|September 15, 2015|
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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%
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;
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.
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.
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):
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