Battling the ORC epidemic

This week saw the release of two noteworthy surveys on retail crime, the results of which should be eye-opening to lawmakers and the American public.

According to the 24th Annual Retail Theft Survey conducted by loss prevention and shrinkage control consulting firm Hayes International, both apprehensions and recovery dollars from shoplifters and dishonest employees rose in 2011. In fact, according to the survey, which consisted of responses from 24 major retail companies with sales exceeding $589 billion, more than one million shoplifters and dishonest employees were apprehended in 2011, resulting in the recovery of more than $161 million.

One particularly disturbing trend noted in the survey is that both apprehensions and recovery dollars have increased in eight of the past 10 years. Increased organized retail crime (ORC) was one of the primary reasons cited by retailers for the rise in shoplifting activity.

The National Retail Federation also published the results of its eighth annual Organized Retail Crime survey this week, which found that 96 percent of 125 retail companies surveyed, had been the victim of ORC in the past year, up from 94.5 percent the previous year. More than 87 percent of respondents said that they believe ORC has risen in the U.S. over the past three years.

As to be expected, many of the items targeted by ORC gangs, according to the NRF survey, included high-end electronics such as television, laptops and cell phones. However, there are a myriad of other items that retailers say they have to safeguard from shoplifters that many people would never think about including energy drinks, diabetic testing strips, pregnancy tests, and Kitchen Aid mixers just to name a few.

Ask any loss prevention professional about the biggest problem they face and the first answer they will nearly always give you will be organized retail crime. Earlier this year at ISC West, I had the opportunity to speak with a security manager at a major U.S. clothing retailer, who explained the intricacies of these ORC gangs and their methods. These groups are generally not composed of just a couple of shoplifters with aluminum foil lined bangs looking to snatch high-end purses and jeans. He said that these gangs usually involve multiple operatives that will travel down stretches of interstates in a given region, going from store-to-store. They steal so much that often times they will have to rent out storage units to house the pilfered merchandise until it can be sold online or at a flea market.

The good news, according the NRF survey, is that many retailers believe that law enforcement authorities have taken note of how widespread the problem has become. And while security technologies can help, it will take a combination of both technology and people (loss prevention and law enforcement) working against ORC gangs to significantly reduce shoplifting losses.

I agree with the NRF, which said that while some states have taken steps to increase penalties for those found guilty of ORC-related offenses, more needs to be done on the federal level with regards to the issue because the fact remains that theses crimes reach across state lines. In the end, we as consumers are impacted by these crimes as retailers are forced to raise prices to compensate for the losses incurred by ORC activity and it’s time we let our elected officials know that we can no longer ignore this problem.