It’s no secret that people are going to steal when they go into stores. However, there is an element of organized crime that contributes to retail theft that causes major damage to retailers across the nation. This is a major blow to major and smaller retailers. The National Retail Federation (NRF) has reported that retailers are being hit up to the tune of $30 billion every year, thanks to organized retail crime (ORC).
According to the NRF, “Organized retail crime is the large-scale theft of retail merchandise with the intent to resell the merchandise for financial gain.” ORC groups enlist teams to steal large quantities of merchandise, then that merchandise is flipped through a fencing operation (online auction sites, flea markets, other retailers). Not only are stores hit physically by people in the stores, but whole trucks are hijacked and some use fraud schemes, like using stolen or cloned credit cards or replacing bar codes to pay lower prices. Others steal items and “return” them to the stores for cash or gift cards. ORC goes beyond mere shoplifting, which is done for personal gain.
In a 2014 survey conducted by the NRF, 88% of retailers surveyed said they’d been hit by ORC crews in the past year. 60% said that the number of incidents had increased from the year before. The average case of theft cost retailers $2.8 million, but 13% reported losses of more than $5 million. Some of the ORC thefts involved violence, making the workplace more dangerous for employees.
The thefts force retailers to spend money on personnel and technology to beef up security. This means higher prices for customers. The resale of products like non-prescription drugs and baby formula also poses a threat to the public as some are sold after-expiration or cut to stretch into larger quantities. It was also reported that 45% of the individuals arrested for the thefts are “also involved in the use or sale of drugs, illegal weapons and other crimes.”