As challenging as 2021 has been for myriad organizations, it is difficult to blame retailers for losing billions a year and shutting down stores. Our federal, state and local law enforcement agencies continue to make arrests involving nonviolent criminals who have made retailers recent targets of wholesale theft, stealing and looting. Most of those apprehended simply get hit with fines and probation. Retail theft and fraud are seen as nonviolent offenses. Loss prevention and store workers have been assaulted and even killed just going to work. Our political leaders tend to blame whatever political party is in power for being “soft” on crime. But as the mayhem increases, the blame game has to stop.
The recent organized retail criminal activity in California, Chicago and New York City have largely been smash and grab or flash mob crimes. Large groups of individuals smash the glass of the retail stores or they storm stores with multiple suspects overwhelming store employees and store security or contract security guards. Many of the stores being targeted are high-end retail stores like Louis Vuitton, Apple, Nordstrom and more recently in Minnesota, Best Buy stores. These stores stock expensive handbags, clothing, phones and pricey electronics which are traditional items prized by retail thieves. These exclusive goods provide criminals a much larger profit when sold online or through other sources like pawn shops or on the streets. These brazen and violent crimes are keeping customers away and the fear of physical violence are traumatizing store employees.
Loss prevention and organized retail crime personnel must work with law enforcement to strengthen security patrols at these types of businesses to thwart the rising tide of brazen violent organized theft. Technology advancements can help retail security and law enforcement analysts monitor social media chatter to head off potential flash mob coordination online. But law enforcement and retail security professionals must also monitor online platforms that are selling these stolen goods.
There are some simple and cost-efficient solutions like glass security film that prevent these types of crimes protecting large panes of window glass from destruction from hammers, sledgehammers and crowbars. Why more retailers and business owners are not investing in this solution is baffling.
Legislative Failures
There have been many failures over the years seeking to protect the retail community, and there is plenty of responsibility to go around, however, the most obvious failure has been the inability of Congress to take action on numerous proposed legislation.
In July 2008, a bipartisan bill – H.R.649, the Organized Retail Crime Act of 2008 – was introduced by nine co-sponsors, five Democrats and four Republicans, and although the bill was not enacted, its provisions could have become law by being included in another bill. It is common for legislative text to be introduced concurrently in multiple bills (called companion bills), re-introduced in subsequent sessions of Congress in new bills, or added to larger bills (sometimes called omnibus bills).
The bill, first proposed by Rep. Brad Ellsworth (D-Ind.), sought to amend the federal criminal code to define “organized retail crime” as: (1) stealing, embezzlement, obtaining by fraud, pretenses, or other illegal means of retail merchandise in quantities that would not normally be purchased for personal use or consumption to resell or otherwise re-enter such retail merchandise in commerce; or (2) the recruitment of persons to participate in such criminal activities. The amendment is aimed at combating, deterring and punishing individuals and enterprises engaged nationally and internationally in organized crime involving theft and interstate fencing of stolen retail merchandise.
The second piece of legislation, H.R. 6713, the E-fencing Enforcement Act of 2008, was introduced by Rep. Robert Scott (D-Va.) on July 31, 2008. The proposed act sought to amend the federal criminal code to provide for more effective enforcement of the federal prohibition on the interstate shipment of stolen property. Finally, on August 1, 2008, Sen. Richard Durbin (D-Ill.), along with Sen. Amy Klobuchar (D-Minn.), introduced S. 3434, the Combating Organized Retail Crime Act of 2008. This legislation proposed to amend the federal criminal code to (1) expand the definitions of the crimes of transporting and selling or receiving stolen goods to include thefts having an aggregate value of $5,000 or more during any 12 months; (2) modify the crime of fraud involving access devices to include the Universal Product Code label as an access device; and (3) set forth provisions to prevent sales of illegally obtained goods in a physical or online retail marketplace and to grant enforcement powers to states to obtain injunctive and other relief against persons engaged in organized retail crime. The bill further proposed to direct the United States Sentencing Commission to review and if appropriate, amend the federal sentencing guidelines for persons convicted of offenses involving organized retail crime.
Klobuchar stated: “As a former prosecutor, I know that we must provide our law enforcement with the tools they need to get the job done. This bill will toughen laws against these crimes and help law enforcement fight organized retail crime.”
Organized retail crime is the coordinated theft of large numbers of items from retail stores with the intent to resell those items, often at below-market prices. Organized retail crime rings typically resell stolen merchandise in physical marketplaces as well as on internet auction sites. Internet sites are particularly tempting avenues for these sales since it enables criminals to reach a global market and allow sellers to operate anonymously while maximizing return. Retailers and the FBI estimate that ORC costs retailers billions of dollars in revenues and costs states hundreds of millions of dollars in sales tax revenues.
The Klobuchar/Durbin Organized Retail Crime legislation, like previous other legislation, continues to stall in Congress.
Taking a Personal Stand
With more than 25 years as a loss prevention professional, 12 of those years devoted to investigating organized retail crime, it is alarming to see the number of individuals we have investigated who considered this brand of retail crime a full-time job. Spending 10 years at TJX Companies as a National Task Force Investigator, I led teams that initiated complex retail crime investigations and professionally presented them to all levels of law enforcement.
This collaborative private-public sector approach by investigators to help law enforcement is vital. It relieves them of the burden of doing all the leg work and offered us the ability to build agency relationships while delivering cases that prosecutors were eager to prosecute. Most district attorney offices across the country understand that unless the infamous “felony threshold” is reached (here in Massachusetts at the time I investigated these cases were $250 and today it is $1,200) nothing would happen to the suspects except being charged with misdemeanors. In these types of cases, suspects are usually pushed through the judicial system and given fines and/or probation. Sadly, a majority of suspects fail to show for the court cases and warrants are issued, meaning that today there are probably a lot of retail criminals walking around with “warrants” for their arrest for shoplifting offenses that go back years. The law enforcement community is frustrated. They do the work but many times their hands are tied because we do not provide proper common-sense legislation to make their cases easier to develop.
We created a LinkedIn group in 2011 to help educate, provide training and raise awareness of this ongoing social problem. It was surprising to see the level of interest the group generated as we quickly garnered thousands of members. As an entrepreneur, I was able to leverage my group to create a business opportunity in 2021 in Massachusetts with the National Anti Organized Retail Crime Association. When we reached 3,500 global members globally we established a DBA known as NAORCA Worldwide At NAORCA Worldwide our focus is to work with businesses to reduce theft, fraud and cybercrime. At NAORCA we aim to find solutions.
About the author: Christopher J. McGourty is the Founder and President at NAORCA Worldwide - The National Anti-Organized Retail Crime Association. His background in retail security and loss prevention includes stints as a loss prevention manager with both Genuine Parts Company and Lowes, and close to a decade with the National Task Force for ORC Investigations. He can be reached at www.naorca.org.
