Organized Retail Crime (ORC) refers to the coordinated and planned criminal activities targeting retail establishments. It involves professional criminals who steal merchandise in large quantities for the purpose of reselling it for profit. ORC has become a significant issue for retailers worldwide, causing substantial financial losses and posing a threat to the safety of employees and customers.
ORC encompasses various criminal activities, including shoplifting, cargo theft, and return fraud. For example, if goods are being transported in large trucks, cargo theft can occur if these crime rings target such trucks and steal goods, preventing the goods from even reaching the store. On the other hand, return fraud involves returning counterfeit or stolen items for a refund or store credit.
ORC groups employ various tactics to carry out their criminal activities. These include distraction techniques, where one or more individuals divert the attention of store employees while others steal merchandise. ORC groups also engage in "booster bag" theft, where they use specially lined bags to bypass security systems. Additionally, they may use counterfeit receipts or gift cards to return stolen items for cash or store credit. This is all possible due to many retailers’ policy which prevents employees from engaging during a robbery.
The financial losses incurred due to ORC can be staggering, costing U.S. retailers nearly $70 billion in 2020. These losses not only affect the bottom line of retailers as their already small profit margins take a hit, but also lead to increased prices for consumers. Many retailers have had to close down branches due to high rates of ORC. Additionally, ORC disrupts the supply chain, causing inventory shortages and affecting the availability of products for customers.
The economic impact of ORC extends beyond direct financial losses. In severe cases, the financial strain caused by ORC can lead to job losses and even business closures. When retailers experience significant losses, they may be forced to downsize their workforce or close down altogether, resulting in unemployment and economic instability in the affected communities. Suppliers and manufacturers relying on the business of these retailers may also take a large hit, resulting in further losses and potential downsizing.
Several high-profile ORC cases have made headlines recently. $218k of stolen goods was found in the backyard of an LA home, leading to the arrest of 10 suspects. Target has also closed down many stores in Portland and New York City, citing ORC as the main reason.
To combat these criminal activities, collaboration between retailers and law enforcement agencies is crucial. This involves sharing information, intelligence, and best practices to identify and apprehend ORC offenders. Retailers can also use technology, such as surveillance systems, electronic article surveillance (EAS) tags, and inventory management software, to prevent and detect ORC incidents.
The imposition of severe legal consequences on offenders is crucial. This includes imposing significant fines, jail time, and restitution for the stolen merchandise. For example, the Board of State and Community Corrections approved nearly $270 million in grants to local law enforcement and district attorney's offices in California to help combat ORC. Strict enforcement of laws sends a strong message that ORC will not be tolerated, thus preventing economic losses for both consumers and retailers.
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