A retail theft ring operated for almost a year before the Wilmette, Illinois police department finally captured the thieves per an ABC7 Chicago report. The police recovered an estimated $2 million worth of stolen products. It turns out the thieves would remove retailer information from the stolen items and sell them online.
In New Jersey, a family-run crime theft ring bought stolen goods from shoplifters and then resold them according to Patch. The organized retail crime ring operated out of a storefront called Everything Wireless. Shoplifters would bring stolen items to the store and exchange them for cash.
The crime ring resells the stolen merchandise in the store or online. Fortunately, the police arrested the family members and the store employees and successfully indicted them.
KOB 4 reports a couple in Albuquerque has stolen from Home Depot and other stores at least 14 different times. They'd take thousands of dollars of items and then resell them in an online marketplace. Home Depot's organized retail crime investigators worked with law enforcement to successfully stop the couple.
These are just three of many organized retail crime stories that made the news in 2019. It's a sign that ORC is on the rise.
"Organized retail crime continues to present a serious challenge to the retail industry," National Retail Federation Vice President of Loss Prevention Bob Moraca says in an NRF press release. "These criminal gangs are sophisticated, but so are retail loss prevention teams. Retailers are committing more resources and constantly evolving their tactics to fight this ongoing challenge."
A new report from the National Retail Federation has found that organized retail crime continues to be a growing problem. The latest study reveals that 97 percent of retailers have been victims of ORC in 2019.
Moreover, 68 percent have experienced an increase in organized retail crime activity. Losses have averaged $703,320 per $1 billion in sales. Considering it's the fourth year in a row the numbers have surpassed $700k, companies are putting a higher priority on taking steps to fight ORC.
ORC does not just take place in stores. Retailers' supply chains give ORC gangs the opportunity to steal in high quantities prior to the merchandise arriving at stores. More than 7 out of every 10 surveyed retailers say they've experienced cargo theft in 2019.
Most cargo thefts transpire en route from the distribution center to the store. A third of cargo thefts happen at the distribution center. Another third strike between two stores. After stealing the merchandise, many thieves exchange the stolen items for gift cards.
One of the more interesting findings is that raising the dollar threshold for felonies is causing a growing number of problems for retailers. Stores in states that have increased the threshold have seen a corresponding rise in average ORC case value. It affects many stores because 39 states have increased felony thresholds since 2000 according to Pew Charitable Trusts.
NRF estimates shrinkage totaled $50.6 billion. The leading causes are robbery, employee theft, shoplifting, and organized retail crime.
The Los Angeles Times reports that Home Depot has seen a huge increase in shrink. Company executives say organized retail crime is responsible for the theft of millions of dollars' worth of goods. The situation has grown to the point that it will hurt Home Depot's financial results.
The company is taking steps to reduce shrink such as relying on technology and machine learning to predict where crime rings will hit. Home Depot plans to add technology to prevent power tools from working until they go through the point-of-sale system. Another measure involves the removal of high-value items from the sales floor.
The retailer tells CNBC that if it does not get shrink under control, it fears it may have to pass on the increased costs associated with ORC to customers. Fortunately, it looks like Home Depot's efforts to implement deterrents including video surveillance and alarmed spider wraps on high-value items are paying off.
The company indicates that organized retail crime affects more than the retailers' bottom line. It also hurts the community. "Organized retail crime drives other crimes," says Scott Glenn, Home Depot vice president of asset protection. "It drives drugs. It drives guns. It drives human trafficking."
In response to the ORC increase, the NRF study says that over half of the retailers are investing more in technology. Retailers are working to raise their loss prevention budgets.
They're also changing policies to counter the rise in organized retail crime. One-third have changed their return policy with an additional 8 percent planning to follow suit. They're updating their point-of sale, employee screening, and trespass policies.
Although ORC has increased, retail theft and fraud have decreased by one-third since 2008. That's largely due to the expansion of video surveillance cameras and anti-theft tags on products. However, self-checkout stations and fewer employees on the floor have not done much to slow organized retail crime rings.
Retailers added self-checkout stations to save on labor costs. Unfortunately, it has had a negative side effect. Shoplifters would scan one item and take two or three items. Because of these self-checkout stations, retailers have fewer employees on the floor, which means fewer eyes on shoplifters.
Most retailers tell employees not to chase after shoplifters. They don't want to risk a violent confrontation or public safety because some members of organized retail crime rings are violent criminals. ORC knows about this hands-off policy in confronting suspects and takes advantage of it.
Michigan State Police tells MLive that they've arrested 47 people for ORC in 2014. That number jumped to 215 in 2018. The story quotes Richard Hollinger, retired University of Florida criminologist who oversees NRF's annual security survey. Hollinger states that technology helps deter some organized retail crime. However, organized retail crime rings have become more sophisticated.
Hollinger credits video for making a huge difference. It allows retailers to provide law enforcement with evidence that includes videos of the suspects and photos of the get-away vehicle's license plate.
James VanDyken, Kalamazoo County Undersheriff, says the video surveillance is a game-changer. It's the most common evidence VanDyken gets and it makes it easier to catch criminals. Michigan Retailers Association CEO Bill Hallan believes video surveillance is responsible for the positive effect on loss prevention.
Some retailers have increased prices to offset the losses from organized retail crime and retail security. When you opt for the right video surveillance services, it's possible to see a fast ROI without passing the costs to customers.
Using a combination of analytics and human intelligence, live video surveillance can help catch crime before it happens or as soon as it happens. When a trained operator receives an alert of suspicious activity, the operator can warn the suspect through an audio speaker. This deters some intruders, but not all, especially aggressive organized retail crime rings.
So, the operator calls the police and keeps them apprised of the criminals' movements. In some cases, law enforcement arrives fast enough to arrest the suspects while they are still on the property. For times when the suspects get away, video surveillance can typically capture enough information to aid locating the suspects and lead to an arrest.
What about using trained security guards? They can be highly cost prohibitive and they don't always safely respond to ORC's aggressive tactics. While live video surveillance contains a human element, it can monitor your retail property for a fraction of the cost of onsite security guards. It's also a way to add security and obtain evidence without putting anyone in harm's way. Trained operators are safely located offsite.
Video surveillance can do more than deter organized retail crime. One of the biggest challenges facing retailers is parking lot security. According to the Bureau of Justice Statistics, One out of every 10 property crimes occur in parking lots or garages. They're also the number 3 location for violent crime per FBI Crime Data Explorer.
You can use video surveillance to enhance efficiencies. It can spot customer service problems and bottlenecks. Besides that, retailers can be held liable for injuries that occur on the property. Video surveillance can identify safety hazards to ensure the store maximizes safety and avoid liability.
Moreover, video surveillance shows insurance providers that you reduce your risk. As a result, they may lower insurance premiums.
To maximize retail security and minimize costs, consult with a live video surveillance specialist. They know how to strategically place cameras for the greatest amount of views without posting too many cameras. Every retail property is different and security specialists can determine the best setup for your property.
Here are some retail security services available:
As you investigate a video surveillance system, ask the vendor about retaining video footage. You want to ensure they store it long enough in case suspicious activity is brought to your attention long after it happens. To learn more about live video surveillance, pick up your free guide to retail security or contact us.