If the Public Only Knew The Truth


Submitted by Darren K. Jackson, LPC
Retail LP Professional

April 25, 2012

The Ripple Effect of ORC and the impact it has on our communities, cities, counties, and states, as well as retailers, associates, and consumers. Texas retailers lose a combined $2.5 billion in losses as estimated in 2009. With this said if sales tax is an average of 8 1/2 % this equates to more than $200 million in sales tax revenue losses. If a law enforcement officer makes $25,000 a year this amount alone would fund well over 8,000 police officers to help fight crime on the streets. Of course this depends on the average salary of an officer, etc. The difference between ORT and ORC is that ORT is strictly theft, and ORC includes theft as well as all financial crimes combined. The loses suffered by both of these equate to almost double that of all other property crimes combined to include burglary, auto theft, etc. The way the cities, counties, and states lose sales tax revenue is when merchandise is originally stolen there is no sales tax paid for it which is a sales tax revenue loss. When merchandise is sold online, typically in some states sales tax is not charged which is another sales tax revenue loss. These sellers typically buy the merchandise for 30 to 50 cents on the dollar and turn around and sell it for 70 cents on the dollar, which creates unfair and illegal competition to business and retailers because people have to have jobs in order to survive. When stolen merchandise is returned to the retailers and full price is given back, the sales tax is given back also to the criminal which is another sales tax revenue loss. They make no investment, just steal, and make a huge return on zero investment or risk.

How is this fair to all of us who are hard working Texans that are doing everything we can to make ends meet, and take care of our families? As a result of these staggering losses, retailers and businesses have to raise prices to primarily cover these losses, or to offset the increased expenses caused by the losses, and this is a two edge sword, because if you aren't competitive on price, no one buys your merchandise. If no one buys your merchandise, you don't have sales. If you don't have sales, you don't have associates, therefore additional taxes aren't generated. When there are no jobs, no money is being spent in the economy therefore no sales tax is being generated. No sales tax being generated means there is no city, county, or state government. No government means no police on the street to fight crime, and no fireman to fight fires, and no city, county, or state services. Businesses become less profitable due to these losses as they have to pay for payroll, rent, utilities, etc. and spend tons of money to protect their merchandise so that the doors stay open, there is merchandise to sell, and so that cash can be put in the register to pay for all of these, therefore retailers have to do a lot to stay in business. Those that simply can't afford it don't stay in business very long, which once again causes sales tax revenue losses.

When merchandise is sold at a flea market or swap meet, etc. often times sales tax is not charged which is a sales tax revenue loss also. The majority of these transactions are cash. The Comptroller's Office only has so much manpower to enforce whether the state gets sales tax revenue or not, as flea markets and swap meets are not as regulated as they need to be. Retailers and businesses pay large sums of money on taxes, but the criminals and their enterprises don't. They typically pocket every cent. ORC is driven by greed just like other crimes. It has been shown that ORC has connections to drugs, prostitution, human smuggling, guns, terrorism, etc. Anything of value is traded for cash. Merchandise, store credits, gift cards, etc. The reason for this is because they all have street value, and are all typically exchanged for dope, sex, etc. for the tools to commit the crimes, which funds almost every single criminal enterprise. Drug enterprises are now moving into the ORC arena because it's high profit, and less risky.

Then there's health risk of selling expired or left in extreme heat or conditions. In this day and age, the differences between law enforcement, and retail investigators needs to be put aside, in order to develop strong partnerships and communication through synergy is extremely crucial in order to work jointly to successfully dismantle these criminal enterprises. Taking their money and assets, as well as having strong penalties for their crimes is the key! Asset forfeitures also have the potential to add even more money back to the cities, counties, and state also.