NRF: Organized retail crime slightly drops, still pervasive
Washington, D.C. – Organized retail crime (ORC) is down slightly from 2013 but still a pervasive problem. According to the National Retail Federation’s 10th annual Organized Retail Crime Survey, which polled 76 senior retail loss prevention executives, eight-in-10 (88.2%) retailers report that they have been a victim of ORC in the past year, down slightly from 93.5% in 2013.
For the first time, NRF asked about the impact organized retail crime has on their online operations: and nearly half (48.3%) say their online operations are affected. Overall, three-quarters (74.7%) of those surveyed say they are allocating resources. Of that group, one-in-five (22.7%) are adding staff resources, 34.7% are adding technology resources and 17.3% are adding budget resources. When it comes to personnel, a number of retailers report investing more than one million dollars annually on staffing ORC investigation teams.
When asked about their company’s overall ORC case value for the past 12 months, 13.2% of retailers estimate the value to be more than $5 million; the average case value for those who have lost money to organized retail crime is $2.8 million.
According to the survey, three-in-10 (30.6%) of those polled said they have noticed a reduction in ORC activity in states where laws are present. Of those retailers who have a presence in states with existing ORC laws, more than half (52.1%) noticed a positive impact on their ability to prosecute ORC offenders more effectively; nine-in-10 (88.5%) said they have noticed an increase in support from law enforcement agencies when actively investigating organized retail crime cases. Specifically, 51.9% said they’ve noticed an increase in support from local/county law enforcement, 26.9% said state law enforcement and 9.6% said federal law enforcement. In states without ORC laws and where retailers have a presence, six-in-10 (63.5%) say they haven’t noticed any changes in support from law enforcement.
Two of the biggest components of organized retail crime are physical and e-fence operations. According to the survey, 63.6% of respondents say they have identified or recovered stolen merchandise from a physical fence, such as a pawn shop, flea market or temporary store set up; 68.2% say they have recovered merchandise from an e-fencing location, such as a third-party website, auction site or blog. Retailers on average believe that more than one-third (34%) of items labeled “new in box,” or “new with tags” on auction and blog sites are stolen or were fraudulently obtained.
In addition,, 42.4% say they have seen an increase in physical fencing activity in the past 12 months, and more than half (53.9%) have seen an increase in e-fencing activity. And more than three-quarters (76.9%) of respondents say they have experienced thieves returning stolen merchandise for store credit, to then sell that merchandise credit to secondary market buyers or sellers – unchanged from the 77.8% last year.
Despite their best efforts to curb cargo theft in the supply chain, retailers are still grappling with the costly issue. According to the survey, more than one-third (35.4%) of retailers surveyed said they were victims of cargo theft in the past year. Specifically, one-quarter (24.2%) of respondents said they’ve experienced cargo theft at the store, 41.4% said the theft took place en route from manufacturer to distribution center, 51.7% said it occurred en route from distribution center to the store, and 13.8% said it occurred at the distribution center.
The top 10 locations that retailers say have the most criminal activity are (by rank):
1. Los Angeles
2. Miami
3. Chicago
4. New York
5. Houston
6. Atlanta
7. Baltimore
8. San Francisco/Oakland
9.A rlington/Dallas/Fort Worth
10. Detroit
“Few retail crimes reach the level of concern among retailers that organized retail crime does,” said senior advisor, asset protection Rich Mellor. “For the better part of 15 years, savvy criminals and the enterprises they’re a part of have forced retailers to change how they deal with fraud, including maximizing efforts to partner with and educate law enforcement. These partnerships have become a crucial part of the fight against retail crime gangs, and while those invested in tracking down retail criminal enterprises can point to some success, it’s evident there’s still a big fight ahead of us.”