Organized retail crime (ORC) is growing in both scope and complexity, according to a new report from the National Retail Federation. The world’s largest retail trade association conducted the report, “Organized Retail Crime: An Assessment of a Persistent and Growing Threat” in partnership with global risk advisory firm K2 Integrity, a global risk advisory firm.
“Organized retail crime has been a major concern for the retail industry for decades, endangering store employees and customers, disrupting store operations, and inflicting billions in financial loss for retailers and the communities they serve,” noted Matthew Shay, president and CEO of Washington, D.C.-based NRF. “These concerns have grown in recent years as criminal groups have become more brazen and violent in their tactics and are using new channels to resell stolen goods. NRF and its members have been forcefully advocating for the Combating Organized Retail Crime Act in Congress because it’s time for decisive action, not just platitudes and endless debate.”
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Introduced earlier this year by Sens. Chuck Grassley, R-Iowa, and Catherine Cortez-Masto, D-Nevada, the bipartisan legislation would establish a coordinated multi-agency response and create new tools to address evolving trends in organized retail crime. Companion legislation has also been introduced in the U.S. House of Representatives.
The NRF-K2 Integrity report offers a detailed assessment of U.S.-based ORC groups, their tactics and techniques for theft and resale, and their connections to other types of organized crime, as well as identifying critical gaps in the current understanding of ORC.
Among the report’s key findings:
- ORC groups mainly target everyday consumer goods, which offer a favorable balance between ease of theft, monetary value and ease of resale. Just 11% of the ORC groups featured in the report targeted luxury goods.
- The median ORC fencing operation handled approximately $250,000 in stolen merchandise before being apprehended by law enforcement.
- ORC fencing operations depend on online marketplaces as one resale channel. About 45% of ORC groups for which fencing information was available used online marketplaces for their resale operations.
- ORC fences that conduct online resale operations seem to be moving away from third-party online sellers and toward peer-to-peer websites that facilitate direct engagement among buyers and sellers.
- ORC groups plan in advance to ensure the success of their theft operations.
- Significant deficiencies exist in the availability of consistent, consolidated data on ORC across national, state and local authorities, as well as the retail industry.
“Organized retail crime is growing as a real threat to the safety, operations and bottom line of retailers across the nation and now forms a part of the criminal and illicit financing landscape,” said Juan Zarate, global co-managing partner and chief strategy officer at K2 Integrity, which has offices in London; Washington, D.C.; Abu Dhabi; Doha; Geneva; Los Angeles; Miami; and Chicago. “The ORC industry will grow more dangerous, complex and profitable, and its illicit proceeds will fuel more organized criminal networks and operations in the United States, globally and virtually, if more concerted action is not taken to disrupt these trends. We are proud of the role we played in developing an assessment of ORC and look forward to our continued partnership with NRF.”
Commissioned by NRF in 2022 to provide an assessment of ORC and provide information on its threats and trends, the K2 Integrity team interviewed dozens of retail security and law enforcement professionals, examined the details of 130-plus ORC, cases and conducted research on court cases, industry reports and media reports on ORC over the previous decade.