Money & Business

Organized Retail Crime Growing, Survey Says

By / Oct 20, 2016 (iStock/Thinkstock)

Organized retail crime is a $30 billion issue affecting the retail industry that continues to grow, according to a new study from the National Retail Federation.

According to the National Retail Federation’s 12th annual Organized Retail Crime survey, ORC is affecting more retailers than ever before. In fact, all 59 survey respondents said they had been a victim.

“Retailers continue to deal with the challenges that come with fighting organized retail crime,” NRF’s VP of Loss Prevention Bob Moraca said in a statement. “Every day, criminals are getting more creative in the ways they manipulate the retail supply chain. Combating ORC is a full-time job, and it is a constant battle industry-wide for retailers large and small to stay one step ahead of these savvy criminals.”

The study found that 83 percent of retailers say ORC—which includes shoplifting and larger theft operations—is increasing and that average losses has jumped from $453,940 per $1 billion in sales to $700,259 since last year.

Moraca explained to Associations Now that in past years about 88 to 94 percent of respondents admitted to being ORC victims. “Organized retail crime is growing because it’s lucrative,” he said.

In addition, according to the NRF’s most recent National Retail Security survey, ORC has overtaken internal threats as the number-one cause of inventory loss in the last two years.

Moraca said that those involved in retail crime often steal inventory and try to sell it back to the retailers. If they receive a gift card or store credit in return, they will exchange it for cash, usually online. Almost 70 percent of survey respondents have seen this happen.

But the theft can happen at any point. “It happens all along the supply chain from the manufacturer to the warehouse to being distributed to the stores, right off the store shelf, right out of the backroom of the store,” Moraca said.

To help retailers protect themselves, NRF provides defense guides and hosts a loss prevention council. Moraca said the main lines of defense are properly training associates in identifying and reporting potential crime, installing video surveillance and analytics technology, and utilizing article surveillance or censors on products.

To prevent larger-scale crime, 34 states have already passed ORC laws, though 56 percent of those surveyed who lived in states where such laws existed said they haven’t received increased support from law enforcement as a result. NRF is also advocating for a federal level ORC law to simplify legal processes if a crime operation stretches multiple states.

“Organized retail crime continues to impact retailers at a larger scale now more than ever before,” VP for Supply Chain and Customs Policy Jonathan Gold said in the release. “ORC also poses a threat to unwitting consumers who may purchase stolen merchandise that is not stored properly or may have expired. It is critical for our industry to continue pushing for strong federal legislation that would properly define ORC and make it a federal crime. Until there is a federal ORC law to counter this increasing criminal activity and the ability to transport stolen products across state lines, it will be nearly impossible to put a dent in this $30 billion-a-year problem that threatens retailers, the economy, and consumers across the country.”

Alex Beall

Alex Beall is an associate editor for Associations Now with a masters in journalism and a penchant for Instagram. More »

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