In the fast-paced, interconnected world of retail, organized retail crime and theft (ORC) has risen to become a significant and growing challenge. Sophisticated criminal networks often operate across state and even national borders, stealing from retailers and reselling merchandise through various channels. The ramifications of ORC are extensive, touching not only the bottom line of companies but also rippling out to broader economic impacts.
According to the National Retail Federation (NRF), retailers experienced a 26.5% increase, on average, in organized retail crime incidents in 2022. In addition to being a distressing statistic, this trend is a clear indication that ORC is a problem that continues to escalate.
A report by the International Council of Shopping Centers reveals that inventory loss in 2022 reached a staggering $94 billion, with 75.9% of retailers reporting an increase in ORC activity. The financial losses alone are a heavy burden, but the repercussions of ORC extend beyond immediate monetary terms.
Addressing the threat of ORC requires a concerted effort from all stakeholders involved.
The knock-on effects of these crimes can be felt throughout the economy. Loss of revenue translates into fewer jobs, decreased economic activity, and a weakened retail sector. In fact, organized retail crime has resulted in $125.7 billion in lost economic activity and the elimination of 658,375 jobs. (U.S. Chamber of Commerce).
Ways to mitigate the effects of organized retail crime and theft (ORC)
Addressing the threat of ORC requires a concerted effort and comprehensive approach from all stakeholders involved. Here are some steps organizations can take to significantly mitigate the risks and impacts of ORC, protecting their assets and ensuring a safer shopping environment.
- Establish a team focused on ORC investigations: Determine the extent of ORC activity through detailed investigations. Use available data, surveillance footage, and other evidence to understand the scope of the issue. Take this a step further and consider bringing in third-party investigation teams who specialize in ORC.
- Support industry collaboration: Support initiatives that encourage collaboration between retailers, law enforcement agencies, and other stakeholders in the retail sector. These collaborations can facilitate the sharing of resources, intelligence, and expertise to better tackle the ORC problem.
- Engage risk advisory services: Consult with risk advisory professionals to gain insights into the latest trends in ORC and to develop effective mitigation strategies. Regularly assess potential risks and vulnerabilities in your organization. This includes evaluating physical security measures and policies, data protection protocols, and employee awareness.
- Enhance technology solutions: Invest in technology solutions such as advanced video surveillance systems, RFID tagging, data analytics tools, and anti-theft devices. These technologies can help in identifying suspicious activities, analyzing patterns, and preventing ORC incidents.
- Strengthen supply chain security: Implement stringent supply chain security measures to prevent ORC groups from infiltrating the supply chain. This could include conducting thorough background checks on suppliers, securing transportation routes, and implementing theft-resistant packaging.
- Utilize protection services: Employ in-house asset protection teams or outside security firms to protect physical assets. In addition, install surveillance and alarm systems and other security measures.
- Perform regular audits and controls: Regularly audit inventory and implement strict controls to reduce opportunities for theft. This includes tightening controls over receiving, distribution, and sales processes.
- Promote employee training: Equip employees with the knowledge and skills to identify and report suspicious activities. Regular training can ensure that employees are an effective first line of defense against ORC.
- Advocate for stricter legislation and penalties: Engage with local and national lawmakers to advocate for stricter laws and penalties for organized retail crimes. Support legislative efforts aimed at curbing ORC and ensuring stronger consequences for those involved.
- Engage online marketplaces: Collaborate with online marketplaces and e-commerce platforms to address ORC activities that occur through online channels. Monitor online platforms for counterfeit or stolen goods.
By taking steps to mitigate, prevent, and deter, we can turn the tide against organized retail crime and protect the health and vitality of our retail sector. As we move forward, we must recognize this not only as a matter of corporate responsibility but as a societal one. The future of retail may depend on it.
Pinkerton can help your organization mitigate the short- and long-term effects of organized retail crime and theft. For more than 170 years, Pinkerton's investigations, risk advisory, and protection services have been helping organizations uncover organized retail crime, identify vulnerabilities, and mitigate risks. Trust our expertise to help you safeguard your bottom line and maintain a secure retail environment.