Retailers Battling Organized Crime Rings
Organized bands of criminals are stealing retailers and ultimately consumers blind. That’s the bottom line of a new study released by the National Retail Federation.
According to the third annual Organized Retail Crime survey, 79 percent of retailers report having been victimized by organized crime activity within the past year. Seventy-one percent said the pace of organized retail theft has increased over the same period when compared to previous years.
“Despite retailers’ best efforts, organized retail crime continues to proliferate in stores around the country,” said Joseph LaRocca, vice president of loss prevention at the NRF, in a press release.
“Organized retail crime rings are sophisticated and smart, but with the partnerships created between retailers and law enforcement agencies, retailers have a real chance at stopping these criminals dead in their tracks,” he said.
Last month the NRF announced the creation of the Law Enforcement Retail Partnership Network, a secure web-based database that will put retailers and law enforcement agencies on the same page in tracking organized retail crime.
Sixty-one percent of retailers reported having been able to identify and recover merchandise stolen from stores. In many instances the merchandise is discovered at flea markets or through online auction sites, according to the NRF.
Discussion Questions: How aware are retailers of the organized retail crime problem? What have been the most effective ways of combating this crime to date? Do consumers have a role to play in dealing with this issue?
The US Department of Justice keeps an excellent databank of crime reports from 17,000 law enforcement agencies. Their most recent report is at http://www.ojp.usdoj.gov/bjs/welcome.html
There is no mention at all of “organized crime” relating to retail stores or anywhere else. In fact, the 2005 statistics (the most recent available) show theft at “the lowest level ever recorded”
The NRF organized crime survey makes exciting headlines, but it’s more likely that internal theft is much greater.
Furtive figures who concentrate on capitalizing on retail crime with various charades and lively gaillards are an inventive, and occasionally a desperately spiked-up, bunch. Their tactics are a street-smart holding company where the culprit hands an accomplice, perhaps even a store employee, the goods while the security officer confronts or searches him. The solution, whatever it really should be, rests in large part in being able to think like the criminal mind and then acting accordingly in that mindset. Otherwise the problem persists.
FMI had 2 pretty heavily attended session on LP this year, and both of them focused almost exclusively on organized retail crime. This is definitely a problem–and a scary one, because a lot of this theft is heavily intertwined with illegal drugs, where thieves are in stores stealing in order to feed a drug habit. How would you feel about approaching a potential shoplifter if you knew they might be either high or strung out?
But the most interesting point that one speaker made–Bill Alford, from International Lighthouse Group–is that having an employee approach suspicious people is actually one of the best deterrents. Not to be accusatory–just to let them know they’re being watched.
With more and more self-service making it into stores, does that create an even easier environment for thieves?
Organized crime is a problem in retail, and I suspect probably more so that retailers are aware. The only way to really understand the extent of loss is to fully understand your selling pipeline from the beginning. Although IT solutions to tackle this problem are out there, few retailers can really claim success. As a result, mysterious legitimate pipeline activities lead to mysterious illegitimate pipeline activities. The result: undocumented loss.
Not to be overlooked, organized retail theft often starts within. A retail executive recently told me that it’s estimated that 30% of what is stolen from the stores are either directly stolen, or arranged, by employees and outside workers closely intertwined with inside operations.
Whether it’s merchandise being stolen from a store or a CEO conspiring with a corrupt board of directors to get an undeserved multi-million dollar bonus, organized crime is like inflation and taxes — always and everywhere. Sadly, it appears there is no light at the end of the tunnel and we all must pay the price.