Organized retail crime up this holiday, LA hit hardest

By

Cassidy Mantor

Published
Nov 17, 2017

96 percent of retailers reported organized retail crime (ORC) in the 13th annual National Retail Federation (NRF) study published today. Losses increased to $726,351 per $1 billion in sales, up from $700,259 last year.

NRF Vice President for Loss Prevention Bob Moraca said thieves are becoming "smarter, more brazen, more aggressive" and even attacking employees and shoppers. Moraca said "Fighting ORC is a full-time job, and retailers must learn how to stay a step ahead of these thieves."

While Moraca said ORC is prevalent across the country, Los Angeles is the hardest hit and has topped the list for ORC for the past five years. New York ranks second, followed by Houston, Miami and Atlanta rounding out the top five. Chicago, Orlando, San Francisco/Oakland, Orange County (CA) and Northern New Jersey completed the top ten regions registering the highest incidences of ORC in the country.

The study found that six in ten merchants had recovered stolen goods from physical locations including pop-ups and kiosks, similar to last year. The most frequently stolen goods include designer clothes, designer handbags, denim pants and razors.

40 percent of retailers were victims of cargo theft, where goods are stolen en route from a distribution center to a physical store. This number has decreased from the 44 percent reported last year.

The most positive data from the study is that online ORC has reduced, despite the ability of thieves to use the internet anonymously. 56 percent of retailers found they were victims of online ORC, down from the 75 percent reported last year. 28 percent of retailers in the US found their products were illegally exported abroad.

While ORC is traditionally thought of as a front-end operation of stealing goods from stores and reselling them quickly for profit, return fraud is a growing problem. 13 percent of holiday purchases are expected to be returned. Of that 13 percent, 11 percent is anticipated to be fraudulent.

Almost a fifth of returns without receipts are fraudulent. The most common types of return fraud reported include returns of stolen merchandise, employee return fraud, and returns of merchandise purchased on stolen credit cards.

Returns made by ORC groups, wardrobing and returns using counterfeit receipts or e-receipts are other ways in which criminals are carrying out return fraud.

NRF surveyed 63 loss prevention departments in retailers from specialty, discount, drug, grocery, big box and department stores.