Organized Retail Crime

What is organized retail crime?

Organized retail crime (ORC) is the large-scale theft of retail merchandise with the intent to resell the items for financial gain. ORC typically involves a criminal enterprise employing a group of individuals who steal large quantities of merchandise from a number of stores and a fencing operation that converts the stolen goods into cash. Stolen items can be sold through online auction sites, at flea markets and even to other retailers. In addition to targeting stores, ORC gangs engage in cargo theft activities. They also commit other frauds such as using stolen or cloned credit cards to obtain merchandise, changing bar codes to pay lower prices, and returning stolen merchandise to obtain cash or gift cards. ORC is distinct from ordinary shoplifting committed by individuals seeking goods for personal use.

ORC is not just ‘shoplifting’

While the retail industry has been dealing with shoplifting and ORC for many years, dramatic video footage of major smash-and-grab and large-scale theft incidents at both large national retailers and smaller businesses across the country has recently brought increased media attention to the topic. Unlike shoplifting events where an individual steals for personal consumption or use, there has been a dramatic increase across the nation in the number of large-scale, targeted thefts using methods of coordinated and planned attacks on retailers. Retail loss prevention teams and law enforcement have active efforts to investigate the growing number of cases of ORC and build cases but are frequently hampered by lack of visibility into the scope of retail crime groups’ activities, which can be national or even international. In response, NRF has stepped up its efforts to have Congress address the issue.

Why it matters to retailers

Shrink or shrinkage is the measurement of losses calculated by a retailer during a specific period of time, categorized across various means of retail loss. This year’s study found that the average shrink rate in 2022 increased to 1.6%, up from 1.4% in 2021 and in line with shrink rates seen in 2020 and 2019, according to NRF’s latest National Retail Security Survey. When taken as a percentage of total retail sales, that represents $112.1 billion in losses in 2022, up from $93.9 billion in 2021. While retail shrink encompasses many types of loss, it is primarily driven by theft, including organized retail crime. Theft – both internal and external – accounts for nearly two-thirds (65%) of shrink overall and up to 70% in some retail sectors.

While theft has an undeniable impact on retailer margins and profitability, retailers are highly concerned about the heightened levels of violence and threat of violence associated with theft and crime. Retailers’ top priority remains providing a safe workplace for associates and a safe shopping experience for customers. Eighty-eight percent of retailers report that shoplifters are more aggressive and violent compared with a year ago. And those that specifically track it saw shoplifting events involving violence increase by over one-third (35% on average.

ORC, which is one of many types of retail theft, is another area where retailers are seeing higher levels of violence. Last year, 81% of respondents reported that ORC offenders had grown more violent. Compounding that this year, more than two-thirds (67% said they were seeing even more violence and aggression from ORC perpetrators compared with a year ago.

NRF advocates to stop ORC

NRF has long asked Congress to give law enforcement funding and other resources to combat ORC. Last year, NRF successfully advocated for the bipartisan INFORM Consumers Act, which was passed at the end of 2022 as part of the omnibus spending package and signed into law this January. The measure will help bring transparency to online marketplaces by requiring them to verify the identities of high-volume third-party sellers. Doing so would help curb the fencing of stolen merchandise and address the sale of counterfeit goods. NRF welcomed passage of the bill.

Market transparency alone will not stop ORC, which is why NRF strongly supports the Combating Organized Retail Crime Act. The legislation, which has been introduced in both the House and Senate, includes many of the proposals submitted to Congress and the Biden administration by NRF. It would establish a new Organized Retail Crime Coordination Center to align counter-ORC activities nationally and internationally by developing national-level ORC intelligence, facilitating information sharing and cross-agency investigations, and serving as a center of expertise for training and technical assistance.

In addition to efforts in Congress, NRF has worked closely with state lawmakers, local law enforcement and news media across the country to draw attention to ORC. The effort has been successful, with at least 32 states passing ORC laws, and NRF is currently urging states to update the definition of ORC and adopt sufficient criminal penalties. But with incidents often crossing state lines, 87% of retailers surveyed say a federal law is still needed.

NRF supports ORC alliances and other regional task forces that bring together law enforcement, prosecutors and retail investigators. NRF’s ORC/Investigators Network includes more than 1,000 retail loss prevention professionals and federal, state and local law enforcement officers who share information, develop strategy and form partnerships to fight ORC. And ORC is a key focus of the NRF PROTECT loss prevention conference each year.

For media inquiries about organized retail crime, please email press@nrf.com or call 855-NRF-PRESS.