Organized Retail Theft On the Rise

NRF Organized Retail Crime Survey Finds Criminals View Global Recession as Opportunity to Abuse Retailers and Consumers

--Organized Retail Crime Activity Jumps by 8%, According to NRF Survey--

Washington, June 10, 2009 – As another illustration of the wide effect of the down economy, retailers and consumers are increasingly being victimized by organized retail crime groups. According to NRF’s fifth annual Organized Retail Crime survey, nine out of ten retailers (92%) report that their companies were victims of organized retail crime during the past year, up eight percent from 2008. Nearly three-fourths (73%) of retailers also reported the level of organized retail crime activity has increased over the past 12 months, an increase of 11 percent from 2008. Loss prevention executives from 115 companies, including department, discount, drug, grocery, restaurant and specialty retailers, completed the survey last month.

“The unfortunate economic events of the past year have played an intricate role in how criminals continue to rip off the retail industry,” said Joe LaRocca, NRF Senior Asset Protection Advisor. “Organized retail crime rings have realized that tough economic times present new business opportunities by stealing valuable items from retailers and turning around to sell the merchandise to consumers looking for bargains.”

Even with the economy forcing retailers to cut staff and do more with less, 42 percent of retailers say their company is allocating additional resources to address organized retail crime. According to the survey, the average retailer spends approximately $215,000 annually just on labor costs to fight organized retail crime. Some retailers surveyed spend far more, with six percent of respondents spending more than $1 million dollars a year to employ loss prevention executives devoted to organized retail crime.

The fight against organized retail crime would be futile without the support of top management. According to the survey, nearly half (49%) of respondents believe senior management in their company understands the seriousness of the issue. For the first time in the survey’s history, NRF also asked loss prevention executives whether they felt law enforcement had a firm grasp on the issue; 38 percent agreed that police officers, detectives and federal law enforcement understood the complexity and severity of organized retail crime.

Thanks to the new partnerships formed with Federal and local law enforcement officials, retailers have had some success identifying stolen merchandise or gift cards at physical fence locations such as pawn shops and temporary stores (60%) and through online e-fencing operations (60%), where stolen merchandise is sold through online auction sites.

Organized retail crime is not only an isolated problem in a handful of areas across the country. According to the survey, a staggering 72 percent of retailers have identified organized retail crime syndicates who are exporting goods outside of the U.S. or across state lines. Additionally, 28 percent found that criminal groups under current investigation have connections to street gangs with international connections.

When asked how they would rank organized retail crime as a threat to their company, nearly one-third (29%) of retailers gave organized retail crime a “four” or “five” rating, identifying the problem as severe or significant. On average, retailers gave organized retail crime a rating of 2.87 on a five-point scale.

NRF will address organized retail crime and many other loss prevention issues such as return fraud and counterfeiting at its annual Loss Prevention Conference and EXPO at the Los Angeles Convention Center, June 15-17. Law enforcement officials and retailers are eligible for complimentary EXPO Hall passes. Visit NRF’s LP Conference website for more information.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

(Press release courtesy of the National Retail Federation, www.nrf.com)