What is organized retail crime (ORC)?
ORC or Organized Retail Crime refers to professional criminal enterprises that specifically target retail environments. These groups can be regional gangs or international crime rings. They often attack a retail store in teams- some create distractions, while others steal- and are frequently told what to steal by the gang leaders. There may be an accomplice working in the retail store or corporation as well. Most commonly targeted items for ORC are pharmaceuticals, building supplies, groceries, household goods, electronics, health and beauty, automobiles, apparel, clothing, and alcohol/tobacco.
What is an example of organized retail theft?
ORC can take many shapes in the retail industry, making it very challenging to combat. Types of retail theft operations take place as:
- Shoplifting– A recent example of ORC in shoplifting is that of “Queenpin”Michelle Mack of San Diego, CA. She headed an organized crime ring targeting retailers for more than a decade with her shoplifting teams- dubbed the “California Girls” by police. They quietly stole massive amounts of cosmetics from Ulta and Sephora stores across multiple states. Mack then made millions by reselling the cosmetics on Amazon.
- Smash and grab theft– This is theft where large groups or individuals rush into a store to steal goods or grab from display cases or windows. CA has seen a surge in smash-and-grab robberies- (e.g. across Los Angeles between November 18, 2023- September 6, 2023, there have been 11 serious smash-and-grab robberies that have netted thieves more than $330,000 worth of stolen merchandise).
- Truck-jacking– Examples include Mafia-style hijackings at truck stops, strategic truck theft using impersonated truck drivers, fake paperwork or dispatchers, and outright truck theft by break-ins/hot-wiring.
- Cargo theft– $15-35 billion is annually lost to cargo theft from trucking thefts AND at ports of entry off ships, from freight trains, or any other place along the supply chain where goods are in transit.
What are organized retail crime methods?
The growing pattern of ORC methods is twofold:
- There are persons called “boosters” who steal a high volume of goods from multiple retailers.
- There are the “fences or fencers” who sells the stolen goods- often via online marketplaces, to quickly and discreetly dispose of mass quantities of stolen merchandise.
What is the impact of ORC on the retail industry?
These ORC activities have a huge impact on the revenue of retail businesses- and ultimately customers.
Numerous examples of the adverse impact of retail crime are reported daily. Target claimed in September 2023 that theft and organized retail crime together helped drive its $500 million decrease in annual profits.
The 2023 National Retail Security Survey says that retail “shrink” (loss of money or inventory that should be sellable) accounted for $112.1 BILLION in losses for retailers. According to the survey, the average shrink rate in fiscal 2022 increased to 1.6%, up from 1.4% the previous year. The breakdown of revenue loss from shrink was:
- Internal/employee theft 28.85%
- External theft (including ORC) 36.15%
- Process/control errors 27.29%
Almost two thirds (65%) of retail revenue loss was due to theft. Customers ultimately pay for theft- (e.g. with direct price increases, reduced product availability, and increased security measures that impact customer experience).
How can organized retail crime be reduced?
National retail groups kept urging Congress to enact a Congressional bill that would mandate more prevention efforts by online marketplaces- where the stolen goods are often sold. The result was the INFORM Consumers Act of 2020. The bill makes online transactions more transparent so as to deter the online sale of stolen, counterfeit or unsafe merchandise. Third party sellers on online retail marketplaces now need to authenticate with bank account, government ID, tax ID, and contact information. Non-compliance can result in civil penalties for the seller- $50,120 per violation of the law.
Additionally, the Department of Homeland Security has responded to OTG’s (Organized Theft Groups) profiting from ORC, cargo theft and other theft-related crimes. They have established their national program Operation Boiling Point– a targeted response to these organized theft groups. 7,100 special agents are working to combat transnational criminal organizations disrupting interstate and foreign commerce.
Many states are also enacting tougher measures against retail thefts. For instance, CA is tightening their laws against retail theft, with several bills in process. Under the pending Assembly Bill 1772, store thefts would no longer be processed as a misdemeanor without jail time if a suspect has been convicted of 2 or more theft-related offenses. Prosecutors would be allowed to add up cumulative amounts of stolen merchandise to possibly make the theft a felony-something that has not been possible to date.
In addition, many retailers are stepping up their security efforts. Relying on staff to catch shoplifters puts people in danger, so retailers opt for technology and trained security. For instance, alert and monitoring technology in parking lots does not impede customer experience, and can create an initial deterrent to criminals (e.g. drone for security patrol or types of drones in security services). Employing trained security guards can be an additional overt presence that deters and impedes crime. Also trained security guards can be crucial during any criminal incidents, since they are trained on how to control crowd as a security guard to prevent injuries. Increased reliance by retailers on trained security guards brings into focus how much do security guards make (or what is the salary of a security guard). The necessity of attracting premiere security guard personnel is critical in addressing this growing crisis of organized retail crime.
How much is considered theft in California?
PC 490.4 addresses organized retail theft. It is directed at the ones who are supervising and managing those who steal merchandise. Rather than just a misdemeanor, a person can be charged with a felony if the value of the stolen merchandise is more than $950, or if they are charged as the one who supervised and managed those who stole the merchandise/received the stolen merchandise. A charge for PC 490.4 is often filed together with other charges such as Conspiracy, ID Theft, and Receiving Stolen Property. PC 490.4 must be charged as a misdemeanor if the stolen merchandise is under $950. However, it is a felony for property more than $950 or if proven to have supervised and managed the theft. The sentence can be up to 3 years in jail, probation or fines.
To summarize, Organized Retail Crime (ORC) causes multiple negative repercussions to the retail industry, its vendors, employees, and all consumers. The importance of implementing every proactive security method in retail environments therefore cannot be overstated. Trained security guards, effective security planning, surveillance cameras, drones, and article surveillance systems are just some key security methods for combating this rising crime wave.
