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85 Percent of Retailers Surveyed Have Been Victims of Organized Retail Crime: NRF

As organized retail crime continues to plague supermarkets and other retailers, companies are getting more serious about uncovering, dismantling, and prosecuting the responsible individuals and crime rings, according to the National Retail Federation's "2008 Organized Retail Crime" report released yesterday. In total, 85 percent of retailers surveyed said they had been victims of organized retail crime activity within the last 12 months, vs. 79 percent in 2007, the survey said.

NRF found that two-thirds of retailers (68 percent) have identified or recovered stolen merchandise and/or gift cards from a fence location, up from 61 percent last year. Much of the stolen merchandise also ends up online, being sold through third-party auction sites, where crime rings can maintain anonymity. The report revealed that nearly two-thirds (63 percent) of retailers experienced an increase in e-fencing activity in the past 12 months.

"Law enforcement and retailers alike are fed up with organized retail crime rings and are stepping up efforts to stop them in their tracks," said NRF v.p. of loss prevention Joseph LaRocca. "The brazen and unethical behavior of organized retail crime suspects results in possible health risks for consumers, adds unnecessary fees to consumers' purchases, and funds criminal enterprises, including the mob and terrorist organizations around the world."

Another disturbing trend is that as urban stores crack down on organized retail crime, many of these criminals are moving to the suburbs, LaRocca said yesterday during a press briefing for the survey. "Smaller communities with upscale, brand-name goods are being targeted," he noted.

In slightly more positive news, the report found that of the retailers who have identified organized retail crime as a problem in their stores, fewer reported an increase in activity within the past 12 months (66 percent vs. 71 percent).

The methods retailers are using to go after these professional criminals include new camera technologies and specialized teams. Additionally, a growing number of retailers are using LERPnet, a tool created by the NRF, the Federal Bureau of Investigation, and other industry associations, which was designed to track patterned crimes and criminals through a secure national database that will allow retailers to share information through its unique Web-based design.

When it comes to how much retailers spend fighting organized retail crime each year, the survey found the average retailer spends approximately $230,000 per year on labor costs. Many larger retailers who are particularly affected by the problem can spend upwards of $1 million a year. According to the Federal Bureau of Investigation, organized retail crime accounts for as much as $30 billion in retail losses every year.

Fortunately, loss prevention professionals believe that company executives have begun to understand the impact that organized retail crime has on their bottom line, NRF found. According to the survey, 54 percent of loss prevention professionals feel their top management understands the complexity and seriousness of organized retail crime -- a sharp increase over the 39 percent who said their executives understood the severity of the issue in 2005, when the survey was first conducted.
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