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Organized Retail Crime

Organized Retail Crime

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The Issue

Organized retail crime is the large-scale theft of retail merchandise with the intent to resell the merchandise 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 then converts the stolen merchandise into cash. Stolen merchandise can be sold through online auction sites, at flea markets, and sometimes even to other retailers. In addition to targeting stores, ORC gangs sometimes hijack truckloads of merchandise, and they commit a variety of 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 clearly distinct from ordinary shoplifting committed by individuals seeking goods for personal use.

Why it Matters to Retailers

ORC costs retailers nearly $30 billion a year, with 95 percent of retailers surveyed by NRF in 2017 saying their companies had been victims and 67 percent saying the number of incidents had grown over the year before. The thefts cost retailers more than $725,000 for every $1 billion in sales. ORC is also a safety threat to retail workers, with a quarter of retailers saying they had seen an increase in aggression by criminals and a number reporting the use of Mace chemical spray and Taser stun guns. The losses drive up costs for retailers and, in turn, prices for consumers. And the theft and re-sale of items like non-prescription drugs or baby formula, which might be stored improperly, sold after expiration or “cut” into larger quantities, creates health risks. Finally, an earlier NRF survey found that ORC is often a “gateway” crime, with 45 percent of those apprehended also involved in the use or sale of drugs, illegal weapons and other crimes.

NRF Advocates to Stop ORC

NRF has spent the past several years seeking passage of legislation that would make ORC a federal crime, establish appropriate penalties and give law enforcement funding and other resources to combat ORC. More than half a dozen bills have been introduced in Congress, but all have hit stumbling blocks and no legislation is currently pending. In the absence of congressional action, NRF has worked closely with state lawmakers, local law enforcement and news media across the country to draw attention to the issue. NRF has also helped local police piece together patterns of incidents that might previously have been regarded as ordinary shoplifting. The effort has been successful, with a total of 34 states passing ORC laws. But with incidents often crossing state lines, 70 percent of retailers surveyed say a federal law is still needed.