Survey: Retail Crime Increasing With Economic Downturn

A survey conducted of America's largest retailers reports an increase in retail crime associated with an economy in distress, said the Retail Industry Leaders Association (RILA).

As a follow up to the December Crime Trends Survey, RILA asked retail loss prevention professionals to report measured or perceived changes in crimes against retailers over the last four months. Respondents included 32 of the largest and most successful retailers in the U.S., from all segments including grocery, mass merchant, specialty store, apparel, electronics and appliances and fabric and craft retail.

The RILA Crime Trends Survey, presented recently at the RILA 2009 Loss Prevention, Auditing & Safety Conference in Orlando, Fla, reports continued growth in amateur or opportunistic shoplifting events, financial fraud, robberies and burglaries as well as large increases in organized retail crime (ORC) across all retail segments.

  • 61 percent of retailers surveyed report having experienced an increase in amateur/opportunistic shoplifting in the last 4 months.
  • 55 percent have experienced an increase in financial fraud.
  • 72 percent of respondents report that they continue to see an increase in organized retail crime (ORC).
  • No retailers reported a decrease at all in amateur/opportunistic shoplifting since last surveyed.

Retailers also report upward trends in regions not typically prone to such increases. Complex cities and highly urbanized states are often the first to display increases in unlawful activity. However, survey results show that increases have permeated beyond these regions and onto a number of non-traditional and rural areas.

"These crimes present unwelcomed challenges to retailers and communities of all sizes," said Paul Jones, vice president of asset protection.

Trends indicate that instances of organized retail crime (ORC) activity also continue to grow. ORC, which is estimated to cost retailers tens of billions of dollars annually, involves sophisticated crime rings that steal and stockpile stolen merchandise; eventually selling the stolen goods to buyers usually unaware of the item's pathway to market.

Stolen merchandise is sold through flea markets, swap meets, pawn shops and increasingly through internet auction sites. Unlike simple shoplifting or other crimes of opportunity, ORC growth is less likely to decline on its own as the economy improves. The criminal enterprises associated with ORC become reliant on the revenue derived from the commission of this crime. The increase in ORC is particularly troubling as these criminal enterprises often use the proceeds derived from ORC to fund additional crimes.

"These trends confirm that retail criminals are seeking to capitalize on the current economic climate to expand their activities,” Jones said. “Their resulting ability to fund other crimes should be a concern to everyone.”

The reported increases in retail crime come despite an extraordinary investment and effort by the industry to prevent these crimes. The Global Retail Theft Barometer, published by the Centre for Retail Research, estimated U.S. retailers spent $11.799 billion in 2007 on loss prevention efforts.

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