See Increase in Organized Retail Crime
first time, 100% of retailers say they were victims of ORC, according to NRF's
2016 ORC Study
WASHINGTON, October 18, 2016 - Organized retail crime is continuing to grow,
with 83 percent of merchants surveyed reporting an increase in the past year,
according to the
12th annual ORC study released today by the National Retail Federation.
"Retailers continue to deal with the challenges that come with fighting
organized retail crime," NRF Vice President of Loss Prevention Bob Moraca said.
"Every day, criminals are getting more creative in the ways they manipulate the
retail supply chain. Combating ORC is a full-time job, and it is a constant
battle industry-wide for retailers large and small to stay one step ahead of
these savvy criminals."
The survey of 59 senior retail loss prevention executives found that 100
percent said their companies had experienced ORC in the past year, up from
97 percent in 2015 and marking the first time in the survey's history that all
responding companies reported being a victim. In addition, 83 percent said ORC
had grown: The average loss was $700,259 per $1 billion in sales, a
significant increase from $453,940 last year.
With the problem growing, 71 percent of loss prevention executives said they now
believe their top management understands the severity and complexity of the
crimes, up from 63 percent last year.
ORC gangs often use storefronts, pawn shops, flea markets and kiosks to fence
stolen goods, and 63 percent of those surveyed said they had recovered
merchandise from a physical location. But many criminals turn to the Internet
for the anonymity it offers -- 58 percent of retailers said they had identified
stolen merchandise from an e-fencing operation.
Criminals are also finding ways to manipulate store return policies. According
to the survey, 68 percent of respondents said they had experienced thieves
returning stolen merchandise for store credit, which is often resold to
Four new states -- New Mexico, Oregon, New York and Vermont -- have enacted
ORC laws in the past year, bringing the total nationwide to 34. But the
survey found that 56 percent of retailers in states with ORC laws said they had
seen no increase in support from law enforcement, the highest in the survey's
history. Retailers continue to support creation of a federal ORC law, which is
backed by 79.7 percent of those surveyed.
"Organized retail crime continues to impact retailers at a larger scale now more
than ever before," said NRF Vice President for Supply Chain and Custom Policy
Jonathan Gold, who heads NRF's lobbying efforts on ORC. "ORC also poses a threat
to unwitting consumers who may purchase stolen merchandise that is not stored
properly or may have expired. It is critical for our industry to continue
pushing for strong federal legislation that would properly define ORC and make
it a federal crime. Until there is a federal ORC law to counter this increasing
criminal activity and the ability to transport stolen products across state
lines, it will be nearly impossible to put a dent in this $30 billion-a-year
problem that threatens retailers, the economy and consumers across the country."
Cargo theft continued to impact retailers, cited by 44 percent of those
surveyed, up from 38 percent last year. The most common place for cargo
theft to occur is when merchandise is en route from the manufacturer to a
retailer's warehouse or from the warehouse to a store, followed by on-site at
Los Angeles continued to be the hardest hit area for ORC in the nation, a
position it has held since 2012. Following in order were New York City,
Chicago, Miami, Houston, San Francisco/Oakland, Arlington/Dallas/Fort Worth in
Texas, Atlanta, Philadelphia and Orange County, Calif.
The survey of 59 executives representing department, big-box, discount, drug,
grocery and specialty retailers was conducted July 20th to August 19th, 2016.
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
retail plays in driving innovation.
Click here to download the full 2016 NRF ORC Survey.
Below are some key findings from this year's study:
Cost of ORC Climbs
The cost of organized retail crime has increased for retailers. In all,
retailers see an average impact of $700,259 per $1 billion in retail sales. That
is up significantly from 2015's $453,940. Because respondents change from year
to year, the median might be more significant. While it also shows an increase,
it is not as dramatic. The median increased to $200,000 from $194,340.
Cargo Theft on the Rise
Cargo theft is up again this year, with 44% reporting they've been a victim in
the past 12 months, but still not near the 2012 high of 52%. The most common
place for cargo theft to occur is still en route from the distribution center or
manufacturer, followed by onsite at the distribution center.
New Trends in ORC
Shoplifters are becoming more aggressive. Only 3.4% saw a decrease in aggressive
tactics while 96.5% reported an increase or the same levels of aggression. About
one in six retailers -- 17.2% -- felt that the level of aggression was much
higher than the previous year.
Retail Strategies to Combat ORC
Though eight in 10 retailers have seen ORC increase, half have not devoted
additional resources to address it. There are increases in staff and technology
resources compared with the previous two years. However, policies related to
returns, point-of-sale and trespass continue to remain largely untouched as a
response to ORC.
In states with ORC laws, more than half of surveyed retailers -- 55.9% --
haven't seen any additional support from law enforcement, the highest in the
Most Popular ORC Items
Organized retail criminals have a decided preference for the products they
steal, with a mix of
high-end luxuries and everyday commodities.
Click here to download the full 2016 NRF ORC Survey.