Nothing is more pervasive for major retailers than organized retail crime. Organized retail crime rings are responsible for financial losses of $112.1 billion to retailers, according to Daphne Howland of Retail Dive. Retailers commonly refer to these financial losses as “shrinkage.”
What Is Organized Retail Crime?
Kelly Boucher of LVT notes that organized retail crime involves a coordinated, premeditated act. The members of organized criminal groups target retail stores for financial gain and travel to different cities and states for their illicit activities.
Organized retail crime may involve a highly orchestrated attempt to identify and take advantage of stores’ weaknesses in retail loss prevention. In addition to theft, organized retail crime can involve fraudulent activities within the retail supply chain, such as refund fraud.
According to Boucher, organized retail theft may involve a flash robbery where gangs or a group of 5-100 people show up at a planned location. They overwhelm security teams because so many people are stealing merchandise simultaneously.
Boucher also notes that cargo theft is a problem that disrupts supply chains through:
- Fictitious pickups – organized crime groups use counterfeit paperwork to present themselves as legitimate drivers
- In-transit robbery – delivery trucks are robbed while the merchandise is in transit
- Trucking facilities robbery – merchandise is stolen from storage facilities by organized crime groups
- Leakage – crime groups steal small amounts of merchandise from shipments without businesses noticing the loss
Financial gain is the primary motivation of people involved in organized retail crime. Ames Grawert and Ram Subramanian of the Brennan Center for Justice note that stolen merchandise is often resold on the black market.
There are several ways to mitigate organized retail crime, including the identification of security weaknesses, hiring more security personnel, educating retail employees and improving in-store security. But since organized retail crime involves a ring of people, prosecuting under them under the Racketeer Influenced and Corrupt Organizations (RICO) Act is an effective way to hold these criminals accountable.
Using Artificial Intelligence to Combat Organized Retail Crime
Artificial intelligence (AI) can be an efficient tool against organized retail crime. For example, tech companies can utilize AI to go onto the dark web to locate and document sellers of stolen merchandise. Law enforcement should utilize private AI companies that have this capability to aid in their investigations.
Utilizing other technologies such as biometrics can also be useful. For instance, retailers should utilize biometric technology to share information on criminals participating in organized retail crime striking stores around the country. A database could be created with the biometric information of known criminals, and that database could be shared among major retailers.
How Target Uses Technology to Solve Crimes
Retailers such as Target® have sophisticated loss prevention systems and have forensic capabilities to aid in combating organized retail theft. According to Target, Target’s forensics team in Minnesota and Las Vegas uses more advanced and more high-tech technology than the forensics labs of many police departments.
Target’s forensic lab analyzes surveillance footage from within and around their stores and identifies shoplifting, fraud, and injuries that occur in the stores. The lab has been used to solve many organized retail crimes.
Retailers and Law Enforcement Agencies Need to Work Together
Ideally, retailers and law enforcement agencies should work closely together to share information about organized retail crimes and the people who commit these crimes. In addition to RICO, state statutes should provide prosecutors with effective tools to hold organized retail criminals accountable for their actions.
Target is a registered trademark of Target Brands, Inc.
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