Organized Retail Crime

Organized retail crime (ORC) is a growing problem throughout the United States

Affecting a wide range of retail establishments, including supermarkets, chain drug stores, independent pharmacies, mass merchandisers, and convenience stores among others.  Such retailers suffer from inventory shrinkage - that is, the disappearance of stocked inventory from the store or distribution center environment.  This is a long and well-documented aspect of operating retail stores.

ORC is separate and distinct from petty shoplifting in that it involves professional theft rings that move quickly from community to community and across state lines to pilfer large amounts of merchandise that is fenced and sold back into the marketplace. Petty shoplifting is typically considered to be items stolen for personal use or consumption.

Recent years have seen a spike in ORC activity. Reported financial losses related to shrinkage are staggering. According to Congressional testimony and industry experts, organized retail crime losses total an estimated $15-30 billion per year. A survey conducted annually over the past 6 years by the National Retail Federation has seen a consistent rise in the number of retailers reporting this type of issue, with greater than 90% of retailers having been victimized in 2011.

Products that are Typically Stolen

ORC gangs typically target everyday household commodities and consumer items that can be easily sold through fencing operations, flea markets, pawn shops, swap meets, and shady store-front operations. ORC gangs are also using Internet Auction Websites as a venue to sell stolen goods. Items that are in high demand by these professional theft rings include over-the-counter (OTC) drug products, such as analgesics and cough and cold medications, razor blades, camera film, batteries, videos, DVDs, CDs, smoking cessation products and infant formula. High end items including designer clothes, furs and consumer electronics are also popular.

Risks to the Public

Consumers are at risk when ORC gangs steal consumable products especially OTC drug items and infant formula. In many cases after the merchandise has been stolen, the products are not kept under ideal or required storage conditions which can threaten the integrity of the product. For example, extreme heat or cold can affect the nutrient content or physical appearance of infant formula. When products are near the end of their expiration date, ORC middlemen may change the expiration date, lot numbers and labels to falsely extend the shelf-life of the product and to disguise the fact that the merchandise has been stolen. In addition, cough and cold products are popular with ORC rings because these medications can be sold to clandestine labs for the purpose of manufacturing methamphetamine.

CTA1

How ORC Effects Consumers

Retail theft results in consumers having to pay higher prices for the products they purchase as retail establishments attempt to cover their losses. Higher prices adversely affect all consumers especially the most needy in America, such as the elderly and families that depend upon food stamps and the WIC program to augment their limited budgets.

Moreover, consumers are also being inconvenienced by this type of criminal activity. Because theft has become so rampant in certain product categories, for example infant formula, a number of major retail companies are taking the products off the shelves and placing them behind the counter or under lock and key. In some cases, products are simply unavailable due to high pilferage rates.

Legislative Environment

Presently, there is no federal law that specifically addresses ORC. The federal statute most frequently utilized in dealing with professional theft rings is the Interstate Transportation of Stolen Property Act, but this law is limited to situations involving the transporting of stolen goods. Thus, when professional thieves are apprehended for stealing large quantities of merchandise from a retail store, no federal statute is available. This means the case must be handled under a state shoplifting law that usually treats such crimes as a misdemeanor. As a result, rarely are shoplifting cases prosecuted and when they are individuals who are convicted usually see limited jail time or are placed on probation.