An update of a popular blog post from June 23, 2009

Things have changed, and mostly not for the better, since I wrote about the world of organized crime against retail stores 15 years ago. At that time Stores magazine (the monthly publication of the National Retail Federation) had reported that ORC, or Organized Retail Crime, was estimated to have an impact on 85% of all retailers. This of course represented stores of all sizes, and today it would include fraud against the proliferation of online retailing, meaning more opportunities for cybercrime. There is apparently also an upturn in transnational crime in which large-scale networks operate across borders to steal merchandise and resell it.

Organized crime can hit an independent retailers in the form of a ring of professional shoplifters, or a group of hackers who infiltrate your web site and steal sensitive data. Fraudulent bar code labels, cargo theft, loss of merchandise from shipping docks, and false returns of goods are all part of the ORC threat. Altogether, the FBI estimates that ORC costs retailers $30 billion in losses annually in 2009 – and th00at is projected to exceed $53 billion by 2027.

ORC are large-scale crimes is that frequently involve professional thefts of merchandise for resale rather than personal use. The sale of stolen goods is often related to narcotics distribution. o000rganized crime and money laundering.  About 15% of all merchandise returns are estimated to be fraudulent, often involving returning stolen goods for refunds.

One tactic that is on the increase is flash mob shoplifting, also called “fl0ash robs.” A group of individuals come into a store and overwhelm the staff before stealing electronics and other easily resold luxury items. Take a look at this video on YouTube showing a Houston lululemon store that was hit by this type of crime an astounding 51 times in six months. Clearly this is not a problem that is easily solved, even by greeting customers when they enter the store and checking back with them often. This may help, however, with a smaller number of professional shoplifters. Try to never have just one person working in your store, and train your staff about what to do when they see suspicious behavior.

Professional thieves sometimes work an entire neighborhood, or mall, when they come to town.  Do you have a system in place to notify your fellow business owners immediately when you see this activity happening? You’ll also want to establish a partnership with law enforcement in your area. Inviting a liaison from your police department to meet with you and your fellow businesses can help you be certain you are doing all you can to prevent being victimized.  

One positive change from 15 years ago is the lower cost of surveillance video equipment. These may not deter crime, but can be useful in 0evidence gathering. Make sure your door locks and restricted areas are secure to prevent unauthorized entrances or exits. Take a look at the US Chamber of Commerce “Combating Organized Retail Theft” site for more ideas.

No one likes to think about crime, organized or disorganized, being a part of a shopkeeper’s life. But you owe it to the long-term success of your business to be security savvy. 

Happy Retailing,

Carol “Orange” Schroeder