Organized Retail Crime

The issue

Organized retail crime is the large-scale theft of retail merchandise with the intent to resell the items for financial gain. ORC typically involves a criminal enterprise employing a group of individuals who steal large quantities of merchandise from a number of stores and a fencing operation that converts the stolen goods into cash. Stolen items can be sold through online auction sites, at flea markets and even to other retailers. In addition to targeting stores, ORC gangs sometimes hijack truckloads of merchandise. They also commit other frauds such as using stolen or cloned credit cards to obtain merchandise, changing bar codes to pay lower prices, and returning stolen merchandise to obtain cash or gift cards. ORC is distinct from ordinary shoplifting committed by individuals seeking goods for personal use.

retail crime

While the retail industry has been dealing with ORC for many years, dramatic video footage of major smash-and-grab incidents at large retail stores across the country has recently brought increased media attention to the topic. Retail loss prevention teams and law enforcement have active efforts to investigate the growing number of cases of ORC and build cases but are frequently hampered by lack of visibility into the scope of retail crime groups’ activities, which can be national or even international. In response, NRF has stepped up its efforts to have Congress address the issue.

Why it matters to retailers

ORC thefts cost retailers an average of $720,000 for every $1 billion in sales as of 2020 – up from about $450,000 five years earlier – and 69 percent of retailers surveyed in 2021 had seen an increase in ORC activity in the past year. Reasons cited for the increase have included exploitation of new opportunities for theft during the COVID-19 pandemic, less prosecution of crimes wrongly perceived as “victimless,” increased felony thresholds that let thieves steal more while facing only a misdemeanor charge if caught, and the growth of online marketplaces. The losses drive up costs for retailers and, in turn, prices for consumers. Items stolen run the gamut from low-cost, easily fenced goods like razor blades and laundry detergent to designer clothing and high-end liquor.

ORC is also a safety threat to retail workers. Gangs have been reported to use Mace chemical spray and Taser stun guns, and 65 percent of retailers noted an increase in violence last year while 37 percent said perpetrators were “much more aggressive.” In addition, the theft and re-sale of items like non-prescription drugs or baby formula creates health risks because they might be stored improperly, sold after expiration or “cut” into larger quantities.

NRF advocates to stop ORC

NRF has long asked Congress to give law enforcement funding and other resources to combat ORC. Legislation currently being debated – the INFORM Act – would require online marketplaces to verify the identity of high-volume third-party sellers in an attempt to make it more difficult to fence stolen merchandise online and also address the sale of counterfeit goods.

NRF believes the House version of the INFORM Act “strikes the appropriate balance” of requiring marketplaces to verify the identity of their biggest sellers while not impeding legitimate commerce. But NRF said in a letter to Congress that “marketplace transparency alone will not curb the incentive for organized retail criminals” and spelled out further steps Congress should take.

Loss prevention

NRF is seeking introduction of legislation that would establish a federal Organized Retail Crime Coordination Center located within U.S. Customs and Immigration Enforcement’s Homeland Security Investigations division. Under NRF’s proposal, the new center would take the lead on ORC activities, including developing a national-level ORC intelligence picture and coordinating activities among agencies. Regional ORC task forces would be established at several ICE HSI field offices, and the Department of Homeland Security and the Department of Justice would leverage existing law enforcement resources to more actively prioritize ORC.

In addition to efforts in Congress, NRF has worked closely with state lawmakers, local law enforcement and news media across the country to draw attention to ORC. The effort has been successful, with at least 34 states passing ORC laws, and NRF is currently urging states to update the definition of ORC and adopt sufficient criminal penalties. But with incidents often crossing state lines, 78 percent of retailers surveyed last year said a federal law is still needed.

NRF supports ORC alliances and other regional task forces that bring together law enforcement, prosecutors and retail investigators. NRF’s ORC/Investigators' Network includes more than 1,000 retail loss prevention professionals and federal, state and local law enforcement officers who share information, develop strategy and form partnerships to fight ORC. And ORC is a key focus of the NRF PROTECT loss prevention conference each year.

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