NRF: Organized retail crime on the up
Not every growing retail trend is a positive one.
According to the 15th annual organized retail crime (ORC) report from the National Retail Federation (NRF), more than two-thirds of surveyed retailers have seen an increase in ORC during the past year. The report found that 97% of retailers had been victimized by ORC in the past year and that 68% had seen an increase in ORC activity.
Losses averaged $703,320 per $1 billion in sales, marking the fourth year in a row that the figure topped the $700,000 per $1 billion mark. Nearly two-thirds (65%) of respondents said ORC is a higher priority for their companies than five years ago, while 56% were allocating additional technology resources to the issue and 44% were increasing their loss prevention budgets.
Among steps taken to fight ORC, 38% had changed or were planning to change return policies, while 37% were doing the same with point-of-sale policies, 27% with employee screening and 24% with the way they handle trespassing.
While ORC often involves thefts from stores, 73% of those surveyed had been victims of cargo theft. Theft of cargo occurred most often en route from distribution centers to stores (59%), at distribution centers (33%), and between stores (30%).
Stolen merchandise is sometimes returned for store credit, usually in the form of gift cards. Those cards can then be sold for cash, and 51% of retailers had found them for sale on websites, while 17% found them in pawnshops.
ORC gangs typically steal a mix of high-end designer products and easy-to-fence everyday necessities. Top items stolen included designer clothing, infant formula, razors, designer handbags, laundry detergent, denim pants, energy drinks, allergy medicine and high-end liquor among others.
Retailers in areas with state-level ORC laws said they were happy with help received from local law enforcement (84%) and state law enforcement (75%), but somewhat less so with federal law enforcement (64%). ORC often crosses state lines, and 71% of respondents said a federal ORC law is needed.
A number of states have increased the threshold of what constitutes a felony in recent years, allowing criminals to steal more before being subject to the stronger penalties that come with a felony. Among retailers surveyed, 51% had seen an increase in average ORC case values in states where that has happened.
Retailers’ efforts to fight ORC focus on more than just preventing the theft of merchandise. The survey found that 68% of retailers said ORC gangs had shown more aggression or violence in the past year.
The top five cities for ORC in 2019 in order were Los Angeles, New York, Houston, Chicago and Miami.
“Organized retail crime continues to present a serious challenge to the retail industry,” NRF VP of loss prevention Bob Moraca said. “These criminal gangs are sophisticated, but so are retail loss prevention teams. Retailers are committing more resources and constantly evolving their tactics to fight this ongoing challenge.”