According the results of a new report from the National Retail Federation (NRF), more than two-thirds of retailers surveyed as part of the organization’s 15th annual organized retail crime (ORC) study have seen an increased in ORC over the past year. In fact, the report, which polled over 60 retailers, found that 97% had been victimized by ORC in the past year and that 68% experienced an increase in ORC activity.
Losses from ORC averaged $703,320 per $1 billion in sales, which marks the fourth year in a row that the figure has topped $700,000. Additionally, 65% or retailers surveyed reported that ORC is a higher priority for their companies now than it was five years ago, while 56% said they were allocating additional technology to the issue and 44% were increasing loss prevention budgets.
“Organized retail crime continues to present a serious challenge to the retail industry,” NRF Vice President of Loss Prevention Bob Moraca said in a statement. “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.”
Among steps taken to fight ORC, 38% of retailers said they had changed or were planning to change return policies while 37% were doing the same with point-of-sale policies, 27% with employee screening and 24% with the way they handle trespassing.
While ORC typically involves thefts from stores, 73% of those surveyed had been victims of cargo theft. Theft of cargo occurred most often en route from distribution centers to stores (59%), at distribution centers (33%) and en route between stores (30%).
Stolen merchandise is sometimes returned for store credit, usually in the form of gift cards. Those cards can then be sold for cash, and 51% of retailers had found them for sale on websites while 17% found them in pawnshops.
ORC gangs typically steal a mix of high-end designer products and easy-to-fence everyday necessities. Top items stolen, according to the study, included designer clothing, infant formula, razors, designer handbags, laundry detergent, denim pants, energy drinks, allergy medicine and high-end liquor among others.
Retailers in areas with state-level ORC laws said they were happy with help received from local law enforcement (84%) and state law enforcement (75%) but somewhat less so with federal law enforcement (64%). ORC often crosses state lines, and 71% of retailers polled said a federal ORC law is needed.
A number of states have also increased the threshold of what constitutes a felony in recent years, allowing criminals to steal more before being subject to the stronger penalties that come with a felony. Among retailers surveyed, 51% had seen an increase in average ORC case values in states where that has happened.
Retailers’ efforts to fight ORC focus on more than just preventing the theft of merchandise. The survey found that 68% of retailers said ORC gangs had shown more aggression or violence in the past year, and many anti-ORC resources are directed toward protecting the safety of customers and employees.
The top five cities for ORC in the past year in order were Los Angeles, New York, Houston, Chicago and Miami, with a number of ties rounding out the top 10. For more information or to download a full copy of the report, click here.
