Retail Theft Hikes Tied to Poor Economy: Study

The Current Crime Trends Survey, released this week by the Retail Industry Leaders Association (RILA), has found evidence that crimes against retailers are rising in correlation with the sinking economy.

The survey gathers observations from 52 of the largest and fastest-growing retailers in the United States, running the gamut from grocery, drug store, and mass merchant to specialty apparel, electronics and appliances, and fabric and craft retail. Focusing on the time period associated with the current economic downturn, the survey sought to identify corresponding trends in illegal activity.

According to the report, crimes of opportunity as well as more sophisticated organized retail crime (ORC) are increasing across all retail segments.

Among the key findings: 84 percent of respondents report an increase in theft/amateur shoplifting, 76 percent say they've seen an increase in financial fraud, 80 percent note increases in organized retail crime, and 77 percent of specialty retailers say they've experienced increases in ORC.

"The current uptick in unlawful activity is an unfortunate, yet unsurprising, consequence of an economy in distress," said RILA v.p. asset protection Paul Jones.

Retailers report alarming rises in such activity in regions not typically prone to such increases. Complex cities and highly urbanized areas are often the first to display increases in unlawful activity, but the survey shows that increases have penetrated beyond these regions and into a number of nontraditional and rural locales.

Retailers say that they're working hard to reverse these trends by improving their operations, resource allocation, and capital spending. Additionally, retailers continue to build strong partnerships with law enforcement and work with state and federal legislators on solutions.

According to The Global Retail Theft Barometer, put out by the Center for Retail Research, U.S. retailers spent $11.799 billion last year on loss prevention efforts.

Reported rises in organized retail crime (ORC) spotlight a potential long-term issue. ORC involves sophisticated crime rings that steal and stockpile large amounts of merchandise that they then sell to often unwitting buyers through flea markets, swap meets, pawn shops and, increasingly, Internet auction sites.

In contrast simple shoplifting or other crimes of opportunity, ORC growth attributed to a down economy is less likely to decline as the economy improves. The criminal enterprises related to ORC depend on the revenue derived from the commission of such crimes, and so will likely continue to commit them even as the economy improves. The increase in ORC is especially troubling, as these criminal enterprises frequently use the proceeds derived from ORC to fund additional crimes.

The survey identifies collaboration and continued partnership with law enforcement as crucial ways to fight these increases. Also cited are the ongoing efforts of the Coalition Against Organized Retail Crime to enact federal ORC legislation to curb this activity.

Arlington, Va.-based RILA's members include retailers, product manufacturers, and service suppliers--which together provide millions of jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
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