National Retail Federation Survey Finds Organized Retail
Crime Still Prevalent Across the Industry
Retailers allocating more resources to combat issue,
while federal law still on
retailers wish list
WASHINGTON, September 15, 2015 - Retail loss prevention executives have
their hands full, and when it comes to the organized crime gangs that wreak
havoc on their stores, their inventory and their bottom line, retailers are
getting more aggressive in their efforts to fight the $30 billion problem.
According to the
National Retail Federation's 11th annual Organized Retail Crime
Survey, which polled 67 senior retail loss prevention executives, nearly all
(97%) retailers surveyed report that they have been a victim of ORC in the past
year, up from 88.2 percent who said so last year. And, of those who have been
victimized over the past year, the survey also found more retailers this year
have seen an increase in ORC activity at their own company (84.9% versus 60.3%
As such, more companies are investing in tools and resources to combat the
growing problem. Overall, 47 percent of those surveyed say they are allocating
additional resources of some kind. Specifically, the survey found 31.8 percent
of retailers are allocating additional resources to staffing, up from 22.7 last
year, and nearly one-quarter (24.2%) are adding additional budget resources.
"Even with state-of-the-art technology available, trained employees on the
ready, extensive partnerships with all levels of law enforcement and additional
resources on hand, retailers continue to grapple with the challenges that come
with fighting organized retail crime," said NRF Vice President of Loss
Prevention Bob Moraca. "Brazen and often dangerous criminals are finding new
ways every day to manipulate the retail supply chain; from the docks where
merchandise comes in to criminal flash mobs that involve several individuals
running into a store at once, the methods used by crime gangs today run the
gamut. These new criminal methods are making it even more crucial for retailers
and law enforcement to work together to combat this crime."
Top management aware of severity of ORC
Given the severity and growth of the issue, retail loss prevention executives
were asked about the level of understanding they feel top management has of ORC.
The survey found 62.7 percent believe senior leaders understand the severity and
complexity of the issue, up from 60.5 percent last year.
30 States now have ORC laws;
Federal legislation still on wish list
Five states enacted their own state legislation around ORC in 2015, bringing the
total to 30 states that now have laws against criminals who are found to be
associated with an organized retail crime gang.
NRF asked retailers about the support they get from law enforcement in the
states where they have a presence and that have ORC laws, and the survey found
15.4 percent of those surveyed say they have noticed an increase in support from
federal law enforcement, up from 9.6 percent who said so last year; 43.1 percent
say they've noticed an increase in support from local/county law enforcement and
24.6 percent from state law enforcement.
Because organized retail crime gangs have the means to transport stolen products
through multiple states and even overseas, the need for federal legislation is
greater than ever. NRF for the first time asked if they believe a federal ORC
law is needed to effectively combat the issue, and 78.8 percent said yes.
"Organized retail crime continues to be an issue plaguing retailers, and there
continues to be a need to pass strong ORC legislation, which defines the issues
and provides law enforcement with the necessary tools to help retailers combat
the issue," said NRF Vice President of Supply Chain Jon Gold. "This vast of a
crime is not limited to any state or jurisdiction and is why we continue to push
for federal legislation."
Financial impact of ORC heavy
Retailers on average report they have lost $453,940 per $1 billion in annual
sales over the past year. Additionally, the survey found on average retailers
allocate approximately $434,032 to specific organized retail crime personnel in
Retailers making a dent in locating fencing, e-fencing operations
Organized retail crime gangs often use fake locations for their extensive
operations, including store fronts, pawn shops, flea markets and kiosks.
According to the survey, nearly six in 10 (59.1%) say they have recovered stolen
merchandise from a physical fence location in the past 12 months. When criminals
aren't using actual locations to house their stolen goods and run their crime
operation, many turn to the internet for the anonymity it offers. Over the past
year, 59.7 percent of retailers surveyed say they have identified or recovered
stolen merchandise from an e-fencing operation.
Gift card, store credit schemes affected two-thirds
of those polled
Savvy criminals are also finding ways to manipulate well-intentioned store
return policies. According to the survey, two-thirds (66.7%) of respondents say
they have experienced thieves returning stolen merchandise for store credit, to
then sell that merchandise credit to secondary market buyers or sellers.
For the first time NRF asked where retailers have recovered the stolen
merchandise credit cards, and most say they have found them on websites (54.5%),
at pawn shops (24.2%) and at check cashing stores (13.6%).
Four in 10 retailers victims of cargo theft
Organized retail crime affects retailers in several ways, and one of the biggest
problems happens before the product even reaches the store. The survey found
37.9 percent of those polled have experienced cargo theft in the past year, up
from 35.4 percent last year.
Top Cities for Organized Retail Crime Activity
Organized retail crime gangs wreak havoc throughout the country, but many cities
have remained top locations for ORC activity for the past several years,
including Los Angeles, Miami and San Francisco. The top 10 locations that
retailers say have the most criminal activity are (by rank):
||Orange County, CA.
||Northern New Jersey
About the Survey
The 11th annual 2015 NRF Organized Retail Crime survey was conducted July 13 -
August 6 by the National Retail Federation. Senior loss prevention executives at
67 retail companies completed the survey with the purpose of identifying the
depth of organized retail crime throughout the entire industry. This year's
survey features responses from executives representing department/big-box
stores, discount, drug, grocery, restaurant and specialty retailers.
NRF is the world's largest retail trade association, representing discount and
department stores, home goods and specialty stores, Main Street merchants,
grocers, wholesalers, chain restaurants and Internet retailers from the United
States and more than 45 countries. Retail is the nation's largest private sector
employer, supporting one in four U.S. jobs - 42 million working Americans.
Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the
nation's economy. NRF's
This is Retail campaign highlights the industry's
opportunities for life-long careers, how retailers strengthen communities, and
the critical role that retail plays in driving innovation.
Click here to read the full 2015 NRF ORC Survey.
Today's Special Report is sponsored by