Combatting organized retail crime
Organized crime used to be the stuff made for movies: drug trafficking, money laundering, trafficking firearms and smuggling goods.
Now, it’s a growing problem with basic, daily needs. Shoppers might be surprised to see more items locked down at stores or limited quantities available for items including laundry detergent, energy drinks, medicine and fresh meat.
Organized Retail Crime, or ORC, has been on the rise since the height of the pandemic. In 2021, a National Retail Security Survey reported that ORC was up more than 26 percent, equating to nearly $100 billion in losses.
Businesses are left brainstorming ways to keep their goods secure, employees safe and customers satisfied.
J.P. Frattone, director of asset protection and safety at The GIANT Company, said their stores experienced an increase in shoplifting and ORC since the pandemic. These issues are impacting a wider geographical area, Frattone said, with ORC offenders traveling across states and hitting multiple stores in the same market.
“Offenders are taking larger amounts each time,” he said. “At times, we are seeing the criminals become aggressive in the ways which they take goods and toward team members and customers. The same criminals are hitting multiple stores within the same area once they are in a particular market. In the past we would not see traveling crews of ORC activity in the suburbs, but now the crews are impacting those areas.”
Retailers expect a certain amount of shrink each year, but ORC is more than small theft. It carries with it different characteristics. Dawn Roller, director of loss prevention for Brown’s Shoprite Superstores, said offenders are bolder and more brazen. They disguise themselves to avoid facial recognition and can be armed. Frattone said thankfully their stores have not experienced violent behavior, but other retailers have seen increased aggression toward employees and customers.
“The bad actors are becoming bolder in their behavior,” he said.
So what changed? Roller surmises that many existing factors have bubbled to the top since the pandemic: the news cycle, poverty and education issues. Frattone adds that inflation, fewer law enforcement resources, prosecution thresholds and bail reform are impacting higher rates of crime.
The ways that criminals can pawn stolen items also has changed, making ORC easier. “Online marketplaces have been a growing channel as an outlet for retail theft,” he said. “Typically, we would see pawn shops and corner stores as an outlet; however, online marketplaces have grown as an outlet for retail theft.”
Lisa Dell’Alba, president and CEO of Square One Markets, Inc., and PFMA Board president, said a change or increase in in-store theft is less of a problem for their locations. They still experience petty theft and issues with health and beauty products or items like Advil and Tylenol.
For years, they were combating skimming. “What we see now is not an increase but a shift,” she said. “That shift has gone to people breaking sensors and trying to steal fuel again.”
At Square One locations, more people are attempting to steal and syphon gas. “We’re kind of back to some of the old school stuff, in a way,” Dell’Alba said.
Employees also have been targeted by gift card scammers. People have called store locations claiming to be Dell’Alba, asking the cashier to purchase $1,000 in gift cards and call back with the card numbers. These scammers are taking advantage of employees who typically work quiet, overnight shifts and don’t know Dell’Alba, the owner, well.
In grocery stores, ORC is targeting a wide variety of everyday items. Roller said laundry detergent, health and beauty products, fresh meat, seafood and baby formula are popular items. Frattone said their stores experience similar losses, noting that targeted items don’t vary by store location. A recent Business Insider article listed thieves most-wanted items, ranging from appliances to razors to housewares to pet medication.
And theft is one issue, but the effects of ORC are much broader.
“Certainly, this is an impact to everyone who shops and works in our stores. Beyond the potential impact to safety, ORC can also impact pricing, the availability of goods for our customers and the experience they have in stores,” Frattone said.
Retailers are now tasked with implementing new strategies and technology to combat ORC. Some stores are locking up popular items or putting fewer products on shelves. Others are holding special training for team members. Most have had to invest in new security and technology.
Roller trains her team to be observant and use good customer service. “Customer service is key. If you walk up to someone and ask, ‘Are you finding everything you’re looking for,’ they do not want to be identified. They will leave fast.”
But, she is quick to note, “Don’t be a hero.” Dell’Alba feels the same way. Report what you see, but stay safe. “I can replace a Snickers. I can’t replace a team member,” she said.
On the more technical side, Frattone said GIANT locations have implemented new technology that does not impact customers’ shopping experiences, but helps to keep team members safe. “We also implemented third-party security guards, police officers, anti-theft fixtures and mobile parking lot cameras in select locations,” he said.
In addition to increased training, Roller said their stores have implemented new cart technology and self-checkout intelligence that help to resolve ORC problems at checkout. Roller and Frattone also provide their teams with de-escalation training and resources.
Another beneficial tool is collaborating with other retailers and working through PFMA, said Roller and Dell’Alba. Building relationships and sharing information play a major role in combating ORC. Frattone added, “We can leverage resources and bring cases together, versus acting as singular entities. This will allow for a more successful outcome on taking down large criminal enterprises.”
Illicit trade and organized retail crime remain PFMA priorities. The association supports federal work on this issue and is encouraging Congress to pass the Inform Act, which aims to address the national issue of reselling illegally obtained goods online. PFMA also is working at the state and local levels on a multi-pronged approach to combatting the problem: strengthening partnerships between retail and law enforcement agencies and helping facilitate open lines of communication to ensure criminal activity is prosecuted in an intelligent and systematic fashion, and also pushing for policy reforms where gaps or deficiencies in current retail theft laws exist.
To assist with PFMA’s efforts, or to get involved in the association’s Loss Prevention Committee, email email@example.com.
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Liz Kemmery, director of communications