Posted: Nov 03, 2015 | By: cathyplumb
The National Retail Federation’s Organized Retail Crime survey was conducted July 13 to Aug. 6, 2015. Sixty-seven retailers completed the survey with the purpose of identifying the scope of organized retail crime throughout the entire retail industry. Participant stores included department/big box; discount; drug; grocery; restaurant, and specialty retailers.
Nearly all (97%) retailers surveyed reported that they have been a victim of ORC in the past year, up from 88.2% last year. The top hot spots for organized retail crime are, by rank:
• Los Angeles
• New York
• Arlington/Dallas/Fort Worth
• San Francisco/Oakland
• Orange County, Calif.
Retailers are noticing the increased support on the federal and state level to address the problem of organized retail crime. 15.4% have seen more federal law enforcement efforts, up from 9.6% last year. Meanwhile, 43.1% have seen more support from local and county officials, and 24.6% have seen more support from the state level.
The increase in organized crime in retail is causing federal law enforcement to put it on the front burner, because the crimes often cross state lines, using complex fencing operations with locations that are sometimes hard to pin down. Also, generous return policies that attract customer loyalty also attract thieves; two-thirds of respondents say thieves are returning stolen merchandise for store credit, and then selling that merchandise credit to secondary market buyers or sellers.
The problem has escalated to the point where multiple retailers and law enforcement agencies across multiple locations and jurisdictions are banding together to form the Retail Organized Crime Coalition (ROCC).
The ROCC, which will officially launch and introduce its members at the Retail Fraud–New York conference on Sept. 24, will combat chronic retail organized crime through case referrals, education and the distribution of timely intelligence. Founding members include Barnes & Noble, whose discovery of a sophisticated organized crime that stole $500,000 worth of textbooks from Barnes & Noble stores across the country for resale by mail order led to the initial idea that became ROCC.
Retailers on average report they lost $453,940 per $1 billion in annual sales over the past year due to organized crime, according to the NRF’s 11th annual survey, which adds up to $30 billion.
One of the most important ways organized crime affects retailers is before the product even reaches the store: 37.9% of those polled have experienced cargo theft in the past year, up from 35.4% last year. In other findings:
* Two-thirds of respondents say they have experienced thieves returning stolen merchandise for store credit, to then sell that merchandise credit to secondary market buyers or sellers.
* Almost 60% of retailers have recovered stolen merchandise from a physical fence location in the past 12 months.
* These criminals often run their operation online, for the anonymity it offers. Over the past year, 59.7% of retailers surveyed say they have identified or recovered stolen merchandise from an e-fencing operation.
More companies are investing in tools and resources to combat the growing problem. Overall, 47% of those surveyed say they are allocating additional resources of some kind, up from 41.3% last year.
That’s likely because the attention now is coming from the top: 62.7% of those surveyed said that senior leaders in their companies understand the severity and complexity of the issue, up from 60.5% last year.
Robert Moroca, NRF’s Vice President of Loss Prevention, has talked about another alliance retailers are making in describing the working relationship with Coalition of Law Enforcement and Retail. He says, “Locally, we want to hook up retailers with law enforcement. We work to combat crime, to get criminals off the streets so they know there are consequences for their actions.”
Moraca notes the NRF/CLEAR alliance is concerned with more than just ORC, citing areas like cyber breaches and protecting customers’ proprietary information, as well as returns fraud.
“The issue is borderless,” he says. “In the world of electronics, designer goods and other high-end merchandise, we’ve found the goods are worth three to five times more than their normal value in third-world countries and other international locations.”TAGS: retailer trends,