Each year, the scourge of organized retail crime (ORC) worsens, and retailers say that ORC now results in more than $30 billion in yearly losses. The security industry should become more aware of the impact of the spread of ORC across the country. Simply put, retailers consider ORC to be their most significant security problem.

ORC is the coordinated theft of mass quantities of retail merchandise that is later sold on the black market. The professional gangs behind the crimes travel from state to state, making them difficult to catch and prosecute. They usually target household items such as over-the-counter drugs, personal electronics, batteries and baby formula. The stolen merchandise is then sold through the Internet, flea markets, pawn shops and other mediums. ORC results in higher prices for consumers and an estimated $1.6 billion in lost state sales tax revenue each year.

Hodge-podge of Laws

Unfortunately, federal law does not address the devastating impact of organized retail crime.
When these sophisticated criminals are apprehended, they are typically prosecuted under state shoplifting laws that treat their crimes as misdemeanors. Retailers have also noted that ORC gangs’ online presence, which allows them to “e-fence” goods anonymously and across state lines, makes a federal solution necessary. The patchwork of state laws intended to increase penalties for ORC, meanwhile, can have an unintended effect on states that have not enacted such statutes, a point underscored by the Retail Industry Leaders Association (RILA) in testimony before the California legislature last June.

For these reasons, the Coalition Against Organized Retail Crime, a group that represents corporations and associations in the retail industry, has been working with key members of Congress to pass legislation that would combat this growing epidemic. Last summer, Sen. Richard Durbin (D-Ill.) introduced S. 3434, the “Combating Organized Retail Crime Act of 2008,” which would make organized retail crime a federal felony and provide additional tools to law enforcement agencies that are investigating and prosecuting ORC gangs.

Congress Considers a Big Step Forward

Durbin, who is close to President Barack Obama in an alliance that could help his bill’s prospects, said the legislation would be “a big step forward in the fight against a nationwide problem.” Similar bills have been introduced by Rep. Brad Ellsworth (D-Ind.) and Rep. Bobby Scott (D-Va.), chairman of the House Judiciary Committee’s Crime, Terrorism and Homeland Security Subcommittee.

Combating organized retail crime requires a public-private approach.

Federal legislation would complement the efforts of the security and retail industries to crack down on these criminal rings. In testimony before Congress last year by Target and the Coalition Against Retail Crime, it was noted that retailers spend approximately $12 billion annually to address this problem through such means as video analytics and remote monitoring. A 2007 report by the University of Florida Gainesville on retail security and retail crime estimated that 88 percent of retailers were using live, visible security video technology and that 23 percent of those retailers planned increased use in 2008.

Congress must act quickly to address the enormous problems, losses and threats to public safety caused by organized retail crime. Legislation to make ORC a federal felony, combined with increased use of electronic security equipment by retailers, could help to thwart this growing national problem.