Science & Technology

Organized retail crime losses reach all-time high — survey

American retailers reported an increase in organized retail crimes

Organized retail crime losses reach all-time high — survey. Source: shutterstock.com

Organized retail crime is continuing to grow, with nearly three-quarters of retailers surveyed reporting an increase in the past year, according to the 14th annual ORC study released by the National Retail Federation.

The report found that 92% of companies surveyed had been a victim of ORC in the past year and that 71% said ORC incidents were increasing. Losses averaged $777,877 per $1 billion in sales, up 7% from last year’s previous record of $726,351.

ORC typically targets items that can be easily stolen and quickly resold, and top items range from low-cost products like laundry detergent, razors, deodorant, infant formula and blue jeans to high-end goods like designer clothing and handbags, expensive liquor and cellphones. While online fencing has increased over the years, retailers say 60% of recovered merchandise, on average, is found at physical locations.

While at least 34 states have ORC laws, 73% of retailers surveyed support the creation of a federal ORC law, noting that ORC gangs often operate across state lines.

The country’s largest cities are the most frequent targets of ORC. The top locations are New York City; Los Angeles; Miami; Chicago and Houston, tied; San Francisco/Oakland; Atlanta; Baltimore; Orlando; northern New Jersey, Washington, D.C., Philadelphia, and Arlington/Dallas/Fort Worth, tied; and Fort Lauderdale and Seattle, tied.

Return fraud continues to pose a serious threat to the retail industry. Retailers estimated that an average 11% of their annual sales will be returned this year and that 8% of those returns are likely to be fraudulent. An estimated 12% of returns will not include a receipt, and 21% of those are expected to be fraudulent.

During the holiday season, retailers expect 11% of sales to be returned, on average, down from 13% last year, and that 10% of the returns will be fraudulent, down from 11% last year.

The survey of 66 loss prevention professionals representing department store, big-box, discount, drug, grocery, specialty retail and other industry sectors was conducted September 16 through October 5.

SEE ALSO: Fraud still retailers’ top payment issue – research

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