Organized Retail Crime

Who would have thought a product as innocuous as Tide laundry detergent would be so popular among the criminal element? But when police in suburban Washington raided the home of a suspected drug dealer last fall, they found nearly 20 large bottles of the liquid laundry detergent right next to all the cocaine. And it turns out that people were actually using the $20-plus bottles to pay for the illegal drugs…and the dealer was glad to take them as payment.

Enter the world of Organized Retail Crime (ORC), where one day the target is laundry detergent and the next day the target might be infant formula, and the next potentially razorblades. It’s enough to give today’s retail security and loss prevention professionals a migraine.

The media firestorm surrounding the “grime wave” of ORC and widespread Tide laundry detergent theft has all but run its course; however, retailers and loss prevention (LP) managers are far from washing their hands clean of the multi-billion dollar ORC problem. In its wake, the LP industry has been left to focus on what might be next in the way of targeted goods and ORC plots. Staying on top of these trends poses a great challenge to LP professionals.

What can be learned in the wake of the grime wave? What steps can retailers and LP managers take to respond to emerging threats, while at the same time putting preventive measures in place to deter thieves? Here are some suggestions that can help us learn from these experiences and respond more effectively.

 

Monitor Inventory Closely, and Share Trends

ORC is unpredictable by its very nature. While it is not necessarily possible to predict the next big target, retailers can observe high-level trends and monitor products that might be attractive to criminals. This may mean conducting spot checks of these items in the store to note if a particularly high volume seems to be moving from the shelves. It may mean running an extra weekly report on inventory and comparing it with sales to ensure targeted items are in fact being sold. A quick check can ensure that any major discrepancies are noticed and promptly investigated.

In some cases, retailers need to limit quantities of goods put on display, or move merchandise within the store to make it more risky for thieves to steal from a particularly high-traffic area.

General categories of items that are popular among ORC rings include high-priced brand-name items with strong demand that can be sold online, in pawn shops, in black market storefronts and in flea markets. These include over-the-counter (OTC) drug products, such as analgesics and cough and cold medications, razorblades, camera film, batteries, videos, DVDs, CDs, smoking cessation products and infant formula. High-end items including designer clothes, purses, furs and consumer electronics are also popular. Finally, products that are small even when packaged are especially susceptible, as thieves can fill a bag or cart with a single sweeping motion off the shelf.

Sharing trends and anomalies in inventory with law enforcement and other retailers can also help identify patterns in geographic regions, types of goods stolen, and even criminals’ preferred time of day to strike. The Law Enforcement Retail Partnership, or LERPNet, is available to participating retailers and law enforcement through a secure Internet portal. It was developed in partnership with the Retail Industry Leaders Association (RILA) and the National Retail Federation (NRF).

 

Technology Solutions

The “grime wave” has also shed light on a few strangely rudimentary, yet effective tactics employed within the organized retail crime rings. In some noted cases, criminals were filling grocery carts full of Tide and simply pushing the carts out of fire exits and making a quick getaway via a waiting car.

Another common method used by criminals has been to purchase an expensive item and place it in a car parked outside or give it to someone who leaves the premises. With receipt from the legitimate purchase in hand, the criminal re-enters the store, grabs the same item, and walks out. If questioned, they show the receipt and claim that the item was just purchased.

Using technology, retailers can make it harder for criminals to deploy these types of tactics once inside the store. To prevent push-outs, retailers can install fire exit doors with access control mechanisms that delay the door opening after the crash bar is pressed. The deterrence value is enormous, as 10 seconds is a long wait for a criminal trying to push out a cart of merchandise unnoticed by customers, store employees or video cameras.

In areas such as cosmetics, electronics, baby formula and other high-demand merchandise aisles, public view monitors (PVMs) offer precision video capture of the faces of criminals. They also let perpetrators know they are being watched and recorded, serving as a deterrent and reminding them that they will likely be investigated. Smaller PVMs can even be placed directly at the targeted product at eye-level in high-risk aisles to serve as an extra deterrent.

Retailers can also step up use of HD video surveillance technology to capture identification shots. This information is not only valuable for prosecution at the store level, but can be helpful to the entire retail industry when sharing mug shots of individuals who may be perpetrating their crimes across an entire region.

Finally, other technologies that can help to prevent theft include the special packaging, overt or covert stamps on products that make it impossible to resell and EAS tags and labels.

 

Use Auditing Processes to Eliminate Inefficiency

The grime wave cost hundreds of thousands of dollars in losses before retailers even realized what was happening. It can be challenging to “see the forest for the trees” when trying to put together disparate pieces of information that may not become clear unless and until information is shared and viewed in context. Much of the ability to do this comes down to process and consistent execution. LP managers are continuously working to design and implement processes to prevent losses and eradicate inefficiencies. The challenge is having those processes implemented consistently in the field, while also factoring in the dynamics of different store locations.

For this reason, auditing processes across multiple locations is critical. Auditing questions that might have helped identify the grime wave more quickly (and should be implemented in stores now) include:

  • Does the store manager conduct regular walkthroughs to identify things that don’t seem quite right?
  • Is there a system for reporting or further investigating abnormalities? Are back end systems notified?
  • Are employees trained to respond or report if they see suspicious activities?
  • Are customers being greeted as they enter and move around the store to ensure they know they are noticed?
  • Are surveillance systems tested regularly to ensure they are operational, and capturing the right types of images?

An effective auditing process can help retailers understand their most significant risks and dive into problem areas quickly. This enables them to begin building processes that include an action plan for resolving problematic events or risks. It is hypercritical to see resolution and follow-up happen quickly, as soon as trends start to develop.

Using a combination of people, technology and processes, retail security professionals can be better prepared to capture the day-to-day information that exposes ORC trends early and enables them to take corrective steps in real-time. While we cannot predict exactly what will happen in the future, hopefully the retail LP industry will take away some key lessons from these events to learn from our past and combat ORC more effectively.

 

Andrew Wren serves as chief executive officer of Wren Solutions, a loss-prevention technology provider. To learn more about Wren’s solutions, visit www.wrensolutions.com.

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