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Organized retail crime

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Organized retail crime (ORC) refers to professional criminal enterprises ranging from regional gangs to international crime rings and other organized crime focussing on retail environments. Operations include truckjacking, shoplifting, smash and grab, cargo theft, and cargo diversion. One person acting alone is not considered an example of organized retail crime. Working in teams, some create distractions while others steal items judiciously, indiscriminately or violently. Often, they are stocking up on specified items at the request of the organized crime or gang leader. It is not uncommon for the criminals to have accomplices working in the retail store or corporation.[1][2]

The FBI estimated in 2010 that the losses attributed to organized retail crime were as high as $30 billion a year.[3]

United Kingdom

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In the UK, respondents to the British Retail Consortium's annual crime survey for the financial year 2013-2014 estimated that organized retail crime accounted for 40% of all shop thefts.[4]

Canada

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The Retail Council of Canada claimed in 2023 that organized retail crime "costs Canadians retailers around $5 billion per year."[5]

Australia

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The National Retail Association says: "Individuals are often assumed to be working alone when shoplifting however, commonly they are not working alone but with others who create distractions whilst goods are stolen, in order to meet the requirements of the crime ring leader".[6]

United States

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Organized retail crime rose by 2023, when Nordstrom,[7] Macy’s, and Old Navy[8] all publicized major organized shoplifting activity. Target claimed in September 2023 that theft and organized retail crime helped drive its $500 million decrease in annual profits. Some store branches of major chains were closed.[9]

Theft had risen to $70 billion in 2020, according to the Retail Industry Leaders Association (RILA). A pattern emerged of crime rings consisting of two parts—persons who would steal a high volume of goods from multiple stores, and others who would sell the stolen goods, sometimes via online marketplaces, converting them into cash. Walmart and Amazon posted banners on their websites asking their customers to report products for sale on other sites that they believed to have been stolen, in line with a new U.S. law that went into effect in June 2023.[10]

However, the National Retail Federation (NRF) said that same month that the effect of theft on retailers’ bottom lines was about the same as in previous years, with total retail shrinkage at $112 billion in 2022 (1.55% of sales), up from $93.9 billion (1.44% of sales) in 2021. External theft, including organized retail crime, represented 36% of losses, versus 37% in 2021. Other contributors were employee/internal theft (29%), and process/control failures (26%).[11]

From 2022 through August 2023, 9 U.S. states passed laws to impose harsher penalties for organized retail crime offenses.[12]

California made organized retail theft a distinct crime.[13] In 2024, California lawmakers proposed expanding penalties for individuals involved in organized retail theft.[14]

Notable cases

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In early 2008 in Florida, a single shoplifting investigation turned up a massive organized enterprise. Operating for at least five years, criminals had stolen up to $100 million in medicine, health and beauty goods.[15]

Texas FBI agents pulled over a rental truck, leading them to $2.7 million in stolen assets. The goods included $1 million in stolen baby formula that was stored in rodent-infested garages with no temperature control.[16]

In January 2013, in Pennsylvania, West York Police (York County) announced the arrest of over 130 people and the organizer of a major organized retail crime ring in which the individuals targeted over 90 stores at over 300 locations in 5 counties in Pennsylvania and 2 counties in northern Maryland, with an estimated loss to retailers at $1 million.

In December 2023, husband and wife Kenneth and Michelle Mack were arrested in the San Diego area on charges of operating a retail crime empire centered on shoplifting. The Macks resold cosmetics worth $8 million, stolen by a dozen women from Ulta, Sephora and other stores, on Amazon.[17] In July 2024, the Macks pleaded guilty to organized retail theft and conspiring to commit organized retail theft.[18] They were each sentenced to five years and four months in prison and required to pay $3 million in restitution.[19]

Current US legislation

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On July 15, 2008, Reps. Brad Ellsworth, D-Indiana, and Jim Jordan, R-Ohio, introduced the Organized Retail Crime Act of 2008[20] that would make it a felony to engage in activities that further organized retail crime. Specific and narrow obligations upon on-line marketplaces known to be used by high-volume sellers of stolen merchandise are also included to benefit legitimate online businesses.[21]

On August 1, 2008, Sen. Dick Durbin, D-Ill. introduced the Combating Organized Retail Crime Act of 2008 that would give law enforcement the ability to prosecute, among other things.

In January 2023, Sen. Chuck Grassley, R-Iowa, and Sen. Catherine Cortez Masto, D-Nevada, introduced the Combating Organized Retail Crime Act (S. 140), which would update current federal criminal penalties related to organized retail crime and establish a new law enforcement coordination center within Homeland Security Investigations at the Department of Homeland Security to improve coordination between federal, state and local law enforcement agencies. Companion legislation was introduced later in 2023 in the House of Representatives (H.R. 895), sponsored by Reps. Ken Buck, David P. Joyce, Susie Lee and Dina Titus is co-sponsored by nearly 70 other representatives. This legislation is supported by the NRF and other retail industry groups.[22]

In December 2023, NRF retracted a claim it had made in April that "nearly half" of retail inventory shrinkage in 2021 was attributable to ORC. Data actually showed that 37% of shrinkage was attributable to all external theft, not limited to ORC.[23]

Multi-national crime

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Some criminal organizations are multi-national (or trans-national) with operations in and between several different countries.[24] ACAMS, Largest International Financial Crime Prevention Community Worldwide, has said: “Organized retail crime (ORC) is a low-risk, high-reward business line for transnational criminal organizations’ portfolios, that presents a significant financial and public safety risk".[25] They indicate that one type of operation is for criminal operatives to smuggle destitute people into a country and have them pay for their transport by conducting directed retail shop lifting, often moving from city to city.

References

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  1. ^ Johnston, D (2023), 2023 Retail Security Survey, The state of national (USA) retail security and organized retail crime (PDF), National Retail Federation, USA, retrieved 11 October 2023
  2. ^ Crime Survey, 2023 Report (PDF), British Retail Consortium, 2023, retrieved 10 November 2023
  3. ^ "FBI — Fighting Organized Retail Theft". Fbi.gov. 2010-04-13. Retrieved 2013-03-16.
  4. ^ "Retail crime in UK at 10-year high, industry report says". BBC News. 2015-01-20. Retrieved 2015-11-22.
  5. ^ "Organized retail theft can involve violence, as Toronto police warn shoppers ahead of holiday season". Toronto Star. 2023-10-03. Retrieved 2023-12-08.
  6. ^ "Organised Crime & Gangs". National Retail Association. Australia. Retrieved 9 November 2023.
  7. ^ "Nordstrom in Los Angeles ransacked by mob of nearly 50 people". TODAY.com. 14 August 2023. Retrieved 8 November 2023.
  8. ^ Dobrosielski, Chelsea (22 June 2023). "Thieves Steal Macy's, Old Navy Clothing as Analysts See 'Turning Point' for Retail Shrink". Sourcing Journal. Retrieved 8 November 2023.
  9. ^ Kavilanz, Parija (27 September 2023). "This isn't theft of need. A more insidious type of crime is pushing some stores to close | CNN Business". CNN. Retrieved 8 November 2023.
  10. ^ Cavale, Siddharth (29 June 2023). "Explainer: 'Organized' retail crime: a 'multi-billion dollar problem'". Reuters. Retrieved 8 November 2023.
  11. ^ Reagan, Courtney (26 September 2023). "Retail theft isn't actually increasing much, major industry study finds". CNBC. Retrieved 8 November 2023.
  12. ^ Fonrouge, Gabrielle (11 August 2023). "Retailers are shaping a wave of laws to crack down on organized theft — here's how they do it". CNBC. Retrieved 8 November 2023.
  13. ^ Williams, Paige (2024-03-18). "The Crime Rings Stealing Everything from Purses to Power Tools". The New Yorker. ISSN 0028-792X.
  14. ^ "Democratic lawmakers introduce legislation to target organized retail theft, online resellers". Los Angeles Times. 2024-02-16.
  15. ^ Walter, Shoshana (2008-01-25). "Multimillion-dollar Theft Ring is Broken | theledger.com | The Ledger | Lakeland, FL". The Ledger. Retrieved 2012-01-29.
  16. ^ Siljander, Raymond P. "Retailers Organize Against Crime". Security Management. Retrieved 2012-01-29.
  17. ^ Fonrouge, Gabrielle; Zamost, Scott; Reagan, Courtney (2024-03-12). "Inside the organized crime rings plaguing retailers including Ulta, T.J. Maxx and Walgreens". CNBC.
  18. ^ Vargas, Ramon Antonio (2024-07-17). "California woman pleads guilty to running $8m cosmetics retail theft ring". the Guardian. Retrieved 2024-07-19.
  19. ^ Zamost, Scott (2024-07-19). "Retail crime 'queenpin' faces five years in prison, millions in restitution". NBC New York. Retrieved 2024-07-19.
  20. ^ "FDsys - Browse Congressional Bills" (PDF). Frwebgate.access.gpo.gov. Retrieved 2013-03-16.
  21. ^ The Online Office of Congressman Brad Ellsworth - July 15, 2008: Ellsworth, Jordan Introduce Bill to Fight Organized Retail Crime, Protect Online Consumers
  22. ^ "The rising toll of organized retail crime". 28 August 2023.
  23. ^ Fonrouge, Gabrielle (December 7, 2023). "Retail lobby group's retraction of key crime claim shows how hard it is to track theft". CNBC.
  24. ^ Major Middle Eastern Crime Ring Dismantled, FBI, 2013, retrieved 11 November 2023
  25. ^ Organized Theft Groups and Organized Retail Crime, ACAMS, 2023, retrieved 14 October 2023
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