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Organized Retail Crime Survey 2011

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NRF will address organized retail crime and many other loss prevention issues such as return fraud and counterfeiting at its annual Loss Prevention Conference and EXPO.


The National Retail Federation’s Organized Retail Crime survey, now in its seventh year, is conducted every spring to gauge the impact and severity of organized retail crime. This year’s survey collects information from a variety of retailers, ranging from restaurants to department stores to specialty retailers and grocery stores. Insights of senior retail loss prevention executives from 129 retail companies are included in this report.

Organized Retail Crime Grows, Criminals Becoming More Violent
This year’s survey found that organized retail crime affects almost every single retailer, with 95  percent reporting they have been a victim of organized retail crime in the past 12 months, up six percent from last year. Although retailers continue to build their defenses against this growing problem, criminals are finding myriad ways to work around the system. Retailers are also reporting that the criminals they apprehend are increasingly resorting to violence, putting the safety of both associates and customers at risk.

Cargo Theft Poses Major Problem for Retailers
The scope of most criminal enterprises extends far beyond store limits. For the first time in the survey’s history, NRF polled retailers about this threat and found that nearly half of all respondents said they have been a victim of cargo theft within the past year. The survey found most cargo theft occurs en route from the distribution center to the store, but other points within the supply chain are just as vulnerable. This not only affects a retailer’s bottom line, it also affects what consumers end up seeing on the shelves at the store and the amount of inventory available.

Top Cities Impacted by Organized Retail Crime
Crime rings throughout the country often take advantage of big cities and large highways to move their stolen merchandise and hit multiple targets. When asked where in the United States retailers have the most problems with criminal gangs and organized retail crime, cities including Los Angeles, Miami, New York and Dallas were listed. Making the list for the first time, Las Vegas and Phoenix are now among the top 10 metropolitan areas retailers say are affected, indicating criminal enterprises continue to travel the country. Many times, retailers and law enforcement officials find it difficult to track these crime gangs because they cross state lines in a matter of hours. New technologies, however, are beginning to play a vital role in tracking thefts and criminal behavior even through various states and at different retail companies.

Awareness and Allocation of Resources
As the economy forces retail executives to pay close attention to every line item in their budgets, loss prevention executives say senior leadership is more likely to understand how organized retail crime impacts the company’s bottom line. This year’s survey found nearly six in 10 senior loss prevention executives say their senior management understands the severity of the problem, a big step up from the 39 percent reported in 2005. As a result, many companies are allocating additional resources – including more personnel and greater investment in technology – to combat the problem.

Retailers Identifying More Fence Locations
Organized crime gangs who steal consumer and other valuable goods such as over-the-counter medicines, baby formula, diabetic testing strips and designer jeans, often use the façade of a local pawn shop, flea market or warehouse to hide their stolen merchandise. These criminals also pose as legitimate sellers on online auction sites, selling their stolen goods to innocent and unknowing consumers. The report found more than seven in 10 retailers identified or recovered this stolen merchandise from both physical and online fence locations. Industry partnerships with law enforcement and increased resources in personnel may have contributed to the increase in identifying these stolen goods. The increase in the number of retailers who have been victimized may have played a role as well.

Legislative Efforts
Retailers have spent years lobbying Congress about the need for specific organized retail crime legislation. Specific lobbying interests include stiffer penalties for criminals involved with organized retail crimes, expanding law enforcement’s ability to charge and prosecute offenders and decreasing the felony dollar amount threshold at which criminals are charged. Though retailers recently celebrated the passing of H.R. 5932, the Organized Retail Theft Investigation and Prosecution Act of 2010 in the House of Representatives, which aims to establish the Organized Retail Theft Investigation and Prosecution Unit with the Department of Justice, budget crises and several other pressing issues prevented this bill from being presented to the Senate. Several states have engaged the issue through state legislation and many have already seen success. The report outlines which states have already passed bills and those that are currently working on bills.

Through various platforms, retailers are able to communicate and network with industry peers about the challenges organized retail crime presents for their business and how to combat the multi-billion dollar problem. These platforms include national committees, local intelligence sharing groups, partnerships with local, state, and federal law enforcement, and relationships with lawmakers. Together, retailers and law enforcement officials are making great strides in uncovering the criminal enterprises that exist throughout the country. These collaborations have resulted in many successful federal indictments and the breakup of large crime rings, which operated for years behind physical and online fence operations. 

From government affairs and strategic partnerships to grassroots initiatives, retailers have been very resourceful in finding ways to confront the issue. Efforts to pass federal legislation persist and work continues behind the scenes as executives from different companies come together to shed light on this growing problem.

ORC 2011 - How Retailers Have Been Impacted by ORC