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WASHINGTON -- In an effort to help educate state legislators about the growing problem of organized retail crime, the National Retail Federation here said yesterday it has created a comprehensive package detailing organized retail crime for members of NRF's State Association Council. The announcement was made during NRF's Loss Prevention Conference and Expo, being held in San Diego through June 13.
In the package, NRF provides language to define organized retail crime and outlines the many different pieces of what it entails. State retail associations can use this language to enhance or create legislation in their respective states.
According to NRF's Organized Retail Crime Survey, 79 percent of retailers have been victims of organized retail crime in the past year. In addition to educating state legislators about the growing problem of organized retail crime, NRF is trying to narrow the bridge between state and federal organized retail crime cases, which often require local and state authorities to intervene before meeting the federal threshold. The language in the comprehensive package, outlined by NRF, distinguishes between amateur and professional shoplifters to expedite the process of prosecuting organized retail criminal gangs, according to NRF.
"States and local jurisdictions are a vital partner in the fight against organized retail crime," said NRF v.p. of loss prevention Joseph LaRocca in a statement. "With this model legislation, we are now one step closer to helping law enforcement agencies and retailers nationwide prosecute organized retail crime activity."
The model legislation includes definitions of fraudulent receipts, theft using the retailer's emergency exit to avoid apprehension, theft with intent to resell, third felony act, pattern of criminal offenses, enhanced theft, and the fencing (or sale) of stolen goods.
Also released yesterday at the NRF Loss Prevention Conference were the preliminary results of the latest National Retail Security Survey. The survey found that retail shrinkage averaged 1.61 percent of retail sales last year, nearly unchanged from 1.60 percent in 2005.
Even though shrinkage as a percentage of sales stayed virtually the same, total retail losses increased last year to $41.6 billion, due to higher retail sales in 2006 compared with 2005. The survey, now in its 15th year, is a collaborative effort between NRF and the University of Florida.
"Though total retail losses continue to rise in correlation with industry sales, it is encouraging that shrinkage as a percentage of sales has stayed flat," said Dr. Richard Hollinger, lead author of the report and a criminology professor at the University of Florida. "Retailers seem to be putting a dent in the amount of criminal activity in their stores, though they acknowledge they have a lot of work left to do."
According to the survey, the majority of retail shrinkage last year hit was due to employee theft, at $19.5 billion, which represented almost half of losses (47 percent). Shoplifting accounted for $13.3 billion, or about one-third (32 percent) of losses. Other losses included administrative error ($5.8 billion and 14 percent of shrinkage) and vendor fraud ($1.7 billion and 4 percent of shrinkage).
To combat criminals' brazen actions, retailers have been investing in new technologies to deter, detect, and convict criminals. According to the survey, most retailers' loss prevention systems include burglar alarms (95.7 percent), visible closed-circuit televisions (87.1 percent), and digital video (84.9 percent). Retailers also conduct check screening (60.4 percent), use armored cars (69.8 percent), operate point-of-sale data-mining software (69.1 percent), and employ hidden closed-circuit televisions (57.6 percent).
Product categories that experienced the highest degrees of shrinkage include cards, gifts and novelties; specialty accessories; crafts and hobbies; and supermarket and grocery items.
The National Retail Security Survey is an annual survey of loss prevention executives that benchmarks retail shrinkage and operational information about how retailers are combating losses. The study, which surveyed 139 retailers in the first half of 2007 and uses data from 2006, is a partnership between the University of Florida and the National Retail Federation. The survey was underwritten by the ASIS Foundation, ADT and Stored Valued Systems.