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As well as being costly for businesses, organized retail crime (ORC) is dangerous, and the problem goes far beyond stores, the National Retail Federation’s (NRF) seventh annual Organized Retail Crime Survey has found. Of the 129 retail companies polled this year, almost all --94.5 percent -- have been victimized by organized retail criminals in the past 12 months, an increase over last year and the most since the survey began.
Additionally, a growing number of retailers said that the criminals are becoming more bold and that, on average more than one in 10 ORC apprehensions, or 13 percent, result in some level of violence, including physical assault and/or battery. This survey marked the first time that NRF has asked loss prevention executives about the number of apprehensions that lead to violence, so there’s no comparable data.
“Organized retail crime affects virtually every single retailer in America, impacting everything from the bottom line to the safety of people in the stores,” explained Joe LaRocca, senior asset protection advisor at Washington-based NRF. “As criminals become more brazen, retailers are working fervently to cut down on organized retail crime activity in order to ensure the safety of their associates and shoppers.”
Not only are the criminals more violent, members of these crime rings are usually engaged in other illegal activities. In the survey, retailers estimated that 41 percent of apprehended offenders are involved in such “gateway” crimes as drug and weapon offenses, and gang activity. Further, surveyed retailers said that, on average, 12 percent of their ORC cases consist of collusion between internal and external actors, highlighting the major part a few dishonest employees can play in these types of crimes.
As well as increase in the number of retailers who have been targets of ORC, the level of organized retail crime activity has continued to rise. According to the survey, 84.8 percent of retailers think ORC activity has grown within the past three years. Also, more than half of survey respondents, or 58.3 percent, believe their top management understands organized retail crime, a 16 percent rise from last year. As a result, many companies are devoting additional resources to the issue, including more personnel and a bigger technology investment.
While ORC has historically been experienced as coordinated thefts in stores, retailers were asked for the first time this year what threats exist before the goods arrive on shelves. The answers suggested that ORC should be fought just at store level, since fully half of respondents, or 49.6 percent, say they’ve been victims of cargo theft in the past 12 months. While thefts often happens on the way from the distribution center to the store, according to 57.4 percent of those polled, retailers also reported being victimized at other points along the supply chain, including between the manufacturer and the distribution center (39.7 percent), at the DC (22.1 percent), and as merchandise moves from one retail location to another (22.1 percent).
“Cargo theft is a rewarding, profitable enterprise, and criminals are increasingly finding ways to infiltrate the supply chain,” noted LaRocca. “As thieves target shipping containers, retailers and law enforcement are fighting back with new initiatives and operations to directly address cargo theft.”
The survey also asked retailers what cities were the most problematic for ORC rings. The top cities, in alphabetical order, were Atlanta, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York/northern New Jersey, Philadelphia and Phoenix.
Conducted in April and May of this year, the 2011 NRF Organized Retail Crime survey featured responses from loss prevention executives at department/big-box stores, discount, drug, grocery, restaurant and specialty retailers. In conjunction with the release of the survey, NRF has introduced a resource center offering the latest information on ORC at www.nrf.com/organizedretailcrime.