ASIS Foundation Publishes New Report on Organized Retail Crime

By Matthew Harwood

Every year, organized teams of thieves steal billions of dollars of merchandise and then resell the goods back into the above-ground marketplace.

In a new CRISP report for the ASIS Foundation, authors Walter E. Palmer, CPP, CFI, CFE, and Chris Richardson, CPP, provide a general primer on the practice of organized retail crime (ORC) so retailers can understand why they may be more susceptible to it than other retailers and what they can do about it.

What's interesting about the phenomenon of ORC is that it's nearly impossible to accurately calculate how much ORC rings take from U.S. retailers every year.

According to Palmer and Richardson:

For many reasons, it is impossible to precisely identify the total cost of ORC, but it is clear from high-profile cases, survey data, and individual retailers’ experiences, that it is a significant issue warranting attention from retail, law enforcement  agencies, and legislators. According to the National Retail Federation’s 2008 Organized Retail Crime Survey, 85% of the 114 retail security executives surveyed indicated their companies were victims of some type of ORC activity.

Depending on the source, ORC costs the retail industry anywhere from $9 billion to $35 billion annually. Obviously, one thing is clear: it's a lot.

ORC, however, doesn't just affect retailers, but U.S. consumer safety and national security as well, note Palmer and Richardson.

Goods such as baby formula and over-the-counter and prescription drugs are among the many goods that could harm, and kill, consumers if they've been tampered with, relabeled incorrectly, or stored improperly. There's also a potential link between ORC and terrorism. Law enforcement agencies, including the FBI, suggest that profits from ORC have been funneled to the Middle East to finance terrorist operations.

So what are retailers to do?

In a word: cooperate, a rather new, but necessary, development, explain Palmer and Richardson

ORC information sharing among retailers and law enforcement was nearly non-existent until 2007. If a retailer experienced a theft, they would notify their other chain stores in the local area, possibly someone at the corporate office, and law enforcement. There was not a systematic way to share this information with their entire chain, other retailers outside their geographical area, and other law enforcement agencies. This allowed ORC to grow without any concerted effort from retailers or law enforcement.

In 2007, the retail industry in association with the Food Marketing Institute and the FBI launched the Law Enforcement Retail Partnership Network (LERPnet), a web-based, secure portal to share information with each other. The network currently has 55 retail companies that subscribe to the database and over 31,000 incidents logged.

"Communicating and partnering with law enforcement, other retailers, and retail industry associations to share information, to collaborate in investigations, and to identify trends is paramount in the fight against ORC," write Palmer and Richardson.

The ASIS Foundation's CRISP reports draw on research and evidence from around the world. Each report summarizes the prevailing knowledge about a specific aspect of security, and then recommends proven approaches to counter the threat.

♦ Photo by roebot/Flickr


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