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National Retail Security Survey - Help Us Quiet the Naysayers!

The retail industry continues to face increasingly alarming levels of crime, violence and loss, yet there are those who think differently because our industry doesn't have the numbers to "back it up."

For more than 30 years, the National Retail Security Survey has been our industry benchmark report - and this year may be our most critical year!

This year's survey has been sent out to more than 350 retail brands across various segments, via emails sent to LP/AP pyramid heads. The National Retail Federation and Loss Prevention Research Council have a goal of receiving at least 100 retailer submissions to help us provide support to the entire industry with the results. Help us achieve that goal!
 

The deadline for completing the survey has been extended to Friday, June 16, 2023.
 

Only through retailer participation can we provide the most representative results that show the true impact of theft, loss and concerns facing our industry. Now is the time for us to quiet the naysayers!

If for any reason your organization (check with your LP/AP leader) has not received a survey, or the link to the survey is not working, please contact David Johnston with the National Retail Federation or Cory Lowe with the Loss Prevention Research Council.
 

Industry Responds to Federal ORC Heading

ORC Hearing Underscores Importance of Enforcing INFORM Act
Washington urged to get tough on stolen and counterfeit goods sold online

Law enforcement, retailers and consumer groups urge lawmakers, regulators to protect consumers and communities

This week the U.S. House Judiciary Committee held a hearing, “The Rise in Organized Retail Crime and the Threat to Public Safety.” During the hearing, Kansas Attorney General Kris Kobach testified that “almost all of the stolen products moved by the fences are sold online.” It’s more validation from the law enforcement community of what retailers have been ringing the alarm about for years – the ability for bad actors to quickly and easily sell stolen goods via online marketplaces is a key spoke in the organized retail crime wheel.

With the INFORM Consumers Act set to take effect June 27, 2023, the industry is hopeful strong enforcement will serve as the appropriate deterrent to organized retail theft and help keep consumers and workers safe.

Enforcing the INFORM Consumers Act

The Buy Safe America Coalition (BSAC), which represents a diverse group of responsible retailers, consumer groups, manufacturers, intellectual property advocates and law enforcement officials, today sent a letter to the Federal Trade Commission (FTC) supporting the strong enforcement of the INFORM Consumers Act. The letter notes,

“Given the size of the problem, it should be no surprise that such a diverse group of industries and interests are singularly united in our belief that INFORM must be fully enforced by the FTC (and the state Attorneys General) to protect consumers and businesses from what has become a serious threat to consumers, honest businesses, and a fair and healthy marketplace.”

Prosecutors and Industry Partner

Transparency only helps if law enforcement uses it to bring high-impact offenders to justice. Bringing together prosecutors and retailers is essential to combatting organized retail crime and keeping our communities safe. RILA and the National District Attorneys Association (NDAA) announced a first-of-its-kind national partnership to facilitate information sharing and collaboration among the business community and law enforcement to identify criminal networks operating in communities.

Building on this partnership, RILA and NDAA recently announced a new pilot project to address the root drivers of habitual theft, violence, and other unlawful activity in and around retail establishments — mental health issues, substance use, homelessness, and other complex societal challenges. More on the Vibrant Communities Initiative here. rila.org


D.C. Retail Theft Hearing Continues to Make Headlines
Hill Hearing Spotlights Retail Theft’s Wide-Ranging Impact on Merchants, Communities Across the U.S.
The rise of organized retail theft has spared increased scrutiny on Capitol Hill. And Tuesday (June 13), at a hearing titled “The Rise in Organized Retail Crime and the Threat to Public Safety,” members of the House Subcommittee on Crime and Federal Government Surveillance heard details on just how pervasive the epidemic has become.

Billions of Dollars Lost Annually

In introducing the hearing, subcommittee chair Andy Biggs, R-Ariz., noted that “organized retail crime has become a growing problem over these past three years” and added that “it’s open season on our stores.”

During testimony before the subcommittee, Kris Kobach, attorney general for Kansas, said that his state has been among “the top 10 states hit” in terms of dollars stolen. He noted the “overlap” between the drug trade and organized retail theft. He recounted one case where a pawn shop operator employed four “boosters” who stole merchandise for him, and the stolen goods — $100,000 worth — were sold on eBay for millions of dollars.

“They stole from Home Depot, Lowe’s, Walmart and Target,” among others, Kobach said.

In his own testimony, John Milhiser, former U.S. Attorney in Illinois, said that “organized retail crime has both national and international components … [and] is distinguishable from ordinary retail theft given its large scale and focus on converting stolen goods to cash through resale or to gift cards through store returns.”

Forced to Raise Prices

John Flynn, district attorney for Erie County, New York, and president of the National District Attorneys Association (NDAA), said that, per stats from business.org, the percentage of small-business owners reporting daily shoplifting increased from 14% to 23% from 2020 to 2021. The U.S. Chamber of Commerce has estimated that 25% of firms have raised prices to offset the losses from these thefts. pymnts.com


ORC & Crime-Fighting Were Top Issues at NRF PROTECT 2023

Retail Leaders Talk Crime Prevention at NRF PROTECT 2023
In Case You Missed It: 3 lessons on collaboration from NRF PROTECT

NRF PROTECT: Retailers come together to share and develop innovative strategies to prevent crime and keep communities safe

A majority of sessions at NRF PROTECT focused on organized retail crime, a growing threat that endangers store employees and customers, disrupts store operations and inflicts financial loss for retailers and communities.

Combating ORC together

In a session on how retailers can work with policymakers to strengthen laws that prevent ORC, leaders from JCPenney discussed the importance of framing ORC to political leaders and why telling the story of its impact can raise awareness across local and state governments, leading to adoption of sufficient criminal penalties. Retailers can help raise awareness about the impact of ORC by sharing personal cases from a sales associate or store manager to show its tangible impacts.

ORC also has the potential to impact whether people want to work in the retail industry, said Walmart U.S. CEO John Furner, who supports retailers collaborating by sharing data on the impact of ORC in their stores.

Reshaping how we think and innovate around crime prevention

Emerging from COVID, leaders have the tools and flexibility to innovate new tech, replicate systems that work and create new practices. More importantly, they can focus on what their findings reveal rather than what they hope they’re going to see, said Amy Herman, attorney, internationalist, crime fighter and art historian. The challenge to create high-impact, low-friction solutions remains a priority for retailers.

Crime prevention is a business problem

Mitigating fraud, theft and security are business problems. Through creative collaboration, retailers can create better omnichannel experiences that protect goods, allow for easy shopping experiences and prevent crime before it starts. nrf.com


Loss Prevention Becoming a 'Greater Need' Amid Retail Crime Epidemic
Retail leaders huddled at NRF PROTECT 2023 to discuss solutions to the growing threat

No One Can ‘Solve’ $95 Billion Retail Crime Epidemic on Their Own

Retail crime won’t stop coming.

There is an unrelenting epidemic of crime plaguing retailers and making the topic top of mind with executives and Wall Street analysts alike.

Thirty-four miles from and thirty-one days since a gunman killed nine people at an Outlet Mall in Allen, Texas, NRF Protect last week drew its largest turnout since at least 2019, as retailers, vendors, loss prevention professionals and others gathered to strategize on anti-crime tips, tactics and technologies. The three-day event is the only retail conference that brings together experts in asset protection, store safety and cyber fraud, according to NRF vice president of asset protection and retail operations David Johnston.

“What we really saw this year was a lot of collaboration and convergence between those three areas,” Johnston told Sourcing Journal. Discussions focused on how asset protection can work with cybersecurity and digital fraud, even touching on the organized retail crime elements of cybersecurity, he added.

Many retailers are taking a “hands-off policy,” Johnston said. “Particularly if they’re non-loss prevention or non-security related employees.” With sales associates increasingly told to not obstruct thieves for the sake of safety, criminals are taking advantage, causing prices to rise and stores to close in some of the hardest-hit areas.

Technology is one way to curb the problem. NRF Protect 2023, which featured solutions from RFID tagging to AI devices tracking products and customers, illustrated how loss prevention is seeking high-tech solutions.

But Johnston doesn’t believe loss prevention is “becoming a bigger business,” rather it’s becoming a “greater need.”

But technology can’t be the only solution, as Walmart U.S. CEO John Furner told NRF CEO Matthew Shay at the event.

“The solution is a combination of talent, tools technology, and coalitions of industry, society and government all working together to solve this issue. There isn’t a single group, in my opinion, that can solve this on their own,” said Furner, who is also the NRF board chairman. sourcingjournal.com

RELATED: Crime remains top issue for Walmart, retail executives


Illinois Retail Crime Task Force Showing Positive Results
Task force & tech tackle rise in retail theft
In 2021, the Illinois Attorney General created a retail crime task force that would take a different approach. They would view the thefts not as one-off’s done by individuals, but as part of a larger organized crime pattern.

Attorney General Kwame Raoul has distributed out almost $5 million to nearly two dozen communities, including Oak Brook, Gurnee, Naperville and Orland Park. “We’ve funded 25 police departments throughout the state, all the way down to Carbondale,” Raoul said. It pays for everything from overtime to license plate readers and surveillance systems that allow police to see what’s happening before they even arrive.

“That’s the difference between now and years ago,” Oak Brook Police Chief Brian Strockis said. “We’re not reacting to these things, we’re being proactive and using technology to get ahead of it and keep people like this safe.”

Automated license plate readers now surround Oakbrook Center giving officers advance warning of potential criminal activity. “If somebody is coming here in a stolen vehicle, they’re not coming to shop,” Strockis said. Task force money has also been used to give police real-time access to store surveillance cameras.

In DuPage County, where Oakbrook Center is located, the state’s attorney charged 462 felony retail theft cases last year. In Cook County, which has five times the population as DuPage County, prosecutors only brought 74 more felony retail theft cases.

“Absolutely it’s sending a message to people,” DuPage County State’s Attorney Bob Berlin said. “’Don’t come here and steal. Don’t come here and commit crime. You’re going to get caught and going to be prosecuted.’” Berlin said he also looks for opportunities to upgrade charges when appropriate.

That message stands in sharp contrast to Cook County State’s Attorney Kim Foxx, who only prosecutes retail theft as a felony if more than $1,000 worth of merchandise is stolen. wgntv.com


A Lot of Retail Theft Comes From Within
Retail Theft is a Big Problem. But Who's Stealing May Shock You

Retailers have been calling out ORC groups. But the problem also lies closer to home.

Retailers are under siege, at least that’s the narrative the industry has been pushing in recent months. Violent crime in the cities, increasingly brazen organized groups running sophisticated smash and grab operations in stores, and unruly consumers making off with electronics and other high priced goodies.

But here’s what retailers and the broader industry are not really talking about: a lot of the theft comes from within. While outside groups and individuals are certainly culprits, employee dishonesty and misconduct has also been a growing problem since the pandemic.

According to a survey by the National Retail Federation (NRF) last year, nearly 57% of retailers identified “internal theft” as a growing risk over the past five years, with 20.7% of that group saying that the threat has become “much more” of a problem.

Inventory shrinkage a complex issue

The industry’s singular focus on outside factors masks the complexity — and vulnerability — of the supply chain that the public doesn’t normally see. Thieves, both employees and outsiders, steal lots of goods from manufacturers to the distribution centers and from distribution centers to the store. Again, how much such cargo thefts contribute to the $94.5 billion losses the NRF cites versus ORC is not known.

Dealing with employee thefts

For retailers, employee thefts is understandably a sensitive topic that they are not eager to publicly discuss. Since retail work is hardly glamorous, retailers have consistently struggled to hire workers so they might not be particularly picky about who they hire.

Organized theft and general street crime no doubt hurt retailers. But perhaps retailers should also look inward and figure out what they can better control to stem the losses from inventory shrinkage. thestreet.com

RELATED: The spreading threat of organized retail crime


Update Oregon SB 900 - Establishing Organized Retail Theft Grant Program
Senate Bill 900 - Recommendation: Do pass the A-Eng. bill.

Summary of Public Safety Subcommittee Action

Establishes Task Force on Organized Retail Theft. Directs task force to review existing issues of organized retail theft to determine changes to laws or policies to address issues or reduce organized retail theft. Sunsets on December 31, 2024.] Takes effect on 91st day following adjournment sine die.] Establishes Organized Retail Theft Grant Program. Directs Oregon Criminal Justice Commission to administer program. Appropriates moneys to commission for purposes of program.

SB 900 establishes the Organized Retail Theft Grant Program for the 2023-35 biennium. This grant program is designed to assist cities, counties, the Oregon State Police, and community-based organizations with addressing and prosecuting organized retail theft.

Funding supports a limited duration Program Analyst 3 position (0.75 FTE) at an estimated cost of $186,598 to develop and implement the grant program at CJC. After this position is funded, CJC will have $4,813,402 remaining to provide as grants to eligible entities. oregonlegislature.gov


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