Organized retail crime (ORC) refers to professional criminal enterprises ranging from regional gangs to international crime rings and other organized crime focussing on retail environments. Operations include truckjacking, shoplifting, smash and grab, cargo theft, and cargo diversion. One person acting alone is not considered an example of organized retail crime. Working in teams, some create distractions while others steal items judiciously, indiscriminately or violently. Often, they are stocking up on specified items at the request of the organized crime or gang leader. It is not uncommon for the criminals to have accomplices working in the retail store or corporation.[1][2]

According to Brian J. Nadeau, former program manager of the FBI's Organized Retail Theft Program, “These aren’t shoplifters taking a pack of gum. These are professional thieves."[3]

The FBI estimated in 2010 that the losses attributed to organized retail crime were as high as $30 billion a year.[3]

United Kingdom

In the UK, respondents to the British Retail Consortium's annual crime survey for the financial year 2013-2014 estimated that organized retail crime accounted for 40% of all shop thefts.[4]

Canada

The Police Chief of Toronto has indicated that organized retail crime is a five billion dollar problem. Shoplifting gangs are increasingly violent.[5]

Australia

The National Retail Association says: "Individuals are often assumed to be working alone when shoplifting however, commonly they are not working alone but with others who create distractions whilst goods are stolen, in order to meet the requirements of the crime ring leader".[6]

United States

Organized retail crime experienced a rise by 2023, in which year Nordstrom,[7] Macy’s, and Old Navy[8] all publicizing major organized shoplifting activity. Target announced in September 2023 that theft and organized retail crime were drivers in its $500 million annual decrease in profits. Some store branches of major chains were closed.[9]

Theft had beyond industry organization RILA's published levels of $70 billion in 2020. Patterns had emerged of crime rings consisting of two parts - persons who steal high volumes of goods from multiple stores, and those who sell the stolen goods, sometimes via online marketplaces, converting them into cash. Walmart and Amazon posted banners on their websites asking their customers to report products for sale on other sites that they believed might have been stolen, in line with a new law that went into effect in June 2023.[10]

In September 2023, gangs in Philadelphia looted downtown branches of Apple, Lululemon, Foot Locker, and Gamestop stores.[11]

However, the National Retail Federation said that same month that the effect of theft on retailers’ bottom lines was about the same as in previous years, with total retail shrinkage at $112 billion in 2022 (1.55% of sales), up from $93.9 billion (1.44% of sales) in 2021. External theft, including organized retail crime, represented 36% of losses, versus 37% in 2021. Other contributors were employee/internal theft (29%), and process/control failures (26%).[12]

From 2022 through August 2023, 9 U.S. states passed laws to impose harsher penalties for organized retail crime offenses.[13]

Notable cases

In early 2008 in Florida, a single shoplifting investigation turned up a massive organized enterprise. Operating for at least five years, criminals had stolen up to $100 million in medicine, health and beauty goods.[14]

Texas FBI agents pulled over a rental truck, leading them to $2.7 million in stolen assets. The goods included $1 million in stolen baby formula that was stored in rodent-infested garages with no temperature control.[15]

In January 2013, in Pennsylvania, West York Police (York County) announced the arrest of over 130 people and the organizer of a major organized retail crime ring in which the individuals targeted over 90 stores at over 300 locations in 5 counties in Pennsylvania and 2 counties in northern Maryland, with an estimated loss to retailers at $1 million.

Current US legislation

Civil demand letter, which third party collection companies/ lawyers mail to people who are caught shoplifting from retailers

On July 15, 2008, Reps. Brad Ellsworth, D-Indiana, and Jim Jordan, R-Ohio, introduced the Organized Retail Crime Act of 2008[16] that would make it a felony to engage in activities that further organized retail crime. Specific and narrow obligations upon on-line marketplaces known to be used by high-volume sellers of stolen merchandise are also included to benefit legitimate online businesses. According to Rep. Ellsworth, "The bill will provide law enforcement officers and retailers with the tools they need to reveal the cloak of anonymity and bring these criminals to justice; while at the same time, preserving the online marketplace for law-abiding citizens."[17]

On August 1, 2008, Sen. Dick Durbin, D-Ill. introduced the Combating Organized Retail Crime Act of 2008 that would give law enforcement the ability to prosecute, among other things.

In January 2023, Sen. Chuck Grassley, R-Iowa, and Sen. Catherine Cortez Masto, D-Nevada, introduced the Combating Organized Retail Crime Act (S. 140), which would update current federal criminal penalties related to organized retail crime and establish a new law enforcement coordination center within Homeland Security Investigations at the Department of Homeland Security to improve coordination between federal, state and local law enforcement agencies. Companion legislation was introduced later in 2023 in the House of Representatives (H.R. 895), sponsored by Reps. Ken Buck, David P. Joyce, Susie Lee and Dina Titus is co-sponsored by nearly 70 other representatives. This legislation is supported by the National Retail Federation and other retail industry groups.[18]

Multi-national crime

Some criminal organizations are multi-national (or trans-national) with operations in and between several different counties.[19] ACAMS, Largest International Financial Crime Prevention Community Worldwide, has said: “Organized retail crime (ORC) is a low-risk, high-reward business line for transnational criminal organizations’ portfolios, that presents a significant financial and public safety risk".[20]. They indicate that one type of operation is for criminal operatives to smuggle destitute people into a country and have them pay for their transport by conducting directed retail shop lifting, often moving from city to city.

References

  1. ↑ Johnston, D (2023), 2023 Retail Security Survey, The state of national (USA) retail security and organized retail crime (PDF), National Retail Federation, USA, retrieved 11 October 2023
  2. ↑ Crime Survey, 2023 Report (PDF), British Retail Consortium, 2023, retrieved 10 November 2023
  3. 1 2 "FBI — Fighting Organized Retail Theft". Fbi.gov. 2010-04-13. Retrieved 2013-03-16.
  4. ↑ "Retail crime in UK at 10-year high, industry report says". BBC News. 2015-01-20. Retrieved 2015-11-22.
  5. ↑ Fanfare, R (2023), Organized Retail Theft $5 Billion Problem, Toronto Police Service
  6. ↑ "Organised Crime & Gangs". National Retail Association. Australia. Retrieved 9 November 2023.
  7. ↑ "Nordstrom in Los Angeles ransacked by mob of nearly 50 people". TODAY.com. 14 August 2023. Retrieved 8 November 2023.
  8. ↑ Dobrosielski, Chelsea (22 June 2023). "Thieves Steal Macy's, Old Navy Clothing as Analysts See 'Turning Point' for Retail Shrink". Sourcing Journal. Retrieved 8 November 2023.
  9. ↑ Kavilanz, Parija (27 September 2023). "This isn't theft of need. A more insidious type of crime is pushing some stores to close | CNN Business". CNN. Retrieved 8 November 2023.
  10. ↑ Cavale, Siddharth (29 June 2023). "Explainer: 'Organized' retail crime: a 'multi-billion dollar problem'". Reuters. Retrieved 8 November 2023.
  11. ↑ Danziger, Pamela N. "Danger In The Store: Retail Crime Makes Everyone A Potential Victim". Forbes. Retrieved 8 November 2023.
  12. ↑ Reagan, Courtney (26 September 2023). "Retail theft isn't actually increasing much, major industry study finds". CNBC. Retrieved 8 November 2023.
  13. ↑ Fonrouge, Gabrielle (11 August 2023). "Retailers are shaping a wave of laws to crack down on organized theft — here's how they do it". CNBC. Retrieved 8 November 2023.
  14. ↑ Walter, Shoshana (2008-01-25). "Multimillion-dollar Theft Ring is Broken | theledger.com | The Ledger | Lakeland, FL". The Ledger. Retrieved 2012-01-29.
  15. ↑ Siljander, Raymond P. "Retailers Organize Against Crime". Security Management. Retrieved 2012-01-29.
  16. ↑ "FDsys - Browse Congressional Bills" (PDF). Frwebgate.access.gpo.gov. Retrieved 2013-03-16.
  17. ↑ The Online Office of Congressman Brad Ellsworth - July 15, 2008: Ellsworth, Jordan Introduce Bill to Fight Organized Retail Crime, Protect Online Consumers
  18. ↑ https://nrf.com/blog/rising-toll-organized-retail-crime
  19. ↑ Major Middle Eastern Crime Ring Dismantled, FBI, 2013, retrieved 11 November 2023
  20. ↑ Organized Theft Groups and Organized Retail Crime, ACAMS, 2023, retrieved 14 October 2023
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