Organized retail crime

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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]

Contents

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 Retail Council of Canada claimed in 2023 that organized retail crime "costs Canadians retailers around $5 billion per year." [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 rose by 2023, when Nordstrom, [7] Macy’s, and Old Navy [8] all publicized major organized shoplifting activity. Target claimed in September 2023 that theft and organized retail crime helped drive its $500 million decrease in annual profits. Some store branches of major chains were closed. [9]

Theft had risen to $70 billion in 2020, according to the Retail Industry Leaders Association (RILA). A pattern emerged of crime rings consisting of two parts—persons who would steal a high volume of goods from multiple stores, and others who would 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 to have been stolen, in line with a new U.S. law that went into effect in June 2023. [10]

However, the National Retail Federation (NRF) 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%). [11]

From 2022 through August 2023, 9 U.S. states passed laws to impose harsher penalties for organized retail crime offenses. [12]

California made organized retail theft a distinct crime. [13] In 2024, California lawmakers proposed expanding penalties for individuals involved in organized retail theft. [14]

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. [15]

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. [16]

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.

In December 2023, husband and wife Kenneth and Michelle Mack were arrested in the San Diego area on charges of operating a retail crime empire centered on shoplifting. The Macks resold cosmetics worth $8 million, stolen by a dozen women from Ulta, Sephora and other stores, on Amazon. [17] In July 2024, the Macks pleaded guilty to organized retail theft and conspiring to commit organized retail theft. [18] They were each sentenced to five years and four months in prison and required to pay $3 million in restitution. [19]

Current US legislation

Civil demand letter, which third party collection companies/ lawyers mail to people who are caught shoplifting from retailers Civil demand letter.jpg
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 [20] 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. [21]

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 NRF and other retail industry groups. [22]

In December 2023, NRF retracted a claim it had made in April that "nearly half" of retail inventory shrinkage in 2021 was attributable to ORC. Data actually showed that 37% of shrinkage was attributable to all external theft, not limited to ORC. [23]

Multi-national crime

Some criminal organizations are multi-national (or trans-national) with operations in and between several different countries. [24] 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". [25] 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.

Related Research Articles

<span class="mw-page-title-main">Theft</span> Act of taking anothers property without consent

Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word theft is also used as a synonym or informal shorthand term for some crimes against property, such as larceny, robbery, embezzlement, extortion, blackmail, or receiving stolen property. In some jurisdictions, theft is considered to be synonymous with larceny, while in others, theft is defined more narrowly. A person who engages in theft is known as a thief.

<span class="mw-page-title-main">Shoplifting</span> Theft of goods from a retail establishment

Shoplifting, shop theft, retail theft, or retail fraud is the theft of goods from a retail establishment during business hours, typically by concealing a store item on one's person, in pockets, under clothes or in a bag, and leaving the store without paying. With clothing, shoplifters may put on items from the store and leave the store wearing the clothes. The terms shoplifting and shoplifter are not usually defined in law. The crime of shoplifting generally falls under the legal classification of larceny. Shoplifting is distinct from burglary, robbery, or armed robbery. In the retail industry, the word shrinkage can be used to refer to merchandise lost by shoplifting, but the word also includes loss by other means, such as waste, uninsured damage to products and theft by store employees.

<span class="mw-page-title-main">White-collar crime</span> Financially motivated nonviolent crime committed by business and government professionals

The term "white-collar crime" refers to financially motivated, nonviolent or non-directly violent crime committed by individuals, businesses and government professionals. The crimes are believed to be committed by middle- or upper-class individuals for financial gains. It was first defined by the sociologist Edwin Sutherland in 1939 as "a crime committed by a person of respectability and high social status in the course of their occupation". Typical white-collar crimes could include wage theft, fraud, bribery, Ponzi schemes, insider trading, labor racketeering, embezzlement, cybercrime, copyright infringement, money laundering, identity theft, and forgery. White-collar crime overlaps with corporate crime.

<span class="mw-page-title-main">Retail loss prevention</span> Practices to reduce loss of goods in retail stores

Retail loss prevention is a set of practices employed by retail companies to preserve profit. Loss prevention is mainly found within the retail sector but also can be found within other business environments.

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A fence, also known as a receiver, mover, or moving man, is an individual who knowingly buys stolen goods in order to later resell them for profit. The fence acts as a middleman between thieves and the eventual buyers of stolen goods who may not be aware that the goods are stolen.

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A store detective is a member of loss prevention whose main role is to prevent and detect theft and reduce shrink in retail outlets. They do this by patrolling the store in plain clothes looking to identify members of the public who are stealing from the store. More common terms today with major retailers are loss prevention agent, detective or investigator and asset protection officer. Special officer, once common, is now rarely used, as it is typically denotes some form of law enforcement authority, and some jurisdictions limit its use.

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Property crime is a category of crime, usually involving private property, that includes, among other crimes, burglary, larceny, theft, motor vehicle theft, arson, shoplifting, and vandalism. Property crime is a crime to obtain money, property, or some other benefit. This may involve force, or the threat of force, in cases like robbery or extortion. Since these crimes are committed in order to enrich the perpetrator they are considered property crimes. Crimes against property are divided into two groups: destroyed property and stolen property. When property is destroyed, it could be called arson or vandalism. Examples of the act of stealing property is robbery or embezzlement.

<span class="mw-page-title-main">Shrinkage (accounting)</span> When a retailer has fewer items in stock than in the inventory list

In accounting, shrinkage or shrink occurs when a retailer has fewer items in stock than were expected by the inventory list. This can be caused by clerical error, or from goods being damaged, lost, or stolen between the point of manufacture and the point of sale. High shrinkage can adversely affect a retailer's profit.

The National Retail Federation (NRF) is the world's largest retail trade association. Its members include department stores, catalog, Internet, and independent retailers, restaurants, grocery stores, multi-level marketing companies and vendors.

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A chief visibility officer (CVO) or director of visibility is an individual appointed to oversee all aspects of performance across retail stores, corporations or organizations as part of the C-Suite of executives. The role of the CVO emerged to manage the integration of ideas, disciplines, technologies and people focused on elevating retail enterprise visibility. The title is commonly associated with Retail Loss Prevention (LP) leaders and professionals who maintain the highest position in security management and maintain the security operations in the store to achieve a high level of visibility.

<span class="mw-page-title-main">2014 California Proposition 47</span> Reduction of some crimes to misdemeanours

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<span class="mw-page-title-main">Carding (fraud)</span> Crime involving the trafficking of credit card data

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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. ↑ "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. ↑ "Organized retail theft can involve violence, as Toronto police warn shoppers ahead of holiday season". Toronto Star. 2023-10-03. Retrieved 2023-12-08.
  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. ↑ Reagan, Courtney (26 September 2023). "Retail theft isn't actually increasing much, major industry study finds". CNBC. Retrieved 8 November 2023.
  12. ↑ 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.
  13. ↑ Williams, Paige (2024-03-18). "The Crime Rings Stealing Everything from Purses to Power Tools". The New Yorker. ISSN   0028-792X.
  14. ↑ "Democratic lawmakers introduce legislation to target organized retail theft, online resellers". Los Angeles Times. 2024-02-16.
  15. ↑ Walter, Shoshana (2008-01-25). "Multimillion-dollar Theft Ring is Broken | theledger.com | The Ledger | Lakeland, FL". The Ledger. Retrieved 2012-01-29.
  16. ↑ Siljander, Raymond P. "Retailers Organize Against Crime". Security Management. Retrieved 2012-01-29.
  17. ↑ Fonrouge, Gabrielle; Zamost, Scott; Reagan, Courtney (2024-03-12). "Inside the organized crime rings plaguing retailers including Ulta, T.J. Maxx and Walgreens". CNBC.
  18. ↑ Vargas, Ramon Antonio (2024-07-17). "California woman pleads guilty to running $8m cosmetics retail theft ring". the Guardian. Retrieved 2024-07-19.
  19. ↑ Zamost, Scott (2024-07-19). "Retail crime 'queenpin' faces five years in prison, millions in restitution". NBC New York. Retrieved 2024-07-19.
  20. ↑ "FDsys - Browse Congressional Bills" (PDF). Frwebgate.access.gpo.gov. Retrieved 2013-03-16.
  21. ↑ The Online Office of Congressman Brad Ellsworth - July 15, 2008: Ellsworth, Jordan Introduce Bill to Fight Organized Retail Crime, Protect Online Consumers
  22. ↑ "The rising toll of organized retail crime". 28 August 2023.
  23. ↑ Fonrouge, Gabrielle (December 7, 2023). "Retail lobby group's retraction of key crime claim shows how hard it is to track theft". CNBC.
  24. ↑ Major Middle Eastern Crime Ring Dismantled, FBI, 2013, retrieved 11 November 2023
  25. ↑ Organized Theft Groups and Organized Retail Crime, ACAMS, 2023, retrieved 14 October 2023
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