The State of Organized Retail Crime

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Organized retail crime (ORC) is an evolving area of crime that continues to plague large retail chains as well as independent retailers around the world. Technology has changed the ORC landscape for both criminals as well as for investigators and security professionals. To address growing losses, intelligence-led strategies need to be implemented that account for the evolving nature of these crimes. Common and collaborative tools and tactics are necessary to provide a framework for law enforcement and retail to work together to overcome the threats presented by organized retail crime.

Organized Retail Crime: What is it?

Organized retail crime (ORC) involves the association of two or more persons engaged in illegally obtaining retail merchandise or otherwise defraud retail organizations as part of an unlawful commercial enterprise. ORC is not restricted to a geographic area and a diverse range of retailers are targeted.

Retail losses due to organized crime have averaged $777,877 per $1 billion in sales in 2018, an increase of around 7% from 2017, according to the National Retail Federation’s (NRF) 2018 Organized Retail Crime survey. A majority of retailers, 92%, said they had been victimized by ORC in 2018, and 71% reported that ORC is increasing.

Why does organized crime continue to increase?

Retailers point to a number of factors to explain the increase and some broader trends become apparent.

  • Ease of theft and resale: It may be getting easier to either steal or sell criminally obtained products. Technology and social media have made it particularly easy for gangs targeting retail to communicate with each other, as well to find an active market for the resale of stolen goods.
  • Gift cards: Gift cards or policies related to them have made it easier to steal from retailers. When returns are issued through a gift card or merchandise credit, often an option for returns without a receipt, those can be sold on secondary markets online, pawn shops and gift card exchanges.
  • Laws: Several states have raised the threshold for felony thefts. Criminal organizations targeting retail appear to have an understanding of the laws that govern their activities. In states where the felony threshold has increased, over half report an increase in ORC case value.

Criminals continue to target a range of products, from high-end designer clothes to day-to-day necessities. Where there is an opportunity for profit, you can be assured that gangs will exploit it. This means that no product line is safe. Organized retail crime organizations can range from simple to very complex. Organizers, boosters, fencing operations, re-packagers, and even illegitimate wholesale operations might all be involved. Technology has enhanced the abilities of ORCs in fulfilling these activities, and the convergence of physical and digital retail experiences means that organized retail crime will continue to evolve.

What to do next?

Retailers make use of a variety of tactics to combat organized retail crime. Almost 60% of retailers say they will allocate additional resources to address organized retail crime in 2018. Technology solutions are the most frequent tools cited by retailers, with staff to loss prevention teams following closely behind. In some cases, loss prevention teams are alone in dealing with this very sizeable area of retail crime and it varies by geographic area. This depends largely on the dollar amount of theft before the crime is considered more serious than a misdemeanor fine. Some places in the United States have enacted anti-ORC laws. Even in these areas, retailers report very little police assistance in the investigation. When police are involved, help generally comes from the local police force.

Technology solutions, which are becoming more and more intelligent, point to the right path forward for retail loss prevention teams. Everything that happens in the real world is accompanied by digital footprints that loss prevention investigators can use to trace ongoing gang activity.

Media Sonar coordinates your online investigations by connecting the right tools and workflows into a single solution. Drawing from millions of sources across the Surface, Deep and Dark Web, our software alleviates the difficulties investigators have in gaining visibility across the entire Internet and provides case management workflow that can be used to generate evidence that law enforcement can use to prosecute organized retail crime and theft. Developed in consultation with experts in the field of loss prevention, Media Sonar is here to help overcome the growing range of tactics used to target the retail industry.

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