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Yesterday's Hearing on Organized Retail Crime

House Subcommittee Hears Testimony About Growing Threat of ORC
Kansas AG Kris Kobach testifies about retail theft at Washington hearing
Attorney General Kris Kobach testified about Kansas retail theft Tuesday in Washington, D.C., during a U.S. House Subcommittee on Crime and Federal Government Surveillance hearing.

Kobach claimed Kansas is in the top 10 states hit by organized retail crime in terms of money lost. He highlighted cases such as the owner of a Kansas City, Missouri, pawn shop pleading guilty in March to gathering items stolen from retailers and reselling them online.

"You typically see box stores being hit two to three times per week," Kobach said. "The fence at the center is usually, in Kansas, is usually a pawnshop. But oftentimes, it's just a warehouse that's used to move the goods. Almost all of the products are sold online."

The hearing about a rise in organized retail crime and the threat to public safety began with an opening statement Rep. Andy Biggs, chairman of the subcommittee and an Arizona Republican, who said he was disappointed he needed to hold the hearing.

"We are coddling criminals and (fanning) the flames of this problem, and it's open season on our stores, and criminal syndicates are taking advantage," Biggs said.

Kobach listed factors in the legal system that worsen the problem, including a lack of prosecutorial capacity, the threshold amount that must be stolen in order to prosecute the theft, investigative capacity, bail being set too low and the speed at which suspects are released.

Wisconsin Republican Rep. Thomas Tiffany asked Kobach if he believed the lawlessness of the country and the "defund the police" movement contributed to the problem. "I do, sir," Kobach said. "And there's, at the end of my comments I briefly noted on this, is there's a cultural element here, too. It's a lack of respect for the rule of law. And it gets to a point in certain areas where people feel like shoplifting is accepted, or at least tolerated, or nothing's being done about it."

John Milhiser, a former U.S. attorney, and John Flynn, president of the National District Attorneys Association, also spoke about organized retail crime at the hearing. Lorie Mohs testified as well. Her son, Blake Mohs, died in April during the theft of a phone charger from the California Home Depot where he worked as a guard. kansasreflector.com


Business Community Applauds ORC Hearing
'Thank you ... for your attention to this "national crisis.'

U.S. Chamber Letter on the hearing, "The Rise in Organized Retail Crime and the Threat to Public Safety"

This Hill letter was sent to the Members of the House Committee on the Judiciary's Subcommittee on Crime and Federal Government Surveillance, on the hearing, "The Rise in Organized Retail Crime and the Threat to Public Safety."

Dear Chairman Biggs and Ranking Member Jackson Lee: Thank you for scheduling the hearing on, "The Rise in Organized Retail Crime and the Threat to Public Safety," and for your attention to this "national crisis."

Last year, Congress took an important step on this issue by approving the INFORM Act, which aimed to close off online markets for stolen goods by establishing verification requirements for third party online marketplace sellers. In addition to the efforts in your Committee this Congress, Senator Grassley's Combating Organized Retail Crime Act of 2023 (S. 140), which would establish a coordinated multi-agency response to organized retail crime and would create new tools to tackle evolving trends in organized retail theft is a positive federal response.

At the state level, there has been significant progress with 34 state laws increasing penalties and enforcement including in:

• Virginia, which passed a law to make organized retail theft a felony and make those convicted of the crime eligible for prison sentences of up to 20 years

• Georgia, which sought to make it more difficult for organized gangs to sell stolen goods online

• Minnesota, which created a separate offense for organized retail theft with a possible sentence of 15 years depending on the value of the good stolen

• Oregon, which passed a law allowing for prosecutors to combine organized retail crime offenses happening across jurisdictions

• North Carolina, which made a felony of organized retail crimes that result in $1,500 or more in damage.

This is an outstanding foundation to build on but sustained effort in all 50 states is needed to ensure that no jurisdiction is a safe haven for these organized criminal operations.  uschamber.com


Lowe's 'Project Unlock' Highlighted at NRF PROTECT 2023
Lowe has seen a 180% increase in acts of violence against associates & customers since 2020

How Lowe's uses collaboration and tech to battle theft

NRF PROTECT: Tap into individual expertise and collective thought leadership to create new asset protection tools and strategies

Lowe's Innovation Labs and Asset Protection teams are collaborating on the next big idea in asset protection and loss prevention - Project Unlock.

Vice President of Asset Protection and Safety Scott Draher, Vice President of Lowe's Innovation Labs Cheryl Friedman and Senior Director of AP Operations Luke Moeller discussed the early-stage project during a presentation at the NRF PROTECT conference and expo in Grapevine, Texas.

Project Unlock is designed to tackle the theft of powered products - in Lowe's case, power tools - in a way that is virtually invisible to retail customers. Products are embedded with an RFID chip and are set to inoperable. When the item is purchased at a store register with a point-of-sale RFID scanner, the item is unlocked and ready to use, ensuring that only legitimately purchased products are activated. If it's stolen or not unlocked, the product won't work.

In addition, the product and box barcode are embedded with a unique serial number so the transaction is recorded on the blockchain. That allows vendors, resellers and law enforcement to quickly verify the item was legally purchased.

Project Unlock is just one of many security and asset protections initiatives that have come about from collaboration among Lowe's Innovation Labs and Asset Protection teams.

Lowe's has seen a 180% increase in acts of violence against associates and customers in stores since 2020 and a 77% increase in weapons-related incidents over the last year, Draher noted. Criminals are becoming more brazen, he said.

In response, Lowe's has put in place several security solutions to keep people and products safe from criminals, creating a full-organization, collaborative ecosystem to detect, deter and respond to thefts and violence.

The outside of each store has robot parking lot patrols, security towers, integrated CCTV and camera platforms that use analytics to identify vehicles, not just plates. Vehicle analytics has been particularly useful, Moeller said: Within the first 60 days of deploying the technology, the AP team was able to close 478 active cases. nrf.com


Dollar Tree Warns of Store Closures, Price Hikes & More to Combat Theft
Dollar Tree warns it could follow Walmart and CVS with major store change in 'defensive' strategy

Discount retailer is concerned about a rise in crime in stores

In a post-earnings call with analysts, Dollar Tree Chief Financial Officer Jeff Davis said the company may be instituting what they call "defensive merchandising" to discourage theft, according to reporting by the U.S. Sun.

On the call, Davis said he defines defensive merchandising as any steps taken to prevent in-store theft. Davis said Dollar Tree aims to "improve our performance on shrink through defensive merchandising efforts, real estate optimization, and perhaps higher prices to compensate for areas of systematically higher shrink."

Target and Walgreens have both said they would take steps towards increasing measures around theft prevention in the coming months.

Walgreens recently opened a store specifically designed to prevent theft, with hardly any shoppable areas on the store floor. The store is located in Chicago's South Loop, an area that has experienced an uptick in crime. Walgreens has said the store could be a blueprint for other locations.

Davis added that Dollar Tree headquartered in Chesapeake, Va., is looking into real estate optimization and even higher prices to combat shrink inventory. Target CEO Brian Cornell said recently shrink inventory will cost the retailer over $1 billion this year alone.

"And we're taking all the appropriate steps that we can to control and mitigate this where we can."

Along with defensive merchandising, Dollar Tree said another way the issue can be resolved is by closing stores or local governments taking action. The warning by Dollar Tree came after the company missed earnings expectations from Wall Street. supermarketnews.com the-sun.com


Facial Recognition & Other Tech Can Help Prevent Crime
The Retail Threats That Impact the Safety of Retail Employees

As the retail landscape evolves, employees rely more on enhanced video surveillance and data analytics to prevent loss and boost productivity.

Detailing the trend, NRF notes that "the majority of retailers report that in-store, ecommerce and omnichannel fraud have risen." Violence is another a growing concern. In response, retailers have made addressing guest-on-associate violence, external theft and organized retail crime a priority, NRF says.

Enhanced Video Surveillance Improves the Employee Experience

One potential solution to deter this activity is OnView's real-time security system. Andy Szanger, director of strategic industries at CDW, recommends OnView for multiple uses in retail. "It's obviously deterring the nuisance crimes, but it's also helping with employee safety and customer experience," he says.

Enhanced video surveillance can also be used to prevent repeat offenses, alleviating stress on employees. Link Simpson, CDW's enhanced video surveillance practice lead, explains that facial matching can be used when a person commits crimes repeatedly, even across multiple locations. "By establishing that someone is a repeat offender, you're much more likely to get a response in terms of somebody showing up from the police department. OnView does that type of thing," he says.

Tech Tools Allow Employees to Improve the Customer Experience

While enhanced video surveillance and data analytics can allow employees to focus on providing good customer service, other tech tools can amplify those efforts. Automation allows store employees to spend less time on tasks such as inventory management and more time on providing the face-to-face service shoppers have come to expect from an in-store experience.

The rise of mobile devices and edge computing have given retailers access to real-time data that's extremely valuable when working with customers. According to Accenture, "Empowering retail workers with data means giving them actionable insight, which should look to augment their retail expertise, thereby helping them decide what activity would be most valuable at any given moment." biztechmagazine.com


Retailers in the Bay Area Fight Back Against Theft
Bay Area stores locking up more merchandise to combat theft
An increasing number of stores around the Bay Area are locking up merchandise as a way to combat a rise in organized retail crime.

From vacuums and cleaning products at Home Depot, to hard drives and headphones at Office Depot, to shaving cream and detergent at Target, big box retailers are putting more items behind plexiglass.

Retail theft isn't a new problem. It's happening all over the country. Recent surveys show San Francisco and Oakland are part of the five top metropolitan areas being targeted.

Home Depot said high-risk products will always have multiple levels of security. In a statement, Target sad aside from increasing security, the retail giant is also working with lawmakers to address the rise in crime.

"Theft and organized retail crime are urgent issues that are increasingly impacting the team and guests...limiting product availability, creating a less convenient shopping experience and putting our team and guests in harm's way. We will do everything in our power to continue to keep our stores open," Target stated. nbcbayarea.com


Shoppers Respond to the Retail Theft Crackdown
Walmart worker enforces new anti-theft 'clip' measure - but shopper says it will lose them hundreds
A Walmart employee has been spotted locking up items with security clips in a bid to combat theft. But, the measure designed to tackle shoplifting has been slammed online by shoppers.

Walmart execs have blasted the impact of theft on customers and its stores and have resorted to introducing a raft of measures. In a viral video, a Walmart staffer placed a clip on the pegs holding e.l.f cosmetic products.

The clips are designed to prevent shoppers from sliding products off a peg without the peg's removal. Shoppers are required to ask a staffer to open the peg. But, the anti-theft measure has been ridiculed by viewers.

One shopper said she struggles to find a staffer whenever she needs someone to unlock the security tag. Another influencer said she would not shop at Target if required to ask someone to unlock an item. the-sun.com


Shoplifting Is Getting Worse. Retailers Are Fighting Back.

Virginia State Police releases 2022 crime report

San Francisco's Retail Exodus Continues
Westfield is handing over the keys to San Francisco Centre mall
After more than two decades operating San Francisco Centre, Westfield is handing over the mall's keys to its lender, a spokesperson for shopping center operator Unibail-Rodamco-Westfield said by email Tuesday.

Annual sales at the mall plummeted from $455 million in 2019 to $298 million in 2022, per the email. In that time, sales at Westfield's Valley Fair mall in nearby San Jose rose 66% and the company's overall U.S. flagship sales rose 23%.

Also in that time, foot traffic declined 43% to 5.6 million visits from 9.7 million, while the U.S. portfolio saw a 98% recovery. Occupancy also fell some 55% - including the recent closures of Nordstrom and Banana Republic - while the portfolio averages about 93%, the spokesperson said.

In its statement, Westfield said that in the past 20 years operating San Francisco Centre, it has been "investing significantly over that time in the vitality of the property."

"Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward," according to the statement. The action has no impact on the rest of URW's debt, the company also said.  retaildive.com


The Push to Bring Employees Back to Work
Should Companies Order Workers Back to The Office?
Google has joined Amazon.com, Apple, The Walt Disney Company and others that have announced plans to more strictly enforce or add restrictions to their hybrid work policies. As of April 2022, most Google employees are expected in offices at least three days a week.

At Amazon, tensions boiled over on May 28 as hundreds of office workers staged a walkout over a three-day office return mandate. In a memo from February 17, Andy Jassy, Amazon's CEO, wrote that in-person work fosters culture building, learning, collaboration and innovation.

Meta, in late May, notified employees they would be required to be in the office three days a week starting in September, its strictest remote work policy change since the novel coronavirus pandemic outbreak.

JPMorgan, Microsoft, Walmart, Salesforce, Starbucks, Twitter, Chipotle, Citigroup and IBM are among others recently mandating in-office attendance at least some days of the week.

Unispace's "Returning for Good" global survey taken in April found 72 percent of companies have mandated office returns, but 74 percent are struggling to keep their employees happy, 42 percent report a higher level of employee attrition than anticipated, and 29 percent are struggling to recruit altogether. retailwire.com
 

Despite Cuts, Walmart Looks to Disrupt the Retail Industry
Walmart Has a New Way to Change the Future of Retail

The company wants to develop tech startups that might disrupt the entire industry.

Walmart (WMT) has been laying off thousands of workers, closing stores, and jettisoning assets to cut costs and preserve profits. Like many retailers, the company faces an uncertain economy marked by inflation and wary consumers.

But Walmart is still finding the time and resources to invest for the future. The company recently announced that it is creating an accelerator program for startups developing emerging technologies like the metaverse, artificial intelligence, and blockchain.

Walmart Store No. 8, a tech incubator the company created in 2017, will partner with Outlier Ventures to provide funding and mentorship to selected startups.

Retailers have long been enamored with the idea of investing and developing startups that could give them a head start with technologies that could transform the industry. However, such programs, though they look good on paper, have a decidedly mixed track record. For one thing, companies often find it difficult to apply new innovations to big corporate cultures invested in the status quo and thus resistant to change. thestreet.com


The Feds Change the Definition of an Employee (Again)
Labor Board, Reversing Trump-Era Ruling, Widens Definition of Employee

The National Labor Relations Board, with a Democratic majority, restored a standard that counts more workers as employees rather than contractors.

Labor regulators issued a ruling on Tuesday that makes it more likely for workers to be considered employees rather than contractors under federal law.

Overturning a ruling issued when the board was under Republican control, the decision effectively increases the number of workers - like drivers, construction workers or janitors - who have a federally protected right to unionize or take other collective action, such as protesting unsafe working conditions.

The ruling ensures that "workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections," said a statement by Lauren McFerran, the Democratic chairman of the labor board, which voted 3 to 1 along party lines to broaden the standard. nytimes.com


Man sues Portland store, alleges he was racially targeted in false shoplifting allegations
Nguyen Cao said he was inside the fisherman supply store he frequented in January when a manager he did not recognize approached and accused him of stealing. Video shows a security guard threatening to "put (him) on the ground."

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In Case You Missed It

RCC's 2023 Excellence in Retailing Awards: Winners Announced

Remarkable Innovativeness and Intense Competition Spotlights 2023 Winners

Retailers across Canada have once again showcased their remarkable innovativeness and leadership, raising the bar for excellence in the retail industry.

The competition for the highly coveted Excellence in Retailing Awards reached new heights this year, with an unprecedented 88 finalists contending for the top honors. The 15 winners of these prestigious awards were unveiled last night at the Excellence in Retailing Awards Gala, held as a highlight of Retail Council of Canada's (RCC) STORE 2023 Conference in Toronto. Adding to the excitement of the evening was also the presentation of three Awards of Distinctions, and eighteen Retail Education scholarships.

The outstanding innovations recognized this year reflect the retail industry's proactive response to current challenges. From prioritizing employee mental and physical well-being, to revolutionizing store design for enhanced customer experiences, embracing sustainable practices, reinforcing loss prevention measures, and actively engaging in philanthropic initiatives to support communities, these remarkable achievements have pushed the boundaries of retail excellence.

The winners of the 2023 Excellence in Retailing Awards are:

Learn more here