Retailers under attack by organized crime gangs

Discussion
Sep 16, 2015

They may win some battles, but it’s hard to say merchants are winning the war against organized crime gangs when you look at the $30 billion the retail industry is losing on annual basis.

According to National Retail Federation’s "Organized Retail Crime Survey," 97 percent of retail loss prevention executives said organized criminal groups victimized their businesses over the past year. That’s up from 88.2 percent in 2014.

"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 Bob Moraca, NRF’s vice president of loss prevention, in a statement. "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."

Retailers, on average over the past year, lost $453,940 for every $1 billion in annual sales to organized retail crime. They also spent $434,032 for every billion in annual sales on personnel to try and thwart the criminal activity.

NRF organized crime law enforcement chart

Source: 2015 NRF Organized Retail Crime Study. July 13 to August 6, 2015. (n=67)

NRF’s members are turning to state and federal legislators and law enforcement agencies to address a problem that hasn’t received the attention it deserves considering its impact on businesses and, ultimately, on the price of goods paid by consumers.

So far this year, five states have passed organized retail crime legislation, bringing the total to 30 that have laws on the books for individuals associated with criminal gangs who target retail businesses.

NRF and its members have argued that the federal government needs to be more actively involved in responding to the problem as much of the merchandise stolen from retailers winds up being transported across state lines. Roughly 79 percent of those surveyed by NRF believe a federal law is needed to more effectively address the issue.

According to the NRF, 37.9 percent of respondents have experience cargo theft over the past year, up from 35.4 percent the year before.

On the upside, retailers report progress in finding stolen merchandise online and in physical locations such as storefronts, pawnshops, flea markets and kiosks. Fifty-nine percent report having recovered stolen merchandise over the past year.

Where do you think the greatest opportunities exist for disrupting organized retail crime activity? Is federal legislation key to taking the fight to organized criminal groups targeting retail?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"My husband managed loss prevention for a regional grocery chain, and found that state and local governments didn’t much care about retail theft."
"You can’t protect the merchandise if you allow one- or two-person coverage. Responsibility must be shared by the bean counters who’ve cut scheduling, which has reduced associate levels across the board."
"In the ’80s, when I managed a supermarket, and we still kept cigarettes on the sales floor, I had a massive, professional theft situation. The only way we stopped it was full-time surveillance. That was a real challenge."

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7 Comments on "Retailers under attack by organized crime gangs"


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Cathy Hotka
Guest
6 years 8 months ago

My husband managed loss prevention for a regional grocery chain, and found that state and local governments didn’t much care about retail theft. If he physically caught someone and transported the suspect to a police station, they’d arrest him, but that was the only way he could get their attention. Getting the federal government involved might send a message.

Bob Phibbs
Guest
6 years 8 months ago

You can’t protect the merchandise if you allow one- or two-person coverage. Responsibility must be shared by the bean counters who’ve cut scheduling, which has reduced associate levels across the board. The last thing an employee is looking for are people who might steal when they’re trying to do the work of two or three people.

Frank Riso
Guest
6 years 8 months ago

Cooperation among the loss prevention departments for all retailers is key. They must communicate all their reports and intrusions to each other. This would work more as a notice of what is going on in an area so that all retailers can be aware of the possibility of organized crime activity. While all retailers compete in some way or another, when it comes to crime they should band together as a group with their state retail associations as well as with the NRF.

Roger Saunders
Guest
6 years 8 months ago

Obtain, maintain and retain quality associates. That means don’t overlook the interview, continuous communication, and praise about the very human characteristic of honesty and integrity.

Shrink can come from multiple sources. However, even organized crime finds ways to worm their way into associates within retailers’ firms. Each of our associates is the front line in guarding against shrink.

Honesty and integrity are characteristics that carry over to other employees. The traits inspire all within the organization. Make certain that leadership performs by example in this area. It will pay off for customers, shareholders, associates, cash flow, and time and energy savings.

Mark Burr
Guest
6 years 8 months ago

Automatic locking doors. Yep, that would do it. Well, some of it maybe. If they got in and couldn’t get out until police arrive, that would help. It would also help in stopping the entire mobs getting in after it begins.

The risk is, associates being harmed or killed. It’s not worth that.

Let’s face it. We need no more laws. There are enough laws. There isn’t enforcement, but there are laws.

What we need is a different set of morals, character, and respect. That won’t happen overnight. But if it doesn’t happen, we’re headed for more chaos than we can imagine.

As a strong supporter of law enforcement, it does bother me to say in my experiences across many areas, regions, and states, that they couldn’t care less about retail fraud. It’s always been the case and unless something dramatically changes it will remain that way.

The broad view of the public and law enforcement is that they see it as little more than a victimless crime.

Ralph Jacobson
Guest
6 years 8 months ago

There are so many factors that enter into this issue. Internal shrink, external parties, the economic factors, etc. Fed intervention won’t hurt, however, it may not be the stopgap that retailers are hoping for. In the ’80s, when I managed a supermarket, and we still kept cigarettes on the sales floor, I had a massive, professional theft situation. The only way we stopped it was full-time surveillance. That was a real challenge. Today there are tools available beyond traditional security measures to attack the problem much more effectively.

Craig Sundstrom
Guest
6 years 8 months ago

Is this NRF that argues “(the) federal government needs to be more actively involved” the same one that regularly assails involvement of said government in “their” business(es) when they don’t like the outcome (i.e. labor and safety issues)? Not to be an apologist for crime, but the losses they claim—less than 1/20th of 1 percent of sales—don’t strike me as a justification for (even) more Federal laws…particularly as those laws—whether deliberately or not—would likely stifle small and second-hand merchants.

wpDiscuz
Braintrust
"My husband managed loss prevention for a regional grocery chain, and found that state and local governments didn’t much care about retail theft."
"You can’t protect the merchandise if you allow one- or two-person coverage. Responsibility must be shared by the bean counters who’ve cut scheduling, which has reduced associate levels across the board."
"In the ’80s, when I managed a supermarket, and we still kept cigarettes on the sales floor, I had a massive, professional theft situation. The only way we stopped it was full-time surveillance. That was a real challenge."

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