Organized retail crime (ORC) is nothing new. For decades, criminal rings have been stealing large amounts of retail merchandise and then selling their illegally obtained goods for profit. What's new is how online shopping is greatly magnifying the problem. ORC costs the retail industry an estimated $30 billion every year (a conservative figure), and that can put some retail businesses out of business. Is there any solution?
Both brick-and-mortar and online retail stores are subject to ORC. Well-organized criminal rings that often work on an international level steal merchandise and then sell those stolen goods at swap meets, flea markets, pawnshops, and pop-up stores. With the increase of online shopping, however, ORC now has a worldwide online outlet in which to sell stolen goods.
Targeted items typically include cosmetics, over-the-counter medications, fragrances, batteries, energy drinks, baby formula, razor blades, and designer clothing, among others. In home-improvement stores, like Lowe's, ORC now accounts for about 60% of total losses, up from about 25% in 2015.
Some possible solutions
Although there isn't a solution yet to the great and growing problem of ORC, there are ideas being considered and attempted.
Loss-prevention professionals work to protect merchandise in brick-and-mortar stores, typically in malls and big-box stores like Walmart and Target. But these professionals have typically focused on crimes such as shoplifting or employee theft. ORC is a more complex matter since crime rings don't just steal from one retailer; they steal from many retailers -- often in a single day and often across state lines -- making them difficult to track. Brick-and-mortar retailers need to work together to resolve cases, and that now includes maintaining databases across state lines, which currently is not being done.
Another possible solution being discussed involves getting the government involved under an act called the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act, a bipartisan effort that helps fight the online aspect of ORC. The INFORM Act would require "extensive transparency of large-volume third-party sellers in online retail marketplaces." The act would specifically address stolen, counterfeit, and dangerous consumer products.
Making ORC a felony would likely help deter some criminals. As things stand today, ORC -- often a major criminal enterprise -- is typically charged as a misdemeanor. Essentially, criminals who engage in ORC are charged and treated much the same way as one-time shoplifters are.
Raising public awareness can help deter consumers from unknowingly creating high demand for stolen products, a demand which has risen 30% for online purchases. The Attorney General Alliance, experts in this field, says one way to tell if an online purchase might involve stolen goods is if it's a bulk sale at a greatly reduced price, such as 50% off.
The Millionacres bottom line
The problem of organized retail crime needs to be solved. Retailers should be amenable to fighting these crime rings by learning all they can about how ORC works and what they can do to help. They can also support harsher penalties for ORC criminals. If something positive doesn't happen soon, retailers can probably expect to be subject to more government regulations, likely through the Federal Trade Commission (FTC).