Friday, June 12, 2009

Organized Retail Crime On The Rise

Organized retail crime (ORC) struck 92% of retailers during the past year, an increase of 13% from two years ago, according to a new NRF survey. And most (73%) of the survey respondents report that the level of ORC is on the rise, compared to just 48% who felt that way in 2006. The NRF surveyed 115 retailers for its fifth annual Organized Retail Crime survey.

Interestingly, even with the economy forcing many retailers to reduce overall staff and expenses, 42% of the respondents say their company is allocating additional resources to address ORC. Perhaps that’s because retailers feel law enforcement is underestimating the problem; 61% do not believe law enforcement even understands the complexity and seriousness of ORC. (Click on these links for stories about what retailers need to know about ORC and its impact on retailers.)

According to the NRF, ORC refers to groups, gangs, and individuals who steal retail merchandise in substantial quantities through both theft and fraud as part of a criminal enterprise. Some of the more sophisticated criminal activity includes “ticket switching” — changing the UPC bar codes on merchandise so they ring up differently at checkout — and using stolen or cloned credit cards to obtain merchandise or to produce fictitious receipts for use in fraudulent returns. Popular targeted goods include designer clothing, gift cards, and electronics.

Leading LP-conscious retailers continue to incorporate advanced technology in their efforts to cut into ORC. For instance, the use of video surveillance software and hardware is on the rise. And that’s a good thing, according to Loss Prevention Foundation president Gene Smith: “The ability to select and apply the appropriate cost-effective technology is an important aspect of what determines the success of many LP programs.”

I’m headed to the 2009 NRF Loss Prevention Conference & Expo this weekend. I’ll follow up next week with more on the retail industry’s efforts to combat ORC, fraud, and theft.


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