The 2015 findings paint a stark landscape for retailers. An astonishing 97% of retail loss prevention executives surveyed believe their company has encountered organized retail crime in the last 12 months, up from 88% last year. The average dollar write-off per $1 billion in annual sales due to such activities is $453,940. The problem does not appear to be going away any time soon with 48.5% of victim companies reporting significant increases in ORC activity this year.
A major concern voiced in the survey is that criminals are increasingly targeting cargo in transit. The percent of polled retailers experiencing cargo theft rose from 35.4% to 37.9% in the past year. NRF Vice President of Loss Prevention Bob Moraca believes that the surge is part of a larger strategy to outmaneuver retailers as executives wise up to traditional tactics. “Brazen and often dangerous criminals are finding new ways every day to manipulate the retail supply chain,” he said. “From the docks where merchandise comes in to criminal flash mobs that involve several individuals running into a store at once, the methods used by crime gangs today run the gamut.” The survey reports that several retailers are encountering bolder attempts by criminals including “smash and grabs” and pepper spray tactics.
Retailers are acutely aware of the problem and are doing their best to protect themselves. Forty-seven percent of retailers surveyed are now focusing their efforts on allocating additional resources to prevent criminal activity. It appears the method retailers are finding most effective is buffing up personnel; 31.8% said they are pushing more resources towards staffing, a 9.1% rise year over year.
While retail executives have been diverting their assets to rein in ORC, most believe that the government needs to step in and play a larger role. Seventy-nine percent of retail executives polled agreed that lawmakers need to pass a federal ORC law in order to effectively combat retail theft. Without a uniform measure across states, retailers must navigate through multiple jurisdictions that lack a much-needed level of consistency to prosecute wrongdoers.
States lawmakers are also getting on board. Within the last year, five states have enacted new laws to deter retail theft, which means that a total of 30 states now have ORC countermeasures in place. According to the NRF, in states with ORC laws, 49.2% of retail executives are benefitting from the increased help from law enforcement.
Some of the survey’s other notable findings include:
- 66% of retailers surveys experienced theft through merchandise credit and gift cards where criminals would shoplift items and subsequently return them
- 31.8% of retailers are allocating more resources towards staff and technology while 24.2% are focusing on budget resources to prevent ORC
- 43.1% of retailers found the increased support of law enforcement useful after ORC legislation was passed in their state while 24.6% sought more support from state police
- Almost four out of five retailers agreed that there is a need for federal ORC legislation
- · The top five cities for retail theft are Los Angeles, Miami, Chicago, New York, and Houston
- 18 out of 23 retailers surveyed reported thefts en route from their distribution centers to their stores
- Retailers identified online auction sites as the single medium where the most stolen merchandise was commonly found at 38.8%