Report: Retailers Are Seeing Increase in Organized Thefts
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Organized retail crime (ORC) is on the rise, according to the National Retail Federation (NRF), which recently released its 15th annual ORC report. In fact, it was found that 97 percent of retailers had experienced ORC in the past year.
The toll from ORC continues to be a serious problem for retailers, with the average loss topping $700,000 per $1 billion in sales, NRF officials said.
“These criminal gangs are sophisticated, but so are retail loss prevention teams,” said Bob Moraca, vice president of loss prevention of NRF, which is headquartered in Washington, D.C. “Retailers are committing more resources and constantly evolving their tactics to fight this ongoing challenge.”
Nearly two-thirds (65 percent) of retailers said ORC is a higher priority for their companies than five years ago, while 56 percent were allocating additional technology resources to the issue and 44 percent were increasing their loss prevention budgets, according to the report.
Retailers, however, are taking action. Thirty-eight percent had changed or were planning to change return policies, while 37 percent were doing the same with point-of-sale policies, 27 percent with employee screening and 24 percent with the way they handle trespassing, according to the report.
While ORC often involves thefts from stores, 73 percent of those surveyed had been victims of cargo theft, the report found. Theft of cargo occurred most often en route from distribution centers to stores (59 percent), at distribution centers (33 percent) and en route between stores (30 percent).
“Stolen merchandise is sometimes returned for store credit, usually in the form of gift cards,” officials said. “Those cards can then be sold for cash, and 51 percent of retailers had found them for sale on websites, while 17 percent found them in pawnshops.
“ORC gangs typically steal a mix of high-end designer products and easy-to-fence everyday necessities,” officials continued. “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.”
A number of states have increased the threshold of what constitutes a felony in recent years, officials noted, allowing criminals to steal more before being subject to the stronger penalties that come with a felony. Among retailers surveyed, 51 percent 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, officials said. The survey found that 68 percent of retailers said ORC gangs had shown more aggression or violence in the past year, and many anti-ORC resources are directed toward protecting the safety of customers and employees.
The top five cities for ORC in the past year in order were Los Angeles, New York, Houston, Chicago and Miami, according to the report.