Survey finds no let up in one of retailers' biggest threats
Nearly all retailers fell victim to organized retail crime during the past year. And the losses are mounting.
Ninety-six percent of responding retailers experienced ORC in the past year, according to the 13th annual ORC study by the National Retail Federation. And 67% reported an increase in this type of activity during the past year.
The survey of retail loss prevention employees found that losses averaged $726,351 per $1 billion in sales, up from $700,259 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, Houston, Miami, Atlanta, Chicago, Orlando, San Francisco/Oakland, Orange County, Calif., and Northern New Jersey.
“Organized retail crime continues to be one of the biggest challenges to retailers of all sizes,” NRF VP for loss prevention Bob Moraca said. “These crimes happen across the country every day, with criminals getting smarter, more brazen, more aggressive and sometimes even attacking store employees and shoppers. Fighting ORC is a full-time job, and retailers must learn how to stay a step ahead of these thieves.”
The survey found that 40% of retailers were victims of cargo theft, down from 44% last year. Six in 10 retailers had recovered merchandise from physical fencing locations including pawn shops, flea markets kiosks and temporary “pop-up” stores, about the same as last year. Criminals often turn to the internet for the anonymity it offers in fencing, but only 56% of retailers had found stolen goods online, down from 75%.
In addition, 28% of retailers had found their stolen merchandise exported illegally outside the United States. And ORC criminals look for items that can be stolen and quickly resold. Some of the top items this year include designer clothes, denim pants, razors and designer handbags.
In other findings from the NRF survey:
*Return fraud continues to pose a serious challenge for the retail industry. Retailers expect 11% of purchases to be returned this year, and that 11% of those returns are likely to be fraudulent. The return rate for items purchased online but returned to a store is the same, but with a lower fraud rate of 9%.
*Of items returned without a receipt, 17% are believed to be fraudulent. During the holiday season, 13% of purchases are expected to be returned, with 11% believed to be fraudulent.
*The most common method of retail fraid is the return of stolen merchandise (68%), followed by employee return fraud (65%), returns of merchandise purchased on fraudulent or stolen tender (57% ), returns made by ORC groups (54%), wardrobing (40%), returns using counterfeit receipts (29%) and returns using e-receipts (19%).
Ninety-six percent of responding retailers experienced ORC in the past year, according to the 13th annual ORC study by the National Retail Federation. And 67% reported an increase in this type of activity during the past year.
The survey of retail loss prevention employees found that losses averaged $726,351 per $1 billion in sales, up from $700,259 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, Houston, Miami, Atlanta, Chicago, Orlando, San Francisco/Oakland, Orange County, Calif., and Northern New Jersey.
“Organized retail crime continues to be one of the biggest challenges to retailers of all sizes,” NRF VP for loss prevention Bob Moraca said. “These crimes happen across the country every day, with criminals getting smarter, more brazen, more aggressive and sometimes even attacking store employees and shoppers. Fighting ORC is a full-time job, and retailers must learn how to stay a step ahead of these thieves.”
The survey found that 40% of retailers were victims of cargo theft, down from 44% last year. Six in 10 retailers had recovered merchandise from physical fencing locations including pawn shops, flea markets kiosks and temporary “pop-up” stores, about the same as last year. Criminals often turn to the internet for the anonymity it offers in fencing, but only 56% of retailers had found stolen goods online, down from 75%.
In addition, 28% of retailers had found their stolen merchandise exported illegally outside the United States. And ORC criminals look for items that can be stolen and quickly resold. Some of the top items this year include designer clothes, denim pants, razors and designer handbags.
In other findings from the NRF survey:
*Return fraud continues to pose a serious challenge for the retail industry. Retailers expect 11% of purchases to be returned this year, and that 11% of those returns are likely to be fraudulent. The return rate for items purchased online but returned to a store is the same, but with a lower fraud rate of 9%.
*Of items returned without a receipt, 17% are believed to be fraudulent. During the holiday season, 13% of purchases are expected to be returned, with 11% believed to be fraudulent.
*The most common method of retail fraid is the return of stolen merchandise (68%), followed by employee return fraud (65%), returns of merchandise purchased on fraudulent or stolen tender (57% ), returns made by ORC groups (54%), wardrobing (40%), returns using counterfeit receipts (29%) and returns using e-receipts (19%).