According to the recently released results of the National Retail Federation’s ninth annual Organized Retail Crime (ORC) Survey, 93.5 percent of retailers say they have been a victim of ORC in the past year. Although that is down slightly from 96 percent in 2012, eight in 10 (81.3 percent) believe that ORC activity has actually increased over the last three years.
One of the common complaints over the years by those who work in the loss prevention industry is that there has been a lack of awareness by law enforcement, as well as state and federal lawmakers about the severity of the problem. However, according to the survey, awareness levels by law enforcement are on the rise as nearly half of this year’s survey respondents said they believed law enforcement understands the problems associated with ORC.
While federal ORC legislation has yet to be passed, many states have taken it upon themselves to make the penalties for those involved in organized retail theft gangs more severe. Last month, Florida Gov. Rick Scott signed a bill into law that increases the sentencing scoring guidelines for an organized retail theft offense. Those persons found guilty of retail theft crimes at $50,000 or more would face a minimum sentence of 21 months in prison.
And, just two weeks ago, federal, state and local authorities announced the formation of a new task force in South Florida designed to reign in organized retail theft and help coordinate prosecutions of ORC-related cases. In this “At the Frontline” interview, NRF Vice President of Loss Prevention Richard Mellor discusses what he believes the ramifications from the creation of this new task force will be, as well as other trends in ORC.
SIW: What kind of impact do you believe this task force will have on ORC in South Florida?
Mellor: This is an extraordinary opportunity for, specifically, Florida. Miami happens to be the fourth ranked city or metropolitan area for ORC activity, according to the NRF’s Organized Retail Crime Survey. It has been in the top 10 year after year… so it has gotten a lot of focus from the law enforcement community. Retailers have been very proactive reaching out to law enforcement for help and assistance in trying to curtail the crime. With that in mind, although it has been earmarked as a federal task force, it is a combination of local police departments, state police and organizations, as well as federal (authorities) coming together to talk about the gravity of the problem in southern Florida. But, moreover, and here is the defining thing that I feel is going to be instrumental in helping the overall problem on ORC: There are many organized retail crime associations around the United States, there’s upwards of 30 of them that are information sharing in nature – retailers and law enforcement getting together and talking about incidents that have occurred, what they may be able to do about them and sharing that information from one retailer to another. As far as the task force is concerned, it is not only bringing together those retailers and law enforcement, but prosecutors as well. And the prosecutors are local, state and federal.
The difference is that it’s a proactive organization that is investigating and making arrests. The introduction of the (Department of Homeland Security) investigating, as well as the U.S. attorney there makes it more practical and able to prosecute these individuals committing these crimes that jump from one state to another and from other city jurisdictions. Now there is a collaborative task force that is not only investigating and making the arrests, but also prosecuting at the same time. The prosecutors are now in the loop, sharing the information and utilizing the information to make effective prosecutions and go after not just the people that are perpetrating the thefts, but also the enterprises that are engaging in a business of making lots of money off of these thefts. This is really a huge step forward as far as collaboration is concerned and it’s a huge step forward in a strategic approach arresting these people and prosecuting them versus just sharing information and hoping to arrest and prosecute.
SIW: How have you seen ORC evolve and what does the formation of this task force say about how seriously law enforcement is taking the problem?
Mellor: Obviously, this is a bit of a success story. There are lots of news articles and press (coverage) as far as statistics (related to ORC) and when arrests take place, getting those in front of the public and legislators to help put in place laws that are adequate to deal with the gravity of this crime and make the penalties severe enough that we can take these individuals off the street and hopefully dismantle the enterprises in which they operate. The first success story, and part of this evolution, is the awareness level now on the legislative side, the law enforcement side and even the chief executive officers of retail companies are all very much aware of how severe the problem is, what the implications to the economy and the business are if, in fact, we don’t put a dent and a stop to the criminal enterprises that engage in this.
This also has all sorts of ramifications for consumers in the way of prices they pay for products. The availability of products is not spoken about very often, but it’s a pretty significant thing for consumers who want to buy particular products. When these bad guys steal large quantities of products from the store, it depletes the inventory levels and it’s difficult for the retailers to keep up with that and, in some cases, smaller companies, smaller stores can’t survive if they have to continue to bring a product in and it’s stolen from them. It’s difficult for those smaller stores to survive this type of theft. Sometime they have to make a decision not to sell that product anymore because if they continue their profitability will be completely evaporated and they won’t be able to continue to stay in business.
As (ORC) has evolved, this awareness level… has continued to elevate on the part of law enforcement. As time has gone on, the law enforcement community has not only become more aware, but there have been investments made on the side of retailers to put appropriate surveillance equipment within their own companies and they have also put in place their own organized retail crime task forces. Now when you alert the police, they are aware of the problem, they know what the nuances of organized retail crime are and they’re a bit more able and knowledgeable to be in place and ready to react. All of the efforts on the law enforcement side are starting to have an impact. The next step for us is seeing if we can get a federal law on the books that help retailers, as well as law enforcement crossover state lines in tracking these individuals, making the arrests, taking the proceeds that they recover, and making that into one charge.
SIW: Although this task force is focused on South Florida, do you believe this potentially opens the door to create other task forces in cities where there has also been a high rate of ORC?
Mellor: I think this is a notable step forward on the part of South Florida. The law enforcement community and retailers in other cities are working hard on this too. The organized retail crime associations were put together just to start the conversation going and some of them have huge memberships. I foresee things taking the next step. I think this is great that South Florida stepped up to the plate and they’re doing something a bit more dramatic and I think this is a trend that will begin to happen and these ORC associations will no doubt take their lead from this. The first one is always the most difficult, as you know, no matter what you do. It comes a little bit easier when other cities can make reference to Miami and South Florida and say: “Here’s what they’re doing, why can’t we do the same thing?” They broke ground on this and the fact that they have a federal agency involved in this… it’s a nice linkage for that to happen in other cities with federal involvement.
SIW: How has legislation passed by other states aided the prosecution of ORC?
Mellor: Over the last five years, it’s been a continuing process with one state after another. On the heels of the governor signing a new ORC bill in Florida the week before they make the announcement of the task force formulation, there’s no coincidence in that for sure. But many, many states now have organized retail crime laws on the books. They differ a little bit from one state to another and, in some states, it’s just about the actual theft while other states have different layers or different portions of the law that have to do with trafficking in the stolen products, selling the products, manipulating devices in order to steal products, and changing expiration dates on packaging. All of these different pieces of what these criminals are doing, some states have all of these included in there. So, some of these laws are very comprehensive, others are just kind of straightforward. There are probably about 30 states now that have state laws on ORC.
SIW: How far does the retail industry and law enforcement community still have to go to really put a further dent in this problem?
Mellor: I think the next step for us, as a group, if in fact we could achieve this in short order, it would be a huge step forward if we get federal legislation in place. It’s not that we haven’t been working on that. Retailers, as well as our legislative connections, have met and discussed this at some length. There is willingness and a desire to help the retailers on this on Capitol Hill. It’s all about priorities right now. The federal law enforcement agencies now, such as with the task force, being able to collect and validate information on incidents, arrests and prosecutions will elevate this another step. And that collaboration that we would have with the federal law enforcement agencies, being able to speak to this topic and discuss it with us in group meetings with the legislative folks, I think that’s going to be the next step for us. That’s what we’re impatiently waiting for and that will make an impact on this crime.
