Watch out: Organized retail crime is on the rise — and so are the losses

Organized retail crime does not discriminate.



In a unanimous finding, a full 100% of retailers reported that their companies had experienced ORC in the past year, up from 97% in 2015, according to the 12th annual ORC study released by the National Retail Federation. It is the first time in the survey’s history that all responding companies reported being a victim.



The survey of 59 senior retail loss prevention executives found that organized retail crime is continuing to grow, with 83% of merchants surveyed reporting an increase in the past year.



The average loss was $700,259 per $1 billion in sales, a significant increase from $453,940 last year.



Los Angeles continued to be the hardest hit area for ORC in the nation, a position it has held since 2012. Following in order were New York City, Chicago, Miami, Houston, San Francisco/Oakland, Arlington/Dallas/Fort Worth in Texas, Atlanta, Philadelphia and Orange County, Calif.



ORC gangs often use storefronts, pawn shops, flea markets and kiosks to fence stolen goods, and 63% of retailers surveyed said they had recovered merchandise from a physical location. But many criminals turn to the Internet for the anonymity it offers — 58% of retailers said they had identified stolen merchandise from an e-fencing operation.



Criminals are also finding ways to manipulate store return policies. According to the survey, 68% of respondents said they had experienced thieves returning stolen merchandise for store credit, which is often resold to secondary-market buyers.



Four new states — New Mexico, Oregon, New York and Vermont — have enacted ORC laws in the past year, bringing the total nationwide to 34. But 56% of retailers in states with ORC laws said they had seen no increase in support from law enforcement, the highest in the survey’s history. Retailers continue to support creation of a federal ORC law, which is backed by 79.7% those surveyed.



“It is critical for our industry to continue pushing for strong federal legislation that would properly define ORC and make it a federal crime. said NRF VP for supply chain and custom policy Jonathan Gold, who heads the group’s lobbying efforts on ORC. “Until there is a federal ORC law to counter this increasing criminal activity and the ability to transport stolen products across state lines, it will be nearly impossible to put a dent in this $30 billion-a-year problem that threatens retailers, the economy and consumers across the country.”



Cargo theft continued to impact retailers, cited by 44% of those surveyed, up from 38% last year. The most common place for cargo theft to occur is when merchandise is en route from the manufacturer to a retailer’s warehouse or from the warehouse to a store, followed by on-site at the warehouse.