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Can retailers take a bite out of organized retail crime?

November 26, 2019Written by RetailWire Staff

Shoplifting is a perennial problem for retailers, but some sectors of retail have observed an uptick in an even more costly — and sometimes more dangerous — form of theft. Home Depot and Lowe’s have both experienced a recent increase in organized retail crime, according to CNBC. In such instances, rather than the casual lone actor, its a multi-state crime ring that targets the retailer. Members of the crime rings steal merchandise and flip it quickly to pawn shops, other underground resellers associated with the ring or sell it online. Retailers have noted that people committing this kind of crime are more frequently armed and/or willing to attack store staff in the course of a theft. The noted increase of organized retail crime is happening in the DIY/home improvement space, but the costly problem is recognized broadly in the retail industry. In 2005, the National Retail Federation (NRF) began conducting its yearly Organized Retail Crime survey to gauge the impact on retailers. In 2007, 79 percent of retailers reported having been victims of organized retail crime within the past year. By 2018, that number has risen to an alarming 91.6 percent. Retailers also reported an all-time high in terms of financial losses due to such crime in 2018, with $778,000 per $1 billion in sales lost. Disconcertingly for retail employees who may come face-to-face with criminals, nearly half of retailers reported that organized retail crime gangs have been getting more aggressive. Earlier this year, the then chief financial officer of Home Depot, Carol Tome, attributed the uptick in organized retail crime the chain was experiencing to the opioid epidemic, according to CNBC. Local and state law enforcement have been attempting to clamp down on the problem. Last month in Elizabethtown, Kentucky, for instance, 22 people were arrested in association with a retail crime ring. The bust was orchestrated by law enforcement in conjunction with the state’s Organized Retail Crime Association. Seven out of 10 in the industry argue that the problem has grown large enough to demand a federal law addressing it, according to the 2018 NRF survey.

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