Dealing with organized retail crime (ORC) is one of the major challenges for loss prevention programs across the country. Now that holiday and Black Friday shopping are fast approaching, ORC is likely a primary concern for your retail business.
Why are most retail businesses concerned? ORC costs the retail industry about $30 billion each year, according to the 2016 Organized Retail Crime Survey, an annual survey conducted by the National Retail Federation (NRF).
Moreover, the problem is growing. For the first time, 100 percent of the retailers surveyed by the NRF said they have been victims of organized retail crime, up from 97 percent in 2015. In addition, 83 percent of the retailers surveyed reported an increase in ORC year-over-year.
There are a number of reasons for these staggering statistics, including that professional retail criminals are much more sophisticated than in the past and they work in larger groups where each member has a clearly defined role.
These professional thieves travel throughout the country, stealing large volumes of merchandise from retailers. Then they sell their products to an organized network of criminal fences, typically receiving 25 percent of the ticketed value. The fences then either sell the merchandise to their customers or, in some cases, to legitimate retailers.
Additionally, theft of cargo, as well as issues with merchandise credits and gift cards, add to the problems that retailers are facing when it comes to organized retail crime.
To combat these professionals thieves, you need an organized retail crime strategy that’s focused on the right issues. The first step is to build an ORC team that can establish a process to collect data to identify patterns of crimes, look into the right technology and interact with law enforcement.
Here are some areas your organized retail crime strategy should address:
- Store operations – Members of your team should conduct surveillance that’s based on intelligence and data analysis to identify professional shoplifters who may be targeting your stores. Once they identify the thieves your team contacts local law enforcement. Then they should watch the criminals as they steal your merchandise, take it out of the store and bring it their vehicle. Once the goods are in their vehicle, the police can arrest them.
- Fence operations – Putting fences out of business goes a long way toward putting the professional thieves out of business because they won’t have their biggest customers to sell to. You can locate fences in a number of ways, including tips from informants and information from law enforcement.
- Cybercrimes – In addition to fencing goods in the physical world, fences also move stolen goods online. Your ORC investigators should scour online auction sales to look for leads on your stolen merchandise.
- Supply chain – Your ORC team should work closely with your supply chain loss prevention team because professional thieves also sell stolen store merchandise to the same fences to whom they sell stolen cargo.
- Same-store-only return policy – Members of organized retail crime teams will often steal merchandise from one store and return it to another store in a different city, often for gift cards that they sell to fences. If you have multiple stores, you should implement a policy – and post it for all customers to see – stating that each location will only accept returns that were purchased at that location.
- Implement a dual legal strategy – When it comes to the criminals, you want to catch the professional thieves and put the fences out of business. You also want to be sure that they get the maximum penalties and pay restitution as well. On the civil side, you want to be able to sue for damages to make your company whole.
- Partner with law enforcement – Your ORC team should cultivate great relationships with law enforcement because on their own your team can’t stop vehicles, conduct raids on the fences’ operations or obtain subpoenas to access Internet records.