The Rise of Organized Retail Crime and What Your Store Can Do About It

retail store environment

The growing scale and sophistication of retail thefts is putting pressure on stores to boost their loss prevention efforts. That’s according to a new survey by the National Retail Federation, which asked respondents about their experiences with organized retail crime (ORC).

Of the retailers surveyed, 100% reported having been victimized by ORC. This growing phenomenon covers a wide range of crimes including shoplifting, warehouse thefts, false returns and the manipulation of gift card programs.

…organized retail crime is now the leading cause of retail shrinkage, moving ahead of employee thefts.

As opposed to small-scale thefts by individuals and employees, these larger criminal activities are carried out by coordinated groups of thieves. In fact, organized retail crime is now the leading cause of retail shrinkage, moving ahead of employee thefts.

inside a retail store

As NRF suggests, proper employee training is one of the best loss prevention strategies retailers can use. Employees should know how to identify and report potential crimes.

The survey comes just a few weeks ahead of the biggest retail season of the year, including Black Friday in the US.

Great Sales Expectations?

Retail spending forecasts for this holiday season are positive, but much more so on the digital side. For the retail sector as a whole, sales in November and December are expected to increase 3.6% over 2015 (those numbers exclude spending related to automobiles, gas and restaurants).

Still, although physical stores are expected to see just modest increases over 2015—3.3%, according to the International Council of Shopping Centers—their loss prevention measures will be put to the test during what is traditionally the busiest time of year for retail shrinkage.

Types of Retail Shrinkage

According to the NRF’s survey, organized retail theft can happen at any point during the lifecycle of a product. Here are some of the most common forms of retail shrinkage to be on the lookout for in 2016:

  • Gift Card Scams – These occur when thieves return stolen items for store credit, most often a gift card. Thieves can then resell those cards online through secondary-market websites.
  • Shoplifting – Designer clothing, high-end handbags, electronics and children’s toys are some of the most popular shoplifting targets. When criminals work together, such as in coordinated shoplifting attacks, the losses are even greater.
  • E-fencing – This newer form of crime refers to sales of stolen goods online, including on classifieds or auction websites.
  • Cargo Theft – These organized thefts occur before products even reach the store, for example from the warehouse or even in the form of a truck hijacking.

…retailers will have to be extra vigilant during the busy shopping season

Stepping Up Against Organized Retail Crime

Projections from Checkpoint Systems, a provider of specialty label and packaging solutions, have US retail shrinkage in the fourth quarter of 2016 nearly doubling that of the previous two quarters. In other words, retailers will have to be extra vigilant during the busy shopping season.

The NRF recommends that retailers take the following steps to improve their loss prevention results at their stores, especially against organized retail crime:

  • Invest in proper training of employees so they understand how to recognize and report potential crimes. This includes temporary staff brought on to help with the seasonal rush;
  • Install video surveillance systems with analytics capabilities;
  • Equip products with censors or other individual safeguards (such as the LCBO’s investment in bottle locks with microchips to prevent thefts of spirits).

Other steps you can take to boost retail security include organizing your store’s layout to prevent blind spots and keeping the most valuable or targeted products closest to checkout.

axis surveillance kits for small business

AXIS M10 video surveillance kits are designed specifically to support the loss prevention efforts of small and medium-size businesses, including retailers.

A locking cabinet can allow you to display your product while keeping it well protected. For added security and accountability you can install cabinet locks that come with event auditing and integrate with an access control system.

How We Can Help

There’s no denying that organized retail crime is becoming more sophisticated and more common. But that just means retailers have to be more creative in their approaches to stop it.

From small business surveillance kits and showcase locks to exit alarms and wireless security systems, our retail loss prevention products are designed help your store fight back against shrinkage all-year round.

Contact ABC Security to learn more about our lineup of effective, scalable and user-friendly products from the most trusted names in retail security.

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