Organized retail crime (ORC) continues to be a thorn in the side of merchants everywhere. In the latest high-profile example of retail theft, New York State officials indicted 12 people for stealing $12 million in merchandise from various major retailers and reselling the products on Amazon and eBay. Retail stores affected included Staples, Best Buy and Office Depot locations in NYC, as well as stores in 27 other U.S. states.
The RTP team discusses whether retailers and brands should consider partnering with major marketplaces such as Amazon and eBay to keep a better eye on what’s being resold on these sites, and whether they should allocate more of their budget toward in-store security and in-store/online loss prevention measures.
Debbie Hauss, Editor-in-Chief: As we’ve seen with data security, it’s hard to get ahead of criminals who spend all their time coming up with new ways to hack the system. The same goes for organized retail crime (ORC). The facts are clear: in a survey of retail loss prevention executives, the NRF found that 100% had experienced ORC in 2016, up from 97% in 2015. It’s both a physical and digital crime that is gaining momentum. And the significant losses from ORC affect every taxpayer, so it shouldn’t be taken lightly. While working with vendors, partners and law enforcement to minimize these crimes, retailers also should be working to educate consumers. There is definitely something to be said for the saying, “If it seems too good to be true, then it probably is.” If you’re getting your over-the-counter drugs at a 75% discount at your local flea market, then they’ve probably been stolen.
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Adam Blair, Executive Editor: If your mental image of retail crime is the naughty-but-lovable frat boys of Animal House stuffing food into bulky sweaters to get past the supermarket checkers, it’s as out of date as the hairdos in the movie itself. Organized retail crime is, well, organized. One of the reasons the New York City-based theft ring was able to allegedly steal $12 million in merchandise is that its leader directed his crews to “boost” specific items based on their resale value. Perhaps retail CEOs need to make it a stated goal to cut their theft losses by at least 50% in the next fiscal year — and then to invest enough in training and loss prevention to make that goal a reality.
Tim Parry, Managing Editor: I think this is a case where organized crime can be better defended in the digital world than in the physical one. Store security is limited in its jurisdiction (and sometimes in store coverage capabilities), and would have to catch a suspect in the act while the suspect is still in the store. But manufacturers can work with the marketplaces to deter the sale of stolen merchandise. The marketplaces can make merchandise resellers enter a manufacturer authentication code as part of the listing process. In theory, this should authenticate the items being listed and prove that the reseller is not listing stolen goods.
Klaudia Tirico, Features Editor: The retailers affected by the recent ORC scandal should take these unfortunate events and use them to their advantage. Talk to customers and notify those who are shopping online of what has happened on the home pages of your web sites. If there are no reliable vendors selling your product on Amazon, let customers know they should not rely on the site to get authentic items. These scandals also affect the credibility of Amazon and eBay, so I’m sure they would be willing to work with retailers to keep organized crime away. My big piece of advice is to turn lemons into lemonade in order to ensure something like this doesn’t happen again. If you’re a retailer that has been affected by ORC, don’t hide in the corner; take a sour situation and figure out how to turn it into a positive for your business and your customers.
Glenn Taylor, Senior Editor: This is one of the toughest situations retailers have to deal with, considering cybercriminals and traditional thieves alike seem always to be a step ahead of the game. No loss prevention measures are ever going to be 100% effective, but it will come down to how much the retailer feels their initiative is worth the time and money that’s invested. In the case of the $12 million heist, I’d like to know about the RFID tracking systems within the affected stores, or if there even was a strategy in place for this at all. Since people were able to just walk out with electronic items under their vests because they could deactivate the store alarm, that’s a major indication of those stores’ weak points. If the technology used to prevent the theft can simply be “shut off” at a convenient time, then the retailer probably hasn’t studied the anti-security measures nearly as closely as they should have in the first place.
