Survey: Retailers devoting more resources to fighting ORC

Despite increased efforts by retailers and law enforcement to crack down on organized retail crime (ORC) in recent years, it remains a significant problem throughout the industry.

The National Retail Federation recently released the results of its’ 10th Annual Organized Retail Crime Survey, which found that of the 76 senior loss prevention executives polled, eight in 10 (88.2 percent) indicated that their organizations had been a victim of ORC in the past year, which was down slightly from 93.5 percent in last year’s survey. For the first time, the NRF also asked retailers how ORC is impacting their online operations and nearly half of those surveyed (48.3 percent) reported that their online operations had indeed been impacted.

“Few retail crimes reach the level of concern among retailers that organized retail crime does,” Rich Mellor, senior advisor, asset protection at NRF said in a statement. “For the better part of 15 years, savvy criminals and the enterprises they’re a part of have forced retailers to change how they deal with fraud, including maximizing efforts to partner with and educate law enforcement. These partnerships have become a crucial part of the fight against retail crime gangs, and while those invested in tracking down retail criminal enterprises can point to some success, it’s evident there’s still a big fight ahead of us.”

However, it appears that more senior level executives in retail organizations are beginning to take notice of the impact that ORC is having on their companies as many survey respondents indicated they are receiving additional resources and support from the C-suite. Nearly three-quarters of those surveyed (74.7 percent) say their organizations are allocating more resources to fight ORC and of that group, 22.7 percent are adding staff resources, 34.7 percent are adding technology resources and 17.3 percent are adding budget resources. In addition, a number of retailers report investing more than $1 million dollars annually on staffing ORC investigation teams.

“Tighter budgets in retail have made it taxing on some retail companies to adequately prepare for and even prevent organized retail crime from happening in their stores, however, more and more retailers are seeing the value of investing in loss prevention to combat this multi-billion dollar problem that continues to evolve in terms of its scope and sophistication,” said Mellor.

According to the NRF, as of this month, 25 states have enacted legislation aimed at stiffening penalties for those found to be involved with ORC activities. In fact, just over 30 percent of those surveyed said they noticed a reduction in ORC activity in states where these laws were present. Of those retailers who have a presence in states with existing ORC laws, 52.1 percent noticed a positive impact on their ability to prosecute ORC offenders more effectively and 88.5 percent said they have noticed an increase in support from law enforcement agencies when actively investigating organized retail crime cases.

Although the passage of ORC laws on a state level is significant, the NRF believes that federal legislation is still needed to put a more serious dent in these crimes.

“I think the next step for us, as a group, if in fact we could achieve this in short order, it would be a huge step forward if we get federal legislation in place. It’s not that we haven’t been working on that. Retailers, as well as our legislative connections, have met and discussed this at some length. There is willingness and a desire to help the retailers on this on Capitol Hill. That’s what we’re impatiently waiting for and that will make an impact on this crime,” Mellor said in an interview with SIW last summer.

While there may not be federal laws in place as of yet to help stop ORC, that doesn’t mean that federal authorities have taken notice of how big of problem it has become. Last year, federal, state and local authorities announced the formation of a new task force in South Florida, a hotbed for ORC activity, designed to reign in organized retail theft and help coordinate prosecutions of ORC-related cases. 

Some of the survey’s other highlights include:

  • 63.6 percent of respondents say they have identified or recovered stolen merchandise from a physical fence, such as a pawn shop or flea market, while 68.2 percent say they have recovered merchandise from an e-fencing location, such as a third-party website, auction site or blog. 42.4 percent say they have seen an increase in physical fencing activity in the past 12 months, and more than half (53.9 percent) have seen an increase in e-fencing activity.
  • More than one-third (35.4 percent) of retailers surveyed said they were victims of cargo theft in the past year. About a quarter (24.2 percent) of respondents said they’ve experienced cargo theft at the store, 41.4 percent said the theft took place en route from manufacturer to distribution center, 51.7 percent said it occurred en route from distribution center to the store, and 13.8 percent said it occurred at the distribution center.
  • The top 10 cities for ORC activity are (by rank):
  1. Los Angeles
  2. Miami
  3. Chicago
  4. New York
  5. Houston
  6. Atlanta
  7. Baltimore
  8. San Francisco/Oakland
  9. Arlington/Dallas/Fort Worth
  10. Detroit