'Organized Retail Crime: An Assessment of a Persistent and Growing Threat'

New NRF Report Details ORC's 'Persistent & Growing Threat'
NRF Report Shows ORC a Growing Threat for U.S. Retailers

WASHINGTON, April 13, 2023 – Organized retail crime (ORC) is a perpetual and burgeoning problem for the U.S. retail industry, and evidence suggests it is growing in both scope and complexity, according to a new report released today by the National Retail Federation. The report, Organized Retail Crime: An Assessment of a Persistent and Growing Threat, was conducted in partnership with 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,” said NRF President and CEO Matthew Shay. “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.”

Key findings in the report include:

• ORC groups largely target everyday consumer goods — which offer a favorable balance between ease of theft, monetary value and ease of resale. Only 11% of the ORC groups examined in the report targeted luxury goods.

• The median ORC fencing operation handled about $250,000 in stolen merchandise prior to being apprehended by law enforcement.

• ORC fencing operations rely on online marketplaces as one resale channel. About 45% of ORC groups for which fencing information was available used online marketplaces for resale operations.

• ORC fences that conduct online resale operations appear to be shifting away from third-party online sellers and toward peer-to-peer websites that facilitate direct engagement among buyers and sellers.

• ORC groups rely on advance planning to ensure the success of their theft operations.

• There are significant deficiencies in the availability of consistent and consolidated data regarding 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. “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.”

Click here to view the full report | View the full press release here

Snapshot from the Report: The ORC Cycle & Its Perpetrators

The key distinguishing features of ORC are centralized coordination of operations, and division of labor and specialization across the various steps of the ORC cycle (Figure 1 ) — from the theft of goods through the laundering of proceeds generated from the resale of stolen merchandise.

Shoplifting's Negative Impact on Retail Employees
“Employees may feel a sense of paranoia if the store has a shoplifting issue."

Is Shoplifting Killing Store Morale?
A university study finds mandatory policing of shoplifting and other “customer deviant behavior” often produces strong negative emotions in retail associates, leading to perceptions of unfairness and increased turnover.

Research from Florida Atlantic University and three other schools based on a series of in-depth interviews, three experiments and a survey found:

• Employees expect managers to be more active in guarding the store.

• More than a quarter of respondents don’t know their employers’ policies for guarding the store.

“Front-line employees [FLE] are being asked to do too much, policing the misbehavior and confronting shoplifters, often without extra money or training,” said Melanie Lorenz, Ph.D., an associate marketing professor at Florida Atlantic University’s College of Business.

David Johnston, VP, asset protection and retail operations at the National Retail Federation, in a recent blog entry, said shoplifting and retail theft had reached an “epidemic level,” with “brazen” thieves openly stealing and stores closing or shortening hours to avoid theft.

Most retailers have a policy against associates chasing or physically confronting suspected shoplifters. The approach is intended to protect the safety of associates and avoid the risk of racially profiling innocent shoppers.

In a Houston Chronicle article exploring shoplifting’s impact, Neil Kokemuller writes, “Employees may feel a sense of paranoia if they constantly hear the store has a shoplifting issue. The negative measures taken to deter shoplifting can impede employee instincts toward a positive and welcoming attitude with customers. Employees also may become overly suspicious of customers and get overzealous in their efforts to protect the store’s inventory.”

A Harlem View article also noted that shoplifting makes staff uncomfortable. Nejah, an associate at a Harlem pharmacy who declined to give his last name, said, “Retail or working somewhere where you have to worry about shoplifting is definitely a crazy experience.”  retailwire.com


AP/LP's Evolving Role Amid Retail's Crime Surge
Asset protection’s role is evolving in retail. Here are 5 things for grocers to know.

This shift to focusing on the holistic protection of people, profits, property and brand has sped up as heightened stress brought on by the pandemic has increased the risk for violence.

Once focused mainly on loss prevention, asset protection has taken on a broader range of potential threats and issues for grocers, with that shift accelerating during the pandemic, according to the Food Industry Association.

In some cases, grocers’ asset protection teams are working more closely with operations teams to reduce shrink beyond theft, said Doug Baker, vice president of industry relations at FMI. Disasters, such as fires and floods, civil unrest and cyberattacks, are blending into the realm of asset protection.

“One of the things I’m starting to see is not only this move from loss prevention to asset protection but this idea that risk management is the umbrella under which all of these security-type positions fall,” Baker said.

This shift to concentrate on the holistic protection of people, profits, property and brand has sped up as heightened stress brought on by the pandemic has increased the risk for violence. In addition, felony theft thresholds increased in dozens of states prior to the pandemic.

Theft in specific departments

Store items are not typically stolen because of their dollar value, but rather for their ability to be resold, FMI noted. Certain areas of the store also were cited as needing to be watched because they attract crime. Surveyed respondents said they focus heavily on the outer perimeter and parking lot as well as checkout areas. Behind the scenes, grocery stores’ receiving and front end, generator and electrical rooms as well as the cash office must be monitored closely.

Growing collaboration

Many grocers have enlisted the help of third-party companies to help combat theft if they do not have the bandwidth to build those teams internally, Baker said. This help comes in the form of anti-theft technology as well as professional investigators.

Computer vision leading tech innovation - Keep an eye on internal theft - Future opportunities: grocerydive.com


Another State Rolls Out ORC Legislation
SB 206: Alabama Senate Introduces Organized Retail Theft Bill
Relating to crimes and offenses; to create the Retail Theft Crime Prevention Act; to provide for the crime of retail theft in various degrees; to provide for the crime of organized retail theft; to provide criminal penalties for a violation; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Section 111.05 of the Constitution of Alabama of 2022. (Judiciary) fastdemocracy.com


Crime & Drugs Running Rampant in San Francisco - Forcing Closures
Man died from overdose at S.F. Whole Foods months before closure
Seven months before Whole Foods abruptly closed at Trinity Place in San Francisco’s troubled Mid-Market neighborhood, a man overdosed from fentanyl and methamphetamine and died in the grocery store’s bathroom. The 30-year-old man died on the evening of Sept. 20, 2022, from the lethal combination of drugs, according to the San Francisco Medical Examiner’s office.

Whole Foods cited the safety of workers as the reason for the temporary closure, but the company has not provided details of incidents and did not immediately respond to a request for comment on Wednesday. Supervisor Matt Dorsey, who lives in the neighborhood and shopped at the store, has said it was hit by “drug-related retail theft, adjacent drug markets, and the many safety issues related to them.” The store is across the street from U.N. Plaza, where drug dealing and use are commonplace.

Luke said he also witnessed numerous disturbing incidents, and that he wasn’t surprised by the store’s temporary closure on Monday, which was made to protect staff. About a month ago, Luke said a man began urinating in the store, alarming a staff member who told him to leave. The man replied that he wasn’t finished, Luke said.

In an apparent response to crime, the store cut its operating hours, closing at 7 p.m. instead of 9 p.m. It also began requiring a proof of purchase to use the bathroom, Luke said.

Patrick Glenn, a Civic Center resident who visited the store around 10 times, said a “small army” of security guards would often tell people to remove products from their pockets.

“Every single time I was there, security was having some sort of confrontation with a homeless person or someone who seemed to be crazy,” he said. sfchronicle.com

   San Franciscans say they feel less safe than in 20+ years, city survey shows


Why the plan to build new supervised consumption sites in S.F. may have just died in the water
San Francisco City Attorney David Chiu plans to prevent that money from being used for the sites over fear of legal ramifications. As the city attorney must sign off on every contract, she and the nonprofits claim Chiu is single-handedly blocking the sites from opening.

In August of last year, Gov. Gavin Newsom vetoed SB57, a bill to permit drug overdose prevention and supervised consumption sites to open in the state. sfchronicle.com


Theft & Security Issues Pushing Retailers Out of Big Cities
Walmart announced Tuesday that the company is closing four stores in Chicago.

A retail expert spoke with ABC7 about why some big box stores can't turn a profit in urban areas.

Walmart announced four other Chicago locations are closing on Sunday, including a superstore in Chatham and three neighborhood markets in East Lakeview, Little Village and Bronzeville. Lack of profits, theft and security issues are some of the reasons behind the decision.

"Instead of looking at the bottom line, I think these retailers need to focus on where did they drop the ball," said Donnavieve Smith, associate professor of marketing at North Central College.

Ald. Mitts said communication between corporate executives, the community and the store is vital to keep these locations open. After Walmart reopened stores following looting in 2020, Mitt's said her store and others have been hanging on like a thread.

"It's not a loss we want to have in our ward, so we will do whatever we need to do to to make it work, whether it's coming up with a new vision or working on vision already in place," said Dr. Elizabeth Lockhart, with the 37th Ward executive committee.

From a veteran alderman to a new one, Ald. Mitts said Mosley shouldn't give up on keeping the Walmart in his ward open. She suggests meeting with Walmart executives first and if that doesn't work, make some noise with protests. abc7chicago.com


Opinion: The crime in America is out of control

Derby PD chief weighs in as local retailers deal with more theft than ever

NYC Embracing Biometrics - Including Facial Recognition
Aggressive automation stance in NY pays off for vendors

New York City’s mayor has a message for companies selling technology that might help crime rates to continue to fall: Welcome.

Anyone opposing biometric surveillance, four-legged drones and vehicle tagging are not being asked to leave by Mayor Eric Adams, but they will not find an ally in City Hall. Adams this week set that tone that likely means hurdles to municipal use of facial recognition are being lowered, if not removed.

“If it wasn’t for our camera system that you see throughout the city, we would not have made the apprehensions on some of the most dangerous people in this city and state,” he said. AI is “allowing us to go even further.”

During a press conference hosted by Police Commissioner Keechant Sewell during which reporters met a couple dog-shaped, remotely controlled devices and a tagging mechanism designed to attach a GPS tag to suspects’ cars for less-dramatic chases.

Sewell compared the Hyundai/Boston Dynamics Digidog and egg-shaped Knightscope K5 ASR machines – neither of which will initially perform facial recognition tasks — to past innovations like horseback patrols and fingerprint biometrics. Adams compared them to 911 emergency services.

The mayor, who habitually identifies himself as a technology geek, implied that his predecessor put the city’s safety at risk after “a few loud people” in 2021 complained about a pilot using some of the machines.

“That is not how I operate,” Adams said, leaving the impression that he will shovel mechanical watchdogs onto city streets if they prevent or solve crime.

“This is the beginning of a series of roll outs,” according to Adams. biometricupdate.com


Lawmakers Take On Major Retailers Over Child Labor
Senators press major retailers, brands on child labor in supply chains

Sens. Alex Padilla and John Hickenlooper questioned Walmart, Target, J. Crew and others about compliance practices after reports of exploitation in the U.S.

Two senators are asking 27 major U.S. companies about the use of child labor in their supply chains following recent media investigations into exploited migrant children.

Sen. Alex Padilla, chair of a subcommittee on immigration, and John Hickenlooper, chair of a subcommittee on workplace safety, asked some of the largest U.S. companies how they vet their contractors and train their own employees to prevent child labor violations.

The senators addressed their April 5 letter to the CEOs of Walmart, Target, PepsiCo, Frito Lay, J. Crew, Whole Foods, General Mills, Ben & Jerry’s, Ford and General Motors, among others named in a New York Times report on migrant child laborers working for major companies or their contractors.

The letter posed six questions directly to the companies regarding their corporate practices and vetting of contractors. The Senate leaders asked for responses by April 26.

“We ask that you carefully examine your hiring procedures, workplace safety, and compliance with wage and hour laws as they apply to minors,” the senators wrote. “Your staff must be trained, and retrained if necessary, on federal and state child labor laws to ensure that children are not being placed in harm’s way, and employees must have the opportunity to report unfair labor practices without risk or fear of retaliation.” retaildive.com


LVMH CEO, World's Richest Man, Has Become 'Lightning Rod' For Protesters
Executive Protection Becomes High Priority & Challenge

LVMH’s Paris Headquarters Stormed by Protesters
PARIS—Protesters stormed the headquarters of luxury conglomerate LVMH Moët Hennessy Louis Vuitton SE on Thursday as the nationwide protest movement against President Emmanuel Macron’s pension overhaul morphed into a populist rebuke of France’s establishment.

Video footage captured a crowd of men waving flares and banners as they forced their way through the entrance of the luxury group’s headquarters on Paris’s tony Avenue Montaigne. Another video clip shows the crowd proceeding up an escalator to a reception area that leads to higher floors where LVMH Chief Executive Bernard Arnault, the world’s richest man, has offices along with other top executives.

People at the headquarters said the intruders didn’t stay in the building for long. Protesters had cleared out of the area by the early afternoon.

Weekly protests have raged across France for months as Mr. Macron has forged ahead with plans to raise the country’s retirement age to 64 from 62 by 2030.

Mr. Macron's wife, Brigitte Macron, is well-known for donning Louis Vuitton outfits during state visits and other public appearances

Mr. Arnault has become a lightning rod since the protests began in January, with protesters carrying mock wanted posters featuring his face and exhorting him and other billionaires to do more for the common good. Protesters filing into LVMH’s headquarters on Thursday chanted, “There is money in the pockets of billionaires.” wsj.com


Urban America's Challenges Have Just Begun
Crime may continue to surge.

Two million people fled America’s big cities from 2020 to 2022
Two million people fled America’s largest cities from 2020 to 2022, new research shows, signaling that a retreat from urban centers to suburbs, exurbs and smaller cities in the early months of the pandemic has hardened into an enduring and potentially worrisome trend.

More than 1.2 million people left the nation’s large urban counties between July 2020 and July 2021, according to a report published this month by the Economic Innovation Group, a bipartisan public policy organization. Another 860,000 people departed between July 2021 and July 2022.

Only a fresh influx of immigrants saved big cities from dramatic population declines. Even with the immigrants, 17 of the nation’s 25 largest counties suffered population losses between April 2020 and July 2022, according to census data tabulated by The Hill.

The historic exodus, combined with chronic office vacancies and surging crime, pose profound and potentially existential challenges to America’s great cities.

In 10 of the largest U.S. cities, half of all offices sit empty, according to weekly data from Kastle Systems, a company that manages office-access security.

The virtual work exodus comes at a time when urban crime rates are rising, invoking memories of a much worse urban crime problem in the last millennium.

One large-scale survey, published last year, found that 19 million Americans planned to move because of remote work, vastly outnumbering the 4 million Americans who had already moved.

“It’s not big cities in general. It’s a very small number of extremely large cities,” Fowler said. “What you see is that migration is moving down the urban hierarchy,” from larger cities to smaller ones.

The challenge for city leaders, urban experts say, is to adapt to remote work: by converting empty offices to affordable housing, by managing public safety in struggling neighborhoods, and by working with public schools to preserve tax-funded education as a viable option for urban parents. thehill.com


'MD. becomes national leader in standardizing licensing, vetting & training of security guards'
Bill to bolster security guard oversight in Maryland heads to governor’s desk for final approval
Most security guards in Maryland now will have to be trained, licensed by the state and covered by insurance, under legislation passed in the final hours of the legislative session Monday night.

As things stand, only guards who work for private security companies in Maryland are required to have licenses issued by state police. If a guard is employed directly by a non-security business, like a grocery store, they don’t have a state-issued “guard card.” The state has not required training for guards, regardless of their employer, and hasn’t tracked when they use force against people at work.

Sponsored by Sen. Jill Carter, a Democrat from Baltimore, the legislation passed Monday establishes training requirements for private security and mandates guards or their employers report to the state when they use force, bringing Maryland closer to having universal standards for people who work in the police-adjacent industry.

Senate Bill 760 now heads to the desk of Democratic Gov. Wes Moore, who can sign the legislation into law, let it go into effect without his signature, or veto it.

Amitay highlighted bill provisions that require use of force and de-escalation training for all guards and mandate that all guards — not just those working for security companies — undergo FBI fingerprint-based background checks before working.

“With the passage of this bill, Maryland becomes a national leader in standardizing licensing, vetting and training of security guards, which will benefit all Maryland residents,” Amitay said.

MD Senate Bill 760 Enrolled Bill baltimoresun.com


Consumers Pull Back Retail Spending for 2nd Straight Month
Retail sales declined in March as consumers cut back spending
Consumers pulled back on spending at retail stores for the second straight month, causing retail sales to fall 1% in March, the Commerce Department said on Friday. The strong consumer spending that has long underpinned the economy is fading.

The biggest spending drop-off last month was at gas stations, where retail sales fell sharply by 5.5% last month, helping drag down the overall figure. That decline may be a reflection of cheaper gas since the data is not adjusted for inflation.

Even after stripping out gas stations, retail sales fell 0.6% — a notable decline after February's 0.2% drop. That is the result of less spending across a broad range of retail categories, including stores that sell building supplies (-2.1%), electronics (-2.1%), and clothing (-1.7%).

The bottom line: The data sends a worrying signal about the health of the consumer, which has been a consistent bright spot for the economy. axios.com


7-Eleven looks to hire 50K employees this month

Manhattan Retail Rents Are Up 8% As Luxury Brands Boost Recovery

UK: British economy stalls as strikes offset retail growth
 

Senior LP & AP Jobs Market

Manager of Supply Chain, Asset Protection job posted for Burlington Stores in Burlington, New Jersey
The Manger of Supply Chain Asset Protection supports both shortage and overall company objectives by managing Asset Protection activities in Burlington’s supply chain network. This role works closely with field AP teams and the Investigations team to identify and resolve theft cases that originate out of Burlington DCs and Pool Point locations across the network. Develops and maintains a strong partnership with DC AP teams, DC Inventory Control, Logistics, and DC Operations. burlingtonstores.jobs