Organised retail crime on the rise

In its ninth annual Organized Retail Crime (ORC) Survey, the Washington-based National Retail Federation (NRF) found that 93.5 percent of retailers have been a victim of organised crime in the past year. Eight in ten of those surveyed believed

that ORC had increased in the past three years in the United States and in fact, the number of those affected has been in the 90 percent range in that time frame.

The survey defines organised retail crime as “professional shoplifting, cargo theft or fraudulent activity conducted by more than one person with the intent to convert illegally obtained merchandise into cash or financial gain, typically through online or offline sales”.

“We are extremely concerned by the organized patterns that are taking place in the retail industry right now as these crime gangs continue to find ways to manoeuvre the system. Though retailers continue to make great strides in their fight against organized retail crime, savvy, unconscionable criminals are selling stolen merchandise for a profit that doesn’t belong to them. With the types of organized retail crimes changing in severity each year, retailers remain vigilant in their fight against ORC,” said Rich Mellor, the NRF’s vice president of loss prevention.

Organised retail crime costs retailers 30 billion dollars a year

Organised retail crime gangs steal billions of dollars worth of merchandise each year – 30 billion US-dollars to be precise. The most common types of organised retail crime are eFencing (72 percent), i.e. putting stolen goods up online, fencing (69 percent), i.e. putting them up for sale at a physical location and cargo theft (48 percent), i.e. before merchandise even hits the stores.

An alarming new trend is the rise of gift card/store merchandise credit fraud, which now makes up the highest percentage: Almost 78 percent of the senior loss prevention executives at the 77 retail companies who completed the survey confirmed that they had experienced it. So called “boosters” return stolen merchandise with a receipt for store credit via a gift card, which they then sell for cash. “In conversations with retailers and law enforcement, we’ve learned that there are already defrauding processes being put in place, but retailers continue to lose millions of dollars to this enterprise scheme,” said Mellor.

Of the top targeted items, fashion retailers and brands will be alarmed to know that high end denims are in fourth place after baby formula, laundry detergent and energy drinks. Allergy medicines and cell phones are also in high demand among organised retail crime gangs.

One of the more distressing trends is that thieves increasingly resort to violence to avoid being apprehended – while that figure was at 13 percent in 2011, it rose to more than 15 percent in 2012 and is now at more than 18 percent. Needless to say, this puts store personnel, customers and law enforcement officers at great risk.

Image: Daniel Lobo