Organized retail crime goes beyond store shoplifting

Cargo theft, ecommerce and digital fraud are growing contributors to ORC
VP, Asset Protection & Retail Operations
July 19, 2023

We’ve all seen news footage of brazen retail crimes — groups of individuals filling their arms or bags with merchandise that’s then sold to a “fence” for resale or online to an unwary consumer. Store-based stealing might be the most visible element of organized retail crime, but it’s not the only form of ORC impacting the retail ecosystem.

Cargo theft increased 41% over last year in the first 20 weeks of 2023 according to CargoNet, a Verisk business. Organized retail crime groups involved in cargo and supply chain theft are often more structured, operating as a business capable of moving merchandise in larger quantities through illicit, as well as legitimate, business channels.

Organized retail crime

Learn more about organized retail crime in the retail industry and stay updated on prevention.

Recent law enforcement investigations include a $50 million recovery by the California Highway Patrol and a $7 million seizure of Nike footwear stolen from the port of Los Angeles. These incidents include trailers full of merchandise stolen via fraudulent or fictious schemes or theft of goods from containers, warehouses or supply routes.

Ecommerce and online fraud are growing contributors to ORC, not only involving product or merchandise but also digital commerce and currency. Retailers continue to battle ecommerce fraud with a greater convergence between online and in-store fraud methods. Buy online, pick up in store and buy online, return in store services are used by organized retail crime groups to obtain merchandise or convert stolen merchandise into cash.

Theft methods also include triangulation fraud, which is the purchasing of merchandise with stolen credit cards or online account credentials for the purpose of reselling obtained merchandise to an unaware third-party consumer. These methods harm the retailer twice: it suffers the loss or cost of the item, plus a financial chargeback for the fraudulent purchase on a stolen credit card.

Retailers are also experiencing ORC-related crimes involving gift cards. ORC activity includes fraudulently altering gift cards, which when purchased can be used or re-sold by fraudsters. Phone and email scams prey on the elderly or retail employees, tricking them into purchasing gift cards to “pay off” false bills, fake bail or threat of arrest, or even posing as a CEO or retail executive of the retail company.

A 2022 study by the Federal Trade Commission found consumers had reported more than 48,000 cases of gift card fraud totaling more than $228 million in losses. One can safely assume that most of those gift cards came from the retail industry.

ORC-related crimes are not only conducted by local gangs, juveniles or those inflicted with addiction or challenges. Federal and state law enforcement agencies across the nation have been investigating various international organized theft groups involved in various ORC-related crimes.

Several South American theft groups have been known to engage in sophisticated, high-dollar jewelry burglaries across the nation. Law enforcement has indicated that some of the groups work with military precision, conducting reconnaissance and methods to conceal detection and defeat security systems. Many of these groups have been known to also engage in home burglaries throughout affluent neighborhoods across various states.

Take action

ORC is on the rise. Reach out to your representative in Congress and ask them to support the CORCA bill to fight retail crime.

Contact Congress

Protecting products against organized retail crime groups requires protecting the entire retail ecosystem, including digital assets. The passage of the INFORM Act is a first step in national legislation to help against organized crime. NRF was a leader in the efforts to enact the INFORM Act and continues our member advocacy efforts with the Combating Organized Retail Crime Act of 2023 (S. 140/H.R. 895).

With bipartisan support in both the House and the Senate, the CORCA bill will bring greater federal law enforcement support and resources to aid state and local law enforcement in these sophisticated investigations. Passage of the CORCA bill is another step in our nation’s effort to reduce the impact of organized retail crime.

NRF has a grassroots campaign supporting the passing of the CORCA bill. As an NRF member, retailer, industry partner or public citizen, you can help by visiting our campaign and asking your senator or representative to support and vote for this bill. It will take a community effort to make this happen — visit the NRF Organized Retail Crime page to act!

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