Two Reports Examine Trends in Organized Retail Crime

By Carlton Purvis


A survey of 129 retailers conducted by the National Retail Federation estimates that organized retail crime (ORC) losses cost retailers about $37 billion last year, up from  $34 billion in 2009. 
But a  Government Accountability Office (GAO) report on ORC, prepared for the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, and also released this week, takes issue with the industry's estimate of the size of the problem, saying that "it remains difficult to extrapolate ORC estimates to the retail industry as a whole from a limited sample of respondents."
However, the GAO does not disagree that "ORC is a multi-billion dollar issue that affects retailers and consumers nationwide."
Of retailers surveyed by the NRF, which ranged from restaurants to department stores to specialty retailers and grocery stores, 95 percent said they had been victims of ORC, which they said was becoming more violent. The NRF report also found that ORC was expanding geographically. For the first time, Las Vegas and Phoenix were  among the top 10 metropolitan areas named by retailers as being affected by ORC.

The NRF report  laments the fact that a bill to establish the Organized Retail Theft Investigation and Prosecution Unit with the Department of Justice failed to pass Congress last year.

GAO interviewed retailers and law enforcement agencies to get a clearer picture of the problem.

Four of eight law enforcement agencies said retail theft and property crimes were often viewed as a lower priority than violent crimes, the GAO report noted. There’s an increasing awareness that ORC is often linked to other criminal activity, but none of the federal agencies GAO interviewed identified ORC as a mission priority. None have specific resources dedicated to conducting these investigations.

The dollar threshold that has to be crossed for ORC cases to be considered felonies varies from state to state; theft of $300 or more is a felony in Illinois; In Wisconsin it’s $2,500. Some states have even raised their felony threshold to free up resources for higher priority cases. ORC perpetrators are generally aware of that and steal below that amount to avoid felony charges, the report notes.

“Linking multiple retail theft events across jurisdictions is often essential to build an ORC case large enough to be considered for felony prosecution,” the GAO report states. No formal federal threshold exists, but stakeholders interviewed for the report said the value of stolen merchandise had to be between $100,000 and $1 million before the FBI will open an investigation.


The report looks at what individual retailers are doing as well as collaborative and government efforts.



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