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NRF Study Uncovers Latest Trends in ‘Dangerous’ Organized Retail Crime

A study released Thursday by the National Retail Federation (NRF), in partnership with global risk advisory firm K2 Integrity, found that organized retail crime is on the rise and its perpetrators are becoming more brazen and violent.

The data in a study released Thursday suggests that the rise in violent ORC rings has its roots in the Covid pandemic, as 15 of the 21 analyzed crime rings began operating in 2021, “which suggests the uptick in the use of violent tactics during theft operations is a recent development,” according to the report.

ORC incidents shot up by 26.5 percent in 2021, according to the study.

Only 6 of the 132 ORC groups analyzed in the ORC database between 2014-2020 used violent techniques— defined as smash-and-grab, use of firearms or other weapons, battery, flash mob tactics, or threats of violence against store employees or customers.

“The ORC industry will grow more dangerous, complex and profitable, and its illicit proceeds will fuel more organized criminal networks and operations in the United States, globally and virtually, if more concerted action is not taken to disrupt these trends,” said Juan Zarate global co-managing partner and chief strategy officer at K2 Integrity said in a press release accompanying the study.

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As trade groups like the NRF have suggested, the chief means of liquidating stolen items is through the Internet, as a review of 46 cases within the ORC database found that about 45 percent of stolen items were resold online. The true number figures to be higher, the report says, because it is difficult to account for ORC rings’ online fencing quantities, especially as more rings begin shifting to peer-to-peer trading avenues—Craigslist and Facebook Marketplace being chief—and away from third-party online sellers.

The study also expresses concern that many of these peer-to-peer transactions could turn to the dark web.

“Many peer-to-peer e-commerce sites have weak identification policies for sellers and disregard the threat ORC fencing operations pose to the integrity and reputation of their platforms,” the study says, citing an executive at a loss prevention management software company and a former ORC investigator for a national retailer.

It was to stop the easy re-selling of stolen goods on third-party sites that motivated Congress last December to pass the INFORM act, which says online marketplaces must verify high-volume third-party sellers by authenticating the seller’s government ID, tax ID, bank account information, and contact information.

“During Covid there was an increase in online retailing, online purchases and it was a visible avenue for resale of stolen goods… It’s really easy to steal and item and put it for sale online,” NRF vice president of asset protection and retail operations David Johnston told Sourcing Journal in December. “One of the challenges we’ve had is sellers can kind of hide behind anonymity online. Now, some [marketplaces] do a great job helping law enforcement, helping retailers, but there are other online marketplaces with lax policies and procedures. The INFORM Act, at the national level, helps with that.” 

In addition to the INFORM Act, groups like the NRF are also backing the Combating Organized Retail Crime Act [CORCA], which Congress has yet to take up, though a bi-partisan quartet of lawmakers re-introduced it as a companion bill from the Senate introduced by Chuck Grassley (R-Iowa) and Catherine Cortez Masto (D-Nev.) on Feb. 9. CORCA would “establish the Organized Retail Crime Coordination Center at Homeland Security Investigations, combining expertise from federal, state, and local law enforcement agencies along with retail industry representatives to create a cohesive national strategy to curb organized retail crime,” said Colorado Representative Ken Buck, one of the bill’s Republican sponsors.

“These concerns have grown in recent years, as criminal groups have become more brazen and violent in their tactics and are using new channels to resell stolen goods,” said NRF President and CEO Matthew Shay, in a statement. “NRF and its members have been forcefully advocating for the ‘Combating Organized Retail Crime Act’ in Congress because it’s time for decisive action, not just platitudes and endless debate.”

Other details in the study found that only 11 percent of ORC targets are considered luxury items, as ease of resale makes everyday goods more attractive, and electronics are the favored targets of those groups committing cargo theft.

The average ORC, the study found, fences approximately $250,000 in merchandise before being stopped by authorities.

The study also found that retailers were already keenly aware of the growing problem.

Eight in 10 that participated in NRF’s 2022 National Retail Security Survey reported that violence and aggression associated with ORC incidents increased in the past year, and a majority of the respondents to surveys conducted in 2020 and 2019 reported that ORC gangs exhibited more aggression and violence compared with the prior year, the report said.