organized crime consists of shoplifting in a van with boxes

Targets, Trends, and Threats in ORC

In a recent webinar CONTROLTEK hosted in conjunction with the Loss Prevention Foundation, I was joined by Ben Dugan, CFI, director of ORC and corporate investigations at CVS Health, and president of the National Coalition of Law Enforcement & Retail (CLEAR).

With organized retail crime (ORC) at the forefront of everyone’s minds, this timely discussion centered around targets, trends, and threats impacting retailers today. “Organized retail crime is the number one contributor to ongoing security threats in the retail industry today,” said Dugan. While the COVID-19 pandemic certainly plays into this, Dugan stated that “retailers are considering ORC their number one challenge—this is what keeps them up at night. There is an increase due to COVID, but also an increase in the associated violence that goes along with ORC.” Dugan also noted that some retailers have seen incidences involving external theft along with violence double since COVID-19, due to emboldened thieves.

A Perfect Storm for ORC

In a surprising industry shift in conversation, we are now starting to see more CEOs talk publicly about shrink, and how they cannot reach their financial or profitability numbers due to ORC—pushing the issue to the top of the list for C-suite executives, who are now spending millions to combat organized crime rings that steal from their stores and peddle goods online and through e-commerce platforms. COVID-19, decriminalization, bail reform, and the recent political climate have created a “perfect storm” of sorts, escalating the growing ORC problem facing retailers in cities across the globe.

A thorough exercise to identify retail loss (collecting data on annual sales and shoplifting rates across different retail environments, etc.) estimates that organized retail theft accounts for almost $45 billion in annual losses for retailers, up from $30 billion a decade ago, with 100 percent of retailers reporting that they are the victim of organized theft, which now exceeds internal employee theft.

The Rise of Online and e-Commerce-Based ORC

Online and e-commerce-based ORC is steadily on the rise, with platforms such as Amazon, Facebook Marketplace, eBay, Craigslist, Instagram, and OfferUp as some of the popular choices. This significant growth in online marketplaces since 2017 has changed the landscape for ORC investigators, fueling theft on a large scale in the shadows on the internet.

In a joint effort to combat these criminal and illicit sellers, the Buy Safe America Coalition and Retail Industry Leaders Association (RILA) introduced a federal bill called the INFORM Act. Simply put, the INFORM Act will require online marketplaces to collect and verify third-party sellers’ government ID, tax ID, bank account information, and contact information, and require high-volume sellers to disclose contact information to consumers. The goal is to dissuade these criminals from opening marketplaces and operating in an unregulated environment. At times, investigations tend to be reactive, and unless we as an industry can get out ahead of these thefts, nothing is going to change.

Merchandise Trends in ORC

While the top categories where we see theft has not changed much in the past few years, we have seen certain items flood online spaces. Popular items include, but are not limited to:

  • Over-the-Counter Medications
  • Health & Beauty Aids
  • Home Improvement/ High-end Tools
  • Clothing/Soft-line Goods

Interestingly, the type of product that is stolen almost always determines the level of criminality associated with it. For example, stolen soft-line goods are sold in completely different ways than OTC medications, thus resulting in a different type of investigation and solution. Therefore, it is important to realize we cannot treat ORC the same in every instance.

ORC Fuels Other Criminal Activity

As previously covered in my article “The Link Between Human Trafficking and ORC,” what most people do not realize is that ORC fuels many other criminal activities, one of which is human trafficking, which often results in labor trafficking. This $150 billion industry is a major component of ORC—with many people being brought to this country for this specific purpose. Unfortunately, in investigations we often see individuals who were given the choice between working in sex trafficking, trafficking in narcotics, or being a booster to steal items from retail locations. Those individuals will often pick the option with the lesser penalty, and least dangerous to their wellbeing, to pay the individuals back that brought them into this country.

Understand Your Enemy

Just as you need to understand where your product goes, you need to understand who is stealing it, their motivation, and the methods in which they are successfully doing so. Organizations like CLEAR help to build and support public-private sector partnerships focused on improving safety. Through collaborative training, education, communication, and networking opportunities, CLEAR helps members become more informed, prepared, and vested in the security and protection of retail environments and the communities in which they serve. Be sure to check out the upcoming 2021 CLEAR conference for topics such as the real-time leveraging of technology and intelligence, the ins and outs of social media and open-source investigations, how to develop admissions during interviews and interrogations, and the ways in which you can utilize retail analytics and intelligence to identify suspects in criminal investigations. I will be speaking about the link between human trafficking and ORC, and look forward to seeing many of you there as we discuss the future of retail.