We’ve all seen it on the news. On any given day, you can turn on the TV and find coverage of another smash-and-grab incident at a local retail store.
While organized retail crime is certainly not new to retailers, it’s clear the frequency of these dangerous incidents is escalating. Quickly. And it’s drastically impacting the customer shopping experience.
How is organized retail crime different from shoplifting?
Shoplifting and ORC are often misunderstood and used interchangeably. Shoplifting is the act of taking something without paying for it. While ORC involves shoplifting, what criminals do with the merchandise after the fact is the distinguishing factor.
Organized retail crime
Learn more about the current status of organized retail crime in the retail industry and updates on prevention.
The difference when someone steals items like baby formula, deodorant and laundry detergent for either personal consumption or financial gain makes all the difference. Shoplifters typically steal products solely for personal use or sometimes even for thrill-seeking behavior.
Organized retail crime is much more involved — the act of shoplifting is planned and executed by a larger criminal enterprise, with stolen products illegally resold to the public market for profit. ORC groups are highly sophisticated with operations that can easily top hundreds of thousands of dollars.
Why does it matter?
First and foremost, retailers’ biggest concern is safety. Unfortunately, retailers have seen a dramatic rise in the violence and aggression associated with these crimes post-pandemic.
No merchandise is more valuable than the safety of retail employees and their customers. Every time someone enters a store to steal, they are putting retail employees and shoppers directly in harm’s way.
As more acts of open and blatant thefts take place in stores, the negative effects are apparent for both retailers and consumers alike. When products are stolen, they are no longer available for the consumers who need them.
Shoppers are now seeing everyday items like toothpaste and dish soap behind lock and key. Retailers know it’s an inconvenience for customers: The anti-theft security measure can lead to lost sales from customers who have to wait for an employee to unlock a cabinet so they can access a product.
As the theft of merchandise continues, the cost of securing those items skyrockets. Retailers already operate on very slim margins and can only absorb so much cost to remain profitable. With ORC incidents continuing to surge across the country, consumers might also see higher prices in the near future.
How widespread is the problem?
Retail theft occurs in every community, large and small, throughout the country. NRF’s most recent numbers show retail loss is a nearly $100 billion problem, and there’s evidence the problem is growing. One national retailer recently said the impact on its organization would total more than $500 million this year alone.
A new study from NRF and global risk advisory firm K2 Integrity found that ORC groups are getting more sophisticated — growing in both their scope and complexity — and making it harder for retailers and law enforcement to stop them.
Criminal groups have become more brazen and violent in their tactics. That significantly impacts consumer confidence and the overall shopping experience. And it has led to hiring challenges for retailers in an already competitive labor market.
In some cases, the rampant crime and the dangers coupled with it have led to slower foot traffic. It should come as no surprise that these factors can have a negative impact on businesses and can contribute to the decision to close a specific store location. Several national brands recently closed locations in the San Francisco area, with many saying that retail crime was a factor.
Retailers have long been an integral part of the communities they serve. When a retailer is forced to close its doors, it creates a ripple effect within that community with the added loss of tax dollars, quality jobs and accessibility to goods.
What are retailers doing to stop ORC?
Retailers are doing everything in their power to curtail these crimes. From increasing security efforts in stores and allocating more resources toward loss prevention and asset protection, it is a top priority for the industry. In some cases, retailers have gone directly to manufacturers for tracking or disabling products that are stolen.
Reach out to your representative in Congress and ask them to support this bipartisan solution to fight retail crime.
In addition to retailers’ efforts, consumers also have a responsibility. It’s important for shoppers to be aware of their surroundings in retail stores. If you notice suspicious activity or witness an incident — and can do so safely — report it immediately to store personnel or law enforcement.
And remember the adage that if something seems too good to be true, it more than likely is: Stolen items from ORC groups can be resold in online marketplaces, flea markets and other locations at significantly discounted prices.
What is being done at the national level to prevent this from happening?
As retailers continue to adapt to rapidly changing criminal tactics, federal support is also needed. NRF has spearheaded industry efforts for policy reform on ORC legislation, including passage of the INFORM Act, which will require online marketplaces to verify the identities of high-volume third-party sellers.
Retailers have also been advocating for the Combating Organized Retail Crime Act in Congress to amplify resources and coordination among federal, state and local law enforcement agencies.
NRF will convene more than 2,000 retail professionals and security experts next month in Texas for NRF PROTECT to share best practices and see the latest technology and solutions to prevent retail theft.
By coordinating across the industry with law enforcement, solution providers and policymakers, retailers are working together to combat organized retail crime.