more “copycat” incidents.

A perfect storm for organized retail crime emerged — and the results of that storm are being captured on mobile devices and shared via social media and news stories across the country.

While ORC’s financial impact is considerable, the impact on employee and customer safety is even more important. These crimes not only affect retailers’ bottom lines with asset loss and store operation disruptions; they have become increasingly violent jeopardizing the safety of employees and customers.

Solutions

The costs for security budgets for retailers have grown significantly in recent years — partly due to these retail crimes. Retailers continue to revisit their policies and shift strategies to fight and prevent ORC-related incidents. NRF supports their efforts through advocacy and opportunities to convene the retail industry’s leading professionals in loss prevention, asset protection and cybersecurity.

• NRF supports an all-encompassing public policy response. Legislation and executive actions will aid federal, state and local law enforcement agencies with information sharing, funding and additional resources to better target efforts to root out ORC within local communities.
• NRF supports the establishment of federal interagency taskforces of investigative agencies to facilitate intelligence gathering and sharing of information among federal, state and local law enforcement to track gangs and the flow of stolen goods. These taskforces can also provide reporting, training and technical assistance.
• NRF supports the House INFORM Consumers Act (H.R. 5502) as included in the Bipartisan Innovation Act. This bipartisan legislation introduced by Reps. Schakowsky, D-Ill., and Bilirakis, R-Fla., will work to curb the sale of stolen, counterfeit and defective goods on online marketplaces.

• NRF encourages states to update the definition of organized retail crime with sufficiently serious criminal penalties. States should act to define the crime of "organized retail theft" in criminal law to specify those thefts involving two or more participants, an intention of resale, and include increased penalties for those specific violations.

• NRF supports Organized Retail Crime Alliances and other regional taskforces. These groups convene members of law enforcement, district attorneys and retail investigators to share information and bring cases against organized gangs that recruit individuals to steal, fence and resell merchandise.
• NRF’s ORC/Investigators’ Network is a group of more than 1,000 loss prevention professionals, including federal, state and local law enforcement officers. The network facilitates information sharing, communal strategizing and partnerships between retailers and law enforcement.
• NRF PROTECT convenes retail security professionals to examine top security and cyber risk priorities and new strategies and tools to address them. This year’s event takes place June 21-23 in Cleveland; featured speakers at NRF PROTECT 2022 include William Evanina, founder and CEO of The Evanina Group; David Johnston, senior director of loss prevention and corporate security with Inspire Brands; and former U.S. Secret Service Special Agent Evy Poumpouras. Register here.