The rising toll of organized retail crime

The awkward shuffle in front of a display case while waiting for an employee to unlock laundry detergent brings one thought to mind: How did shopping get to be like this? Similar scenes have become increasingly common as retailers struggle to fight organized retail crime in their stores.

Pamela Paul, an opinion columnist for The New York Times, dubs this experience the “sad atmosphere of surveillance” in an article that focuses on the cost everyone bears because of retail theft. ORC impacts the safety and wellbeing of retail employees and customers, diminishes consumer shopping experiences, and impairs businesses’ ability to operate in communities large and small.

The scope, complexity and violence associated with ORC has increased precipitously — and people are noticing. The majority of consumers (53%) believe retail crimes like shoplifting have increased in their communities since the pandemic. NRF’s 2022 National Retail Security Survey found that retailers lost an estimated $94.5 billion nationwide to shrink in 2021 alone, and 70% of retailers believe ORC has become a more prevalent threat over the last five years.

The retail industry’s top priority is the health and safety of all retail employees and our customers. Unfortunately, organized retail crime threatens the safety of both.

It isn’t just simple shoplifting: Organized retail crime is the large-scale theft of retail merchandise with the intent to resell the items for financial gain. Criminal groups deploy large groups of people to steal from retailers. The gangs employ threats and acts of violence, sometimes including the use of weapons, to aid these thefts. The stolen products are then sold through different avenues (online, flea markets, etc.) and fund other illegal enterprises such as guns, drugs and human trafficking.  The NRSS found that eight in 10 retailers reported an increase in violence against employees in 2021. One retail employee has recounted facing 22 robberies within a two-day window.

News footage of smash-and-grabs or other brazen retail crimes has made store-based theft the most visible component of ORC. But these highly public crimes are not the only form ORC takes. Cargo theft, ecommerce and digital fraud also contribute to ORC. Before we can successfully counteract theft groups, we must understand the varying methods, tactics and strategies that threaten the retail ecosystem. The following scenarios were shared with NRF by various retailers so we could do just that.

One retailer reported 70 subjects tied to 168 boosting incidents across 107 locations that resulted in over $449,583 in losses across the company. Another, speaking about a string of fraudulent returns, lost $13,000 after 230 units were stolen (and fraudulently “returned”) in less than five weeks. And a third shared details pertaining to a group that used compromised accounts to purchase and pick up merchandise across the country. Chargebacks to the retailer amounted to $430,000.

As the leading voice for the retail industry, NRF has long advocated for policy solutions to stifle the threat of retail crime in stores large and small across the country. The first legislative success came with passage of the INFORM Act, a measure that will make it harder to resell stolen products on online marketplaces.

The next step is the Combating Organized Retail Crime Act, now pending in the House and Senate, that will help put the ringleaders behind ORC gangs in jail. By creating an interagency Organized Retail Crime Center, this legislation would enable retailers nationwide to share data across federal, state and local agencies, and make it easier for law enforcement to investigate and prosecute these sophisticated crimes.

Even when nothing is stolen from a store, the threat of ORC has a cost. Retailers incur significant expenses in protecting their associates and stores. Collectively, retailers are spending billions of dollars, but the problem cannot be solved by an individual store fighting cases one-by-one at the local level. If this criminal activity was unique to the retail industry, retailers would have solved it by now. Instead, criminals continue threatening workers and exploiting businesses.

Retailers know locked shelves and mid-aisle shuffles are inconvenient for customers; they also know anti-theft security measures can lead to lost sales. But when it comes to choosing between inconvenience and loss to theft, retailers will choose the one that protects employees and shoppers’ safety.

Despite the overwhelming evidence that ORC is pervasive, some commentators in the media have questioned whether retail theft is truly a problem. There is no question that efforts to fight retail crime in our communities quickly become ensnared in complicated and emotional debates around criminal justice reform and complex socioeconomic factors, but the reality of ORC cannot be denied.

Turning stores into fortresses is not the answer, and many community leaders realize that doing nothing is not an option. That’s why Congress must step up now and pass the Combating Organized Retail Crime Act. This carefully crafted legislation will help retailers and local communities by sharing information and resources nationally to bring the most brazen criminal gangs to justice. Join NRF’s grassroots campaign to support passage of the CORCA bill now.