Retailers are alarmed by the rising rate of organized retail crime in the past years. The latest survey by the National Retail Federation found out that the retail industry loses an average of $719,548 for every $1 billion in sales. This number is a 2% increase from the 2020 statistics and is the fifth year in a row that surpassed the $700 thousand mark.
What is Organized Retail Crime?
Organized retail crime or ORC is the general term associated with professional shoplifting and stock theft. In the retail industry, a person who shoplifts for personal gain can qualify as theft but falls short of being categorized under ORC. Instead, ORC refers to a syndicate of criminals who would travel from one area to another to steal items from a store.
ORC makes use of professional thieves and a network of “fences” and “boosters” who can hit from eight to 15 retail outlets per day. Fences will then repackage and sell the stolen goods an average of 20 cents on the dollar.
What do ORC target?
In past posts we have talked about how ORC theft is largely a crime of opportunity. The items that ORC steals vary depending on the area and what items are fast-moving. ORC targets items that consist of everyday household items which can quickly be sold to the public. Likewise, ORC tends to steal high-end designer items that sell at a lower price to willing buyers. ORC targets stores, warehouses, cargo, and every type of retail establishment, including supermarkets, discount stores, convenience stores, drugstores, and pharmacies.
What Are Retailers Doing?
60% of retailers are prioritizing their ORC preventive measures. Most retailers have increased their guidelines in accepting returned items since returning stolen items in exchange for store credit or gift cards are part of ORC’s modus operandi. We’ll be discussing that in a future post because we offer a terrific product that prevents return fraud – contact us if you want more information.
Likewise, retailers have implemented technology such as DNA tagging or QR code identification to identify their products when sold elsewhere. Ink tags are also being used for clothing as a deterrent for theft. While they do not prevent the items from being stolen, these ink tags will stain the clothes if the tags are removed outside the retail store.
Retailers are also aware that staff awareness should be part of the solution. While using some technology can be part of theft deterrent measures, staff involvement is critical in preventing losses from ORC. Staff should be trained to alert to ORC activities and report suspicious activities immediately to store management, who will call ORC investigators.
The Need to Revise Federal Laws on ORC
Retailers have cited that current state laws are partly to blame for the rise of ORC. Existing federal laws have increased the dollar threshold amount for theft to be considered a felony. For most retailers, these relaxed guidelines on shoplifting laws have attributed to the increase in ORC rates. Most retailers agree that stricter federal laws on shoplifting are needed to minimize losses due to ORC.
The best thing a retailer can do in the near term to prevent losses is to invest in impenetrable but straightforward products like tamper-evident tape, cargo, and pallet security, making it nearly impossible to tamper with products without leaving evidence behind.