Organized retail crime and theft (ORC) does not refer to an isolated shoplifting incident — it’s a sophisticated, large-scale operation that drains billions of dollars from the retail industry annually. It’s insidious, often operating under the radar and causing significant damage before it’s even detected. Even more concerning, ORC incidents are increasing dramatically.

The alarming rise in ORC incidents has underscored the urgent need for thorough investigations into this covert criminal activity. But why is investigating ORC so critical? Simply put, without comprehensive investigations, these criminal rings continue to operate with impunity, causing financial damage to businesses and, ultimately, consumers. Over half of consumers (53%) believe there has been an uptick in retail crime, according to the National Retail Federation. Investigations are the key to unmasking these criminals, understanding their modus operandi, and developing strategies to prevent future occurrences.

Why organized retail crime and theft requires expert investigations

The impact of ORC on businesses is severe, highlighting the critical need for effective investigation strategies to prevent and combat this type of crime.

“Understanding organized retail crime and theft requires an awareness of its various forms and the serious impact it can have on businesses. ORC is typically conducted by a group or network of individuals who engage in shoplifting, fraud, theft, or other illegal activities targeting retail organizations with the intent to resell for financial gain,” stated Miguel Martinez, Vice President, Pinkerton Global Investigations.

While retailers can provide valuable information about the nature of the thefts, the items stolen, and the patterns they have noticed, many retailers do not have the resources or the experience to conduct their own investigations.

With the rise in crime, law enforcement agencies, who possess the legal authority to apprehend suspects and prosecute cases, are busier now than they have ever been, especially in certain states across the US. They may not have the resources and manpower to investigate every incident of ORC.

Fighting ORC is all about being timely and proactive and leveraging partnerships. Third-party investigators can facilitate valuable collaboration between retailers, law enforcement, and other stakeholders and share intelligence, resources, and strategies to effectively combat ORC.

“Private investigators work with clients, gather evidence, and then work closely with local law enforcement agencies,” said Mike Pentek, Pinkerton Managing Director. “At Pinkerton, a lot of our investigators are former law enforcement, and they know how to build a case. A solid case file tells the story. It’s got evidence. It’s got local case numbers from different police departments. It’s got license plates. It may even have surveillance on the bad guys — where do they go when they leave a retailer with $1000 in baby formula and who are they selling it to? And then we may have information on that place of business or that warehouse.”

“We have the ability to build a proper case file to present it to law enforcement, wrapped up nicely with a bow. They will have enough evidence and resources to run with it, get to the bottom of the case, and possibly prosecute,” said Mike.

What is involved in an organized retail crime and theft investigation?

The process of investigating organized retail crime and theft involves several key steps:

Detecting large-scale retail inventory loss

Criminals involved in ORC are typically part of sophisticated networks that operate in a highly organized and strategic manner. The first step in investigating ORC is for retailers to recognize that it is occurring — noticing patterns of inventory shrinkage, identifying suspicious behavior, or receiving tips from employees or customers.

In New York City, for example, a major retailer fell victim to what appeared to be a large-scale theft operation, resulting in significant inventory loss, potentially running into hundreds of thousands of dollars. Witnesses reported seeing several individuals working in concert during peak shopping hours to distract store employees, while others surreptitiously targeted merchandise from shelves, removed security devices, and concealed the stolen merchandise in bags. Upon reviewing CCTV footage, employees discovered the scale of the theft and the number of individuals involved.

However, ORC is not always so blatant. It can also go unnoticed due to its complex and covert nature. For example, employees at a different major retailer in Los Angeles uncovered what appeared to be a slow and methodical theft strategy that went unnoticed until employees conducting a routine inventory check noted consistent discrepancies. The scale of the operation became apparent when the retailer’s loss prevention team analyzed inventory records and surveillance footage. They discovered a pattern of theft that suggested a well-planned and coordinated effort, likely involving multiple individuals.

These are just two examples of ORC. Groups often use a variety of tactics — including but not limited to cargo theft, counterfeit manufacturing, product diversion, gift card fraud, and return fraud — and spread their activities across multiple locations and regions, making it difficult to recognize the patterns of their operations and making it harder to grasp the full scale of the criminal network

“As technology continues to evolve, so do the techniques used by organized retail crime groups. They are likely to adopt more sophisticated methods such as cyber-enabled crime, digital shoplifting, or online fraud,” said Miguel. “With the growing popularity of e-commerce, organized retail crime may increasingly target online retailers. Fraudulent activities like identity theft, account takeovers, and fake product reselling can significantly impact e-commerce platforms.”

Finding and following leads in organized retail crime and theft investigations

“Identifying individuals involved in ORC is often very difficult. At the retail level, these people will come in with masks. They may not have the correct license plates on their cars or license plates at all. That can be problematic when establishing leads. But they have to sell it somewhere,” said Pinkerton Investigator Michael Corvi, a former New York Police Department (NYPD) detective and organized crime investigator. “Traditionally, we’ll get a list of stolen items and track it from there.”

Stolen goods are typically sold through various channels, such as pawnshops, underground markets, and online marketplaces. However, an investigation into an organized retail crime incident does not focus solely on identifying groups of interest via a simple internet search. Anybody with a smartphone or computer could go on Google or other browsers and search for information, noted Miguel.

“As investigators, we use a combination of investigative techniques, proprietary technology, data analytics, and human intelligence techniques. We start with a lead and trace the connections — what they are selling, who’s buying, and who they are connected to. We start to see a picture of all the different entities. It’s like putting together a puzzle. We investigate, we analyze, and then we put it together in a way that makes sense. We follow all the leads with the ultimate goal of identifying organized retail crime rings,” he said.

One of the advantages of working with private investigators, like Pinkerton, is their reach and ability to scale investigations.

“We can start an investigation in New York and follow leads to New Delhi, India. We have the ability to respond in every major area almost everywhere in the world,” said Miguel. “The investigation is consistent because we’re one organization following through.”

Collaborating with law enforcement during ORC investigations

Collaboration between private investigators and law enforcement is an integral part of ORC investigations. A collaborative approach leads to stronger relationships, improved communication and more effective responses to ORC. After all, no single organization can do it alone.

“Bringing together the resources of private investigators and law enforcement increases the chance of obtaining the desired outcome of identifying the suspects, obtaining evidence, and dismantling the organization,” said Michael Corvi. “Oftentimes, one of the investigative entities may lack certain resources. Through collaboration with multiple agencies those gaps can be filled. This increases the likelihood of obtaining criminal prosecution."

A recent case highlights the collaborative effort between local retailers, law enforcement, and Pinkerton investigators that led to the arrest of an ORC network suspected of stealing over $3 million worth of merchandise from various retailers. One local retailer, who first noticed a pattern of high-value thefts, contacted Pinkerton. Using their expertise in ORC, investigators worked closely with the retailer and law enforcement to gather evidence, uncover theft patterns, and ultimately identify the suspects. The operation culminated in a coordinated law enforcement raid on multiple locations, resulting in the recovery of a large volume of stolen goods and the arrest of the suspected criminals.

“Working together and communicating between both public and private industry has been proven to be a factor in bringing these criminals to justice,” said Michael.

ORC post-investigation analysis

After completing an investigation, the information is analyzed to identify gaps and vulnerabilities in the retailer's physical security and security processes.

“As investigators, we want to know your procedures. Understanding your vulnerabilities is a key factor when assessing your organized retail crime issues,” said Miguel. “We can then recommend targeted strategies and best practices to combat ORC.”

For some retailers, this means implementing robust security measures like more surveillance cameras, alarm systems, access controls, and other advanced technologies that deter organized retail crime. For others, it may mean employing trained security personnel who can help prevent thefts and apprehend offenders.

“Retailers may also need to establish effective supply chain procedures to include the proper vetting of transportation providers. This can help mitigate the risk of organized retail crime attacks by identifying potential perpetrators,” said Miguel. “Ensure your suppliers adhere to strict compliance standards and do not engage in illegal activities by requesting a SCOUT due diligence report.”

“At the end of the day, our goal is to help organizations reduce their ORC exposure and reduce their risk as well,” said Mike.

Continuing the fight against organized retail crime and theft

Organized retail crime and theft investigations are a critical component in the fight against this covert criminal activity. Unchecked, ORC not only results in direct financial losses but can also impact the safety of retail employees and deteriorate the trust consumers place in retailers, threatening the viability of businesses in some communities. When retailers actively engage in ORC investigations, they send a clear message that illicit activities will not be tolerated, deterring potential criminals, preserving their brand reputation, and demonstrating their commitment to ethical business practices.

To learn more, visit our Investigations services page.

Written in collaboration with:

  • Miguel Martinez, Vice President, Pinkerton Global Investigations
  • Val Jimenez, Director, Pinkerton Global Investigations
  • Shawn Rajabi, Director, Central California
  • Michael Corvi, Pinkerton Investigator

Published September 07, 2023