We’ve become all too familiar with the social media videos capturing a shoplifter running out of the store with a haul of baby formula, razor blades or detergent as retail associates look on. 

Most often, these crimes are carried out by individuals, seizing a quick opportunity for personal financial gain. Increasingly, however, retailers and policymakers say they’re fighting something bigger: organized crime groups conducting highly sophisticated operations to seize large quantities of merchandise that can be used to benefit the group, or potentially funneled to criminal and militant groups around the world.

According to the National Retail Federation, organized retail crime (ORC) is “the large-scale theft of retail merchandise with the intent to resell the items for financial gain. ORC typically involves a criminal enterprise employing a group of individuals who steal large quantities of merchandise from a number of stores and a fencing operation that converts the stolen goods into cash.”

While one-off prosecutions of opportunistic shoplifters may deter some retail crimes, bringing low-level shoplifters to justice will not deter or solve the larger-scale problem of organized retail crime. And retailers can’t combat this trend alone because a single company simply doesn’t have the full picture of how these groups operate, what products they focus on, or the ability to prosecute both the high- and low-level offenders. However, more robust technology tools and analytical techniques are becoming accessible to corporate security professionals to give retailers the ability to push the needle on combating organized retail crime.

Just how organized is ORC?

Organized retail crime has been a significant problem plaguing retailers and manufacturers for many years, but experts say ORC groups have grown significantly in recent years. A report from the Association of Certified Anti-Money Laundering Specialists (ACAMS) provides a fascinating and comprehensive overview of the structure and complexity of these networks.

In the popular imagination, stolen goods are sold through a middleman who buys them cheap from thieves. ACAMS shows that retailers are dealing with organizations that are far more sophisticated. ORC groups have complex operations to disguise and repackage stolen goods, warehouses to store the goods, strategies to re-integrate stolen products into legitimate or semi-legitimate markets, and money laundering techniques to disguise the profits. 

This is, in short, big business — with everything that big business entails: employees, managers, executives, assets and business records.

And the problem is growing: according to the National Retail Federation’s 2022 National Retail Security Survey, retailers experienced a 26.5% increase in organized retail criminal incidents over the previous year. Alarmingly, eight in 10 surveyed retailers reported that the violence associated with these incidents had also increased in the previous year.

The groups can also work across state and national borders. Transnational groups have a history in retail crime that often goes unnoticed. In 2019, for example, law enforcement officials in South Florida uncovered a shoplifting ring that made off with $100,000 per week in goods, shipping some of it to Cuba.

A change in strategy

What’s more, it’s becoming clear that common strategies to stop shoplifting, like deterrence, aren’t as effective as they once were. ORC groups aren’t scared of cameras. Perpetrators continue loading their bags even after someone tells them they are being filmed. Along similar lines, it’s not rare for them to ignore uniformed security officers.

A new strategy is needed to combat the more sophisticated and organized nature of the present threat.”

Fred Burton

And even if the shoplifters themselves are prosecuted, it does little to dismantle the larger criminal network. In many cases, the actual shoplifters are little more than rank-and-file “foot soldiers” working for the criminal organization, sometimes called “boosters.” Those who are caught can be easily replaced.

Retailers and manufacturers have long been on the leading edge of many technology solutions meant to combat low-level shoplifters as well as organized crime targeting the supply chains of consumer goods. For example, retailers and transportation companies were among the first adopters of radio frequency identification technology, or RFID, used to track and locate high-value shipments in transit to and from retail distribution centers. On a more local level, it’s nearly impossible to visit your favorite retailer without seeing other technology that’s been deployed on a store’s front lines to deter theft, including security cameras and metal detectors.

While these measures have been successful in countering many opportunistic personally-motivated shoplifters, a new strategy is needed to combat the more sophisticated and organized nature of the present threat.

Three possible solutions

Even though retailers don’t typically have the ability to carry out large-scale investigations of multinational criminal organizations, they often have access to information and analysis that can help law enforcement and others within the industry see the bigger picture of organized retail groups, and understand how they might be thwarted. However, that information needs to be harnessed in a more usable format to become useful to address the problem.

As technology improves, consider these three new avenues.

First, retailers can invest in technologies that can coordinate all of the information they already have available. If a retailer is already heavily invested in camera technology and employs the use of license plate readers, it may be possible to integrate the information into their technology system. Synthesizing and analyzing the information a team already has can often yield dividends in terms of both investigation and prevention. Case management and investigations solutions with improved data collection and analysis can be implemented on a national level when appropriate to separate signals from noise, while cross-functional workflow capabilities will help investigators identify patterns in stolen merchandise, informing both mitigation strategies and recovery.

Second, corporate security teams, especially including internal investigators and analysts, need training to leverage newly developed open-source tools. This could include dark web listening techniques and monitoring of forums that can be used to track stolen goods and later fencing those goods into more legitimate business fronts. Open-source tools can help teams to quickly surface relevant, critical signals from multiple sources, creating the ability to coordinate a proactive response when critical information is uncovered.

Lastly, retail security teams should continue to build partnerships with other industry stakeholders and local and national law enforcement entities, leveraging these engagements to coordinate the most useful means of information synthesis and sharing. Ultimately, retailers cannot solve the problem of ORC alone, but their inputs can be critical to building cases against the leaders of criminal organizations, helping to stem the more sophisticated and premeditated elements of retail theft.

Fighting ORC is possible, but without a holistic view of the picture and fully resourced corporate security teams and law enforcement partners, it can be an uphill battle. To get a holistic view of the threat environment and a better position in the fight, security teams need to be empowered with new technology and analytical tools and partnerships with both internal and external stakeholders.

It’s the only way to get a handle on this problem.