How it happens, and what stores can do to stop it
- According to the National Retail Federation, organized retail crime rose 26.5% between 2021 and 2021.
- Walgreens, Walmart and Target all said that organized retail criminality is a threat to their businesses.
- These crimes have become increasingly violent, the National Retail Federation found.
Target is expecting to lose $600 million in profitsBecause of it. Walgreens reported a 52% increase in itSince 2019. Everybody, from retailers to law enforcement to the federal government, is trying to stop it.
It’s organized retail criminality, and it’s a problem that costs the industry nearly $100 billion.
These crimes are not as simple as a shoplifter taking a product. Instead, these crimes are committed by criminal organizations that steal large quantities and resell them for profit.
“This isn’t petty theft. It’s not a case of someone who can’t pay for tomorrow’s food. These are gangs who actually go into our stores and empty out our beauty products stores,” James Kehoe (chief financial officer at Walgreens) said during the company’s January earnings call. It’s a real problem, just like all our peers.”
This is a growing problem. A 2022 study the National Retail Federation conductedThe NRF found that organized retail crimes at retailers increased by 26.5% in 2021, compared to the previous year. Organized retail crime mainly drove inventory shrink — what happens when a store has fewer products on its shelves than recorded in its inventory — and resulted in $94.5 billion in losses for retailers last year, the NRF found.
Target, Walmart and Walgreens are just a few of the retailers that have cited retail theft as threatening their businesses. These crimes have turned violent for eight of the 10 retailers who participated in the study. Walmart even said stores may have to closeIf the thefts do not stop.
What is organized retail crime?
Organised retail crime is not the $10,000 jewelry theft you see in movies, Jake Stauch (director of product at Verkada security company) said.
Insider was told that a group who specialize in thermal coats rob the goods and then “smash-and–grab” jobs to break into the retailer to resell them or sell the goods back at local retailers.
According to David Johnston (NRF vice president of asset protection & retail operations), the criminal organizations can be local or state-level, as well as multi-state and international.
Johnston stated that these criminal networks are often involved in other crimes and are highly organized. “Human Trafficking is one. They will often work with people who bring immigrants over the borders. To pay their fees they’ll use them to boost their ability to steal merchandise.”
Security experts claim that these crimes have made retail workers more vulnerable.
An earlier version of this article was published in 83-year-old worker at a Home Depot store in North Carolina diedA theft suspect shoved him to death in October. A Los Angeles Rite Aid employee was killed while attempting to stop a shoplifter from leaving the store last year. Innocent shoppers can also be hurt by these crimes. A West Virginia woman was awarded nearly $17 million in damages from Walmart after she was injured in 2015 when a man being pursued for shoplifting at the retailer stumbled into her.
Corie Barry, Best Buy’s CEO, stated that “this is a real problem that hurts and scared real people” during the company’s third quarter earnings call in November. “We are doing a lot to protect our customers as well as our people. But you can see that pressure in the financials. You can also see that pressure among our associates, which is more important. This is unacceptable for our associates.
Where do the products end?
Many times, stolen products end up online almost immediately, often disguised among millions of legitimate third-party vendors. Organized retail crime has been fueled in large part by the rise of ecommerce. It’s easier to sell online than to “fence” stolen goods in brick-and-mortar flea markets or pawn shops, Scott Glenn (Vice President of Asset Protection at Home Depot). told Insider last year.
Glenn stated, “Years ago there was eBay. That was it.” “Now, there are about 80 large-scale online sellers out there, and not all of them have equal control and vetting.”
According to the Retail Industry Leaders AssociationAn industry trade group, the proceeds of these online sales have been tied to other criminal enterprises such as drug and human trafficking.
“This money is used for weapons, this money can be used to do the exact same thing as narcotics money,” Tarik Sheppard (a NYPD captain and president of the Metro Organized Retail Crime Alliance), said. told NBC Nightly News.
What can stores do to stop organized retail crime from happening?
Retailers are taking measures at the store level to prevent thefts.
CVS has been increasing time-delay safesIts brick-and-mortar locations are: Rite Aid execs recently warnedThey say they are “looking at literally putting all behind showcases” in an effort to discourage thieves. Home Depot was introduced power tools that won’t workIf they are stolen, Big Lots stated during an earnings call that it would increase its use carts with wheel locks to stop people pushing cartloads of goods out of the door.
But for typical shoppers — meaning those who plan to pay for what’s in their carts — these measures are irritating at best, and retailers recognize that. John Mulligan, chief operating officer of Target, stated: during the company’s November earnings callThese anti-theft measures are “obviously something we don’t like to do” as it makes it “far more convenient for guests as these stores are stocked.”
Retailers argue that these store-level technologies do not go far enough in deterring theft. They are calling for a federal crackdown against trafficked goods online to deter these thefts. Dozens of retailers and industry groups — including Amazon, Home Depot, Lowe’s, Target, Walmart, and Walgreens — wrote a letter to congressional leadersIn October, they urged them to pass legislation that would allow online marketplaces to be established. verify the identity of third-party sellersHigh volumes of goods are sold.
This bill, the INFORM Consumers Act is that. passed in the US House of Representatives last monthThe US Senate is currently waiting for a vote on the bill. Another bill was introduced in October in the House. set up an organized-retail-crime centerThe Department of Homeland Security facilitates training and information sharing across the country.
In the meantime cities and states across the nation are forming organized-retail-crime associationsThese are a group of local law enforcement officers, retailers, and prosecutors who work together to crack down on thefts and prosecute perpetrators.
Johnston stated that retail theft “is not a victimless crime.” It doesn’t affect only those who make millions or billions. Organized retail theft has an impact on everyone. If national retailers discuss price hikes and store closures as a result, that ripples down to the community.
Have a tip? Ben Tobin can also be reached via email at firstname.lastname@example.org or via Signal’s encrypted app Signal. Or by text at 703-498-9171
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