Organized retail crime is down slightly year over year, but it still affects 88 percent of retailers according to a new survey released by the National Retail Federation. Merchants estimate that organized retail crime costs businesses $30 billion a year.
The NRF began surveying its community of loss prevention and security executives about the impact ORC has on their business 10 years ago. This year's poll was conducted among 76 senior retail loss prevention executives, of which nearly nine in 10 (88 percent) report that they have been a victim of ORC in the past year. Last year's figure came in at 94 percent.
Brick-and-mortar stores are often the focus of retail crime, but as online business soars, Web savvy criminals are now hacking e-commerce operations. For the first time, NRF asked about the impact ORC has on their online operations and nearly half (48 percent) say their online operations are affected.
Organized retail crime includes such activities as fraud, theft and fencing, where an individual knowingly buys stolen property for later resale. Two of the biggest components of ORC are physical and e-fence operations. According to the survey, 63 percent of retailers said they have identified or recovered stolen merchandise from a physical fence, such as a pawn shop, flea market or temporary store set up; 68 percent say they have recovered merchandise from an e-fencing location, such as a third party website, auction site or blog.
Cargo theft and return fraud are also on the rise. According to the survey, 35 percent of retailers have been victims of cargo theft in the past year. Another 77 percent of merchants have experienced thieves returning stolen merchandise for store credit, to then sell that merchandise credit to secondary market buyers or sellers. Retailers lost an estimated $9.1 billion in 2013 as a result of return fraud, according to a survey by The Retail Equation.
While organized retail crime gangs affect the United States coast to coast, the survey indicates that Los Angeles, Miami, Chicago, New York and Houston are the top five cities where crimes are most rampant.
ORC has been a hot topic in the retail industry of late. The Retail Industry Leaders Association focused on the problem during the Retail Asset Protection Conference in March, with several key sessions addressing surveillance and counter intelligence efforts. "It's a battle we fight every day," Garth Gasse, RILA director, asset protection told FierceRetailIT. "RILA sees an opportunity to get involved to really help fight through collaboration."
-See this National Retail Federation press release
Return fraud costs retailers $9.1 billion per year
Holiday return fraud will cost retailers $3.4 billion
Sears' e-receipt fear: Buy once, return many
New digital-receipt standard envisions cross-channel and even cross-chain uses
PayPal waives payment processing fees for startups