How NOT to Investigate Organized Retail Crime

Organized retail crime investigators offer recommendations on how NOT to approach the problem.

organized retail crime

According to the National Retail Federation’s (NRF) 2016 Organized Retail Crime Survey, all responding retailers said that they believe their companies to have been the victim of organized retail crime (ORC) activity within the past year. Eighty-three percent of those respondents believe that ORC activity has increased in the past year as well.

Major stakeholders in the fight against organized retail crime agree that it’s a major problem that needs addressing.

Is Organized Retail Crime Just Shoplifting with a Sexy Name?

A few years ago, Laura Baverman, former columnist at The Cincinnati Enquirer took an in-depth look at organized retail crime in an article that was picked up nationally by USA Today. In the 2011 article “Retailers Reining in Sophisticated Theft Rings,” Baverman reports, “This [ORC] illegal activity is nothing like shoplifting, an opportunistic crime by one person.” She quotes Detective Brian Kane of the Covington Police Department, referring to people that make up organized retail crime rings, “It’s a job. They get up in the morning and that’s what they do.”

But there are still a few in the industry who lump stealing retail goods–no matter what happens after the theft–as shoplifting with a sexy name. “Back in the old days, you didn’t have labels like ‘ORC.’ You just had people stealing stuff,” said an LP professional with more than forty years’ experience. “Stopping the opportunist and stopping the ORC professional comes down to the same principles we all know and implement—customer service, employee awareness, and having solid prevention techniques across the board.”

The divide on this particular debate seems to be closing. “It really took people like Paul Jones and King Rogers talking about organized retail crime on a larger scale to start getting the industry to take notice and differentiate ORC groups from the average opportunist,” said Joe LaRocca, former senior advisor of loss prevention for the NRF.

This post’s findings are the result of more than thirty retail and law enforcement interviews expressly asking for opinions and thoughts on the topic. It does not represent the author’s opinions, personal views, or experience on the subject.

In general, the interview responses led to these five recommendations of how not to investigate organized retail crime. Don’t…

  • Go in cold to law enforcement and ask for help.
  • Hand detectives a loose-leaf folder of papers.
  • Stay in your office.
  • Take the law into your own hands.
  • Ignore your role in the problem.

Don’t Go in Cold to Law Enforcement and Ask for Help

Going in “cold” to law enforcement and asking for help is like showing up for a blind date with an engagement ring; it only makes sense if you’re desperate, and you probably won’t be successful.

When talking with law enforcement personnel, they readily admit that taking property-crime cases to prosecution isn’t their top priority. “District attorneys never really want to prosecute property crimes because it is the lowest on the priority list,” says a FBI representative who works with organized retail crime cases. “Let’s face it. They are dealing with terrorism, major white-collar crime, as well as homeland security issues. There is only so much time in a day.”

But for heads of ORC task forces or LP professionals responsible for making a dent in their company’s theft problem, the industry needs law enforcement partnerships to prosecute successfully.

“The biggest mistake LP professionals can make is going in cold and unprepared to law enforcement,” advised David E. Zulawski, CFI, CFE, chairman and senior partner at Wicklander-Zulawski & Associates. “A great way to build these relationships is to start with a mutual contact to make an introduction.”

“I have been on both sides—law enforcement and retail. It comes down to collaborating together because sharing and learning from each other are key components to success,” said Mark McClain, CFI, former director of global investigations for Walmart. “It’s important to find common ground and set the stage for a long-term mutually beneficial partnership. Don’t show up just when you need something. Get involved and support local community events because the more you’re involved, the more people will be aware of your commitment to solving the overall crime problems, not just those that interest your company.”

Minia Morales, once a divisional LP manager for Rent-A-Center, believes educating law enforcement on organized retail crime is critical when starting to build the initial relationship. Morales points out that there are still some law enforcement agencies that don’t fully understand the scope of the problem and believe the ORC problem is just petty shoplifting. “Law enforcement doesn’t see the value of working with retail loss prevention and our backgrounds, but it is incumbent on us to educate them on behalf of the profession,” said Morales. “This education helps build the partnership you need when conducting an investigation. Having a preexisting relationship and level of comfort goes a long way and helps achieve results.”

Morales added, “It’s not one-sided. We need law enforcement as much as they need us. And it’s not about ego. It’s about a partnership built on respect and mutual trust. If you have to conduct trash pulls, stationary surveillance, and inventory recovered product, just do it. This is a partnership and retailers should be sincere partners in fighting crime, not drawing lines on what we won’t do to advance the investigation.”

Every retailer interviewed for this post emphasized building solid relationships with law enforcement. This is not a new topic in the organized retail crime discussion, but it was interesting the lengths that retail ORC task forces must go to increase the odds of successful prosecution or for law enforcement to even take the case.

“It’s a constant battle to combat the perception with many police departments that ‘retail never prosecutes,'” said Jason Adams, CFI, former national manager of organized retail crime at GAP. “GAP Inc. is very consistent with prosecution. But as retailers we have to do our part to make it a priority and an easy next step for our law enforcement partners.”

Adams added, “It’s always our preference to present gift-wrapped cases on a silver platter to our law enforcement partners. We have strict guidelines on when and how to partner with law enforcement. Every police partner is so critical that we try our best to do everything we can to make their jobs easier.”

The law enforcement-retail partnership is seemingly a fragile relationship at times. While retailers must engage these vital partners, it definitely changes the rules once they are involved. Retailers must be able to engage these law enforcement contacts and trust them with their multiple weeks, months, and often year-long investigations because once they are involved, it changes the rules immediately.

“While it is important to engage law enforcement as early as possible in the process, we have to be mindful that it changes the rules,” said Brad Dykes, former director of loss prevention for Cabela’s. “I would definitely bring them in early rather than risk not having the necessary information when it comes to prosecution.” One of the benefits of involving police early is law enforcement’s leverage for potentially turning a suspect into an informant.

“If you start a case and decide to operate independent of police, that may be a good thing or bad thing depending on the police contact,” said Zulawski. “You need to ensure your contact can see the whole picture and isn’t going to feel you are stepping on his toes.” Zulawski points out the importance of knowing your police contact. Some officers might not mind being brought in on the tail end of an investigation while others want to know what’s going on from the beginning.

Rich Milburn, CFI is a twenty-year veteran of law enforcement working on organized retail crime cases with retailers. He offered a different perspective, but agrees that bringing in law enforcement changes the rules.

“It’s true that retailers must bring cases to law enforcement on a silver platter,” confirmed Milburn. “They must have everything documented soup to nuts. But the retailer needs to know the detective is already well-versed in organized retail crime, or it is a waste of time. Retailers must be aware that once they drop that case file into law enforcement’s hands, it changes the rules so everything better be complete.”

Mike Battles, CFI, former regional LP manager for Stage Stores, added, “The bottom line is we can’t accomplish what either one of us want—successful prosecution—without the other. Sometimes it takes the retailer educating the police about updated changes in legislation. Our laws can change quickly and could have important impact on your cases. Don’t rely on the police to always be up-to-date on every legislative change simply due to the sheer number of new laws passed each legislative session.”

Don’t Hand Detectives a Loose-Leaf Folder of Papers

We’ve all seen him—the totally unorganized coworker with mustard on his shirt, hair a mess, who looks like he just woke up. Would you trust that coworker with your most delicate project? Probably not. The same principles apply when working with law enforcement: organization rules.

“If you show up and throw a loose-leaf folder on their desk and expect them to jump at your case, you will not be very successful,” said Adams. “Also, don’t expect them to drop their entire caseload to immediately go over your investigation. Being proactive, making an appointment, and being cognizant of the volume of work that they are tasked with is very important.” As we continue to educate the law enforcement sector on how professional retail LP people are, it’s paramount that we are diligent when it comes to documentation, organization, and thoroughness.

“Presenting your case to law enforcement is a make or break phase of the investigative process,” explained Adams. “It’s critical to ensure the presentation is organized and essentially gift-wrapped for your audience.” Adams always equipped his case files in chronological order with:

  • Case summary—the what, when, how, why of everything that has happened in summation style,
  • Internal reports filed depicting the case,
  • Police reports filed,
  • Witness statements,
  • Video evidence,
  • Investigative notes, and
  • Suspect information sheets.

“As LP professionals, we need to understand how over-burdened police are with current case loads,” added Adams. “Put together the case in a structured way that truly conveys the financial loss, the safety implications, community impact, and, if applicable, any other crimes that are above and beyond the retail variety, such as human trafficking and drugs.”

In addition to the case file documentation, it’s always important how you put that file together. In most cases chronologically is the best way to go according to ORC task force leaders. Mike Battles recommended compiling two case files: one case file to present to law enforcement and another to continually update with appropriate information that can be used to periodically update law enforcement’s copy so each file is comprehensive and up-to-date.

A twenty-year industry veteran, Battles organized his case files chronologically by known incidents and separated into sections:

  • Summary and table of contents,
  • Photos when possible,
  • Police reports,
  • Known loss reports with amounts,
  • Inventory lists,
  • License plates and suspect pedigrees, and
  • CD sleeves for video evidence.

The information in these case files should tell a compelling story, explaining the details, suspects, and incidents leading to the logical next step of action by law enforcement.

“Try to demonstrate the full loop of the crime,” said Debra Lussier, senior manager, central investigations team, for The Home Depot. “It is helpful when the full loop of the crime is demonstrated through reports, video clips, policy examples, et cetera. Resources are very slim for law enforcement, so retailers must make the link from relationships and suspects to dollar amounts and impact to your community so they accurately present it to their superiors.”

“A great example is when our team helped educate law enforcement on UPC switching,” explained Lussier. “At first glance, the transaction seems legitimate. But when we’re able to present all the supporting documentation, they understand, and it makes total sense to them.”

Organization of the details is of utmost importance, but according to Mark VanBeest, CFI, former director of investigations at JCPenney, timing is also critical. One of the worst lessons to learn is not having your case information organized and ready when your suspect is detained…and they end up walking away uncharged.

“Organization and case preparation is key,” explained VanBeest. “Your case file must be presentation ready at all times. You never know when it might be time to convey all necessary information in a succinct way if you catch a break in your case or suspect is in custody.”

Not only is organization important, it’s important to understand how law enforcement writes reports and why.

“We are taught to write reports on a fifth-grade level so everyone can understand what occurred,” said retired law enforcement officer Milburn. “Keep complicated policies simple so when detectives need to translate it to a prosecutor, it can be understood and ultimately communicated to a jury or judge.”

“Loss prevention investigators should make sure that law enforcement is presented with all the pertinent case facts organized in a clear and concise manner so that all that is left to do is act,” said Adams. “Remember every interaction with law enforcement shapes future interactions, and if you show up with too many folders, you probably won’t garner much future support.”

Don’t Stay in Your Office

Loss prevention professionals are not salespeople—or are we? To investigators, the idea that they are in a sales role is like the sound of nails on a chalkboard. But essentially, all LP professionals are in sales—especially organized retail crime investigators trying to make friends with law enforcement, prosecutors, and other retailers.

Yes, your office is nice and cozy. You can see all your stores via remote monitoring. But are you serving your ORC efforts best by staying in your little domain? Probably not according to the retailers and law enforcement representatives interviewed. Their advice is to get out into the community, shake some hands, meet people, share information, and support your company by supporting your community.

“LP investigators should pretend they’re in sales because good networking can build relationships to help solve crime in the community as a whole, not just for your organization,” said Dave Zulawski.

A fantastic example of networking and building relationships in their community is the work that Stage Stores has done. “Stage Stores hosted their own networking meetings twice a year,” explained Battles. “At the first one, we had twenty people attend. That number grew to more than 130, including area LP professionals, local, federal, secret service, and even postal inspectors in surrounding jurisdictions. People were able to meet, get contact information, and understand each other’s problems so we can help each other as a community. It’s not about just retail. It’s about supporting your community as a whole. There is no better way to make those connections than in person.”

According to Battles, “These events help educate law enforcement on our level of professionalism and our commitment to fighting crime. They will only know that by meeting us in person, attending networking events, and getting involved with online communication boards and email distribution networks. These initiatives help broaden your contacts so you can learn which detectives and others already support fighting organized retail crime.”

“Networking is key,” said Milburn. “If you attend a networking function and aren’t meeting someone you don’t know, you’re wasting your time. It’s always helpful to place a call after you’ve met them face-to-face and exchanged business cards.”

Networking in person is not the only way to broaden your ORC efforts. Sharing data is also extremely important to the overall organized retail crime conversation. Numerous local ORC groups have become successful in recent years, with attendance growing exponentially each year. There are national information-sharing databases as well.

“Information-sharing systems help identify national trends and enable us to work more efficiently at the national level by helping us tie cases together,” explained VanBeest. “We also believe it vital to our efforts to network with local groups to share data. Sharing data at the grassroots level gives retailers a more eye-level look at organized retail theft groups where most investigations are initiated.”

Networking and sharing information are always valuable tools. To take that strategy a step further, JCPenney implemented a shared practice among other retailers that helps law enforcement contact them directly with no middlemen.

“Another important step retailers can take is something we implemented from our friends at Walmart,” said VanBeest. “We created a for-law-enforcement-only email address and phone line. So no matter what law enforcement needs, whether it is local, state or federal, all they have to remember is one email address and one phone number. This direct line of communication goes straight to our investigations team, so we can respond very quickly. I would recommend this for any retailer because it’s been a valuable tool for relationship building with detectives and police regardless of jurisdiction.”

Don’t Take the Law into Your Own Hands

As an industry, LP professionals are often caught in the proverbial catch-22. After budget season concludes, they are often left asking themselves pointed questions such as:

  • How do I maximize resources for my increasing responsibilities without sacrificing quality work?
  • If I’m responsible for shrink, audit, safety, and internal theft, how can I get everything done with a smaller team?

In some instances, these types of questions lead to LP investigators stretching that envelope a bit too far, even crossing into law enforcement’s domain. According to those interviewed, instances of LP people going “rogue” have definitely declined over the years as organized retail crime legislation has passed and task forces formed with accompanying policies. But there was also plenty of evidence that it still occurs, although little agreement on what “going rogue” truly means.

“When it comes to LP people taking the law into their own hands, I think that it’s important that LP understands relevant laws so they don’t violate any that would compromise the investigation,” said Morales. “There are many different companies with varying policies and procedures. For instance, at one company you’re not allowed to conduct trash pulls, at another that’s okay because once it is abandoned on the curb, it’s public property. Of course, you always have to think safety first, and it is my preference to partner with law enforcement on everything we do because it makes the most sense.”

Morales concluded, “In my opinion, examples of rogue activity would be risking their safety by speeding through red lights following a suspect, taking pictures through windows of a private residence, or using a certain type of equipment that only law enforcement has access to use.”

An industry executive for a small specialty retailer shared some firsthand knowledge of retailers allowing police to use their GPS tracking system when the police are lacking funds to purchase state-of-the-art equipment. Other questionable activities he talked about were LP people entering pawn shops to purchase stolen merchandise, approaching known fences in order to gain evidence, conducting surveillance on suspects’ private residences without law enforcement accompanying them, and LP agents meeting suspects in parking lots to ascertain what they have stolen and who they are working for.

Law enforcement also puts LP professionals in awkward positions since they want the cases wrapped up on a silver platter. Lieutenant Chris Neville of the Wilmington Police Department agreed, saying he has no problem with retailers handling a majority of the case since police departments are so strapped for time and resources.

“Some LP people could be crossing the line and putting their safety at risk by approaching fences or conducting controlled buys,” said Home Depot’s Lussier. “Our role is to gather evidence in safe and ethical ways that tells the most compelling story of events to law enforcement. That includes knowing what to leave to the experts, such as approaching an actual fence. However, Home Depot has highly skilled and highly trained personnel who will sometimes conduct controlled buys, but we always partner with law enforcement to ensure all elements for a successful prosecution are being met.”

Marco Alfredo Mitrowke, who has more than thirty years’ experience in the LP industry, believes passionately in ensuring the safety of LP people, retail customers, and law enforcement. “LP professionals are not cops,” said Mitrowke. “We cannot act like law enforcement. Don’t get me wrong, there are some ORC task forces out there doing good work because they have hired former law enforcement that are highly trained in the necessary skills.” Mitrowke went on to explain the fundamental principles about educating LP people that LP is not about catching bad guys. It’s about being partners in the overall business strategy.

“It’s also about being safe,” added Mitrowke. “There have been too many incidents recently as crime continues to ramp up of violence that has only been exacerbated by loss prevention people instead of calmed down. We have a responsibility not only to our companies, but the public around us to keep everyone safe. The issues of liability to the companies we serve certainly outweighs the visions of glory in some big take down.”

Retailers agree that the safety of their customers and associates is of critical importance. How are they ensuring that, despite organizational pressures, ORC investigators are taking appropriate steps to keep everyone safe? Most retailers interviewed described strict policies and guidelines as well as intense training for investigation staff.

“It is most important when establishing an ORC team to put specific guidelines in place, especially around searching vehicles or houses, GPS tracking devices, or trash pulls,” said Dykes. “Conducting investigations in a safe way and not putting the team at risk is of paramount importance to Cabela’s. We ensure everyone abides by the applicable laws and engages in appropriate surveillance activities. The only way that can be done is by establishing those policies up front and communicating them effectively.”

“We always strive to build strong and sustainable relationships with our police department partners,” said Adams. “We know that we can’t do our jobs without them, so building a foundation of mutual trust is essential to any program’s success. At GAP we have strict guidelines for investigation decisions that happen in the moment, such as when, how, and where we follow a suspect. To ensure none of your ORC team crosses into the ‘rogue’ category, retailers need best-in-class training for their investigative team. Make sure that strategic direction is provided on what is acceptable and not acceptable when investigating ORC cases. Making impactful arrests and recovering merchandise is great, but safety and maintaining brand integrity should be your top priority.”

Of course, the retail trade associations feel strongly about safety and ensuring the retail environment stays profitable and safe. “Ultimately, it comes down to awareness,” said Lisa LaBruno, senior vice president of retail operations for the Retail Industry Leaders Association (RILA). “Loss prevention professionals need to know where the lines are both professionally and ethically. It’s their responsibility to educate themselves and develop policies to ensure compliance before putting themselves and their companies at risk.”

As LP professionals, we face many ethical questions, and investigating organized retail crime is no different.

“I definitely believe LP people can go too far when investigating organized retail crime,” said Jerry Thomas, regional LP manager at HMSHost. “I hear a lot that LP people must help stretch the arm of law enforcement because we don’t have to play by the same rules that law enforcement does. But the question is always—just because we can do something that law enforcement can’t, does that mean we should?”

It is no question we are ushering in a new era of organized retail crime legislation, standards, definitions, and ultimately how the marketplace will treat this crime and the LP agents investigating it.

“Retail professionals conducting organized retail crime investigations now have a greater responsibility because they are treading new ground as the landscape is constantly changing on how we investigate and prosecute organized retail crime suspects,” suggested LaRocca. “Everyone needs to ensure they work closely with their general council and internal department leaders to craft company policies and procedures dealing with these case elements.”

Mitrowke agreed. “As an industry, we are at a crossroads. It should be a requirement for professionals to be Wicklander-Zulawski certified and certified from the Loss Prevention Foundation. These are ways to advance not only your own career, but this entire profession. No longer will we be perceived as ‘wanna-be cops,’ but as true business partners that care about profit-and-loss statements, meeting earnings and the bottom line.”

Don’t Ignore Your Role in the Problem

Let’s consider for a moment the proposed enormity of the organized retail crime problem. When we start talking about billions, it’s difficult to relate. Ponder these illustrations:

  • A billion minutes ago, Jesus was alive.
  • A billion hours ago, man had not yet walked on earth.
  • A billion months ago, dinosaurs walked on the earth.

Okay, so a billion is a lot. Is the retail industry really saying that flea markets, pawn shops, online auctions, and fraudulent returns are responsible for a $15 to $30 billion problem? Given the illustration above, it seems unlikely.

In a former eBay column in LP Magazine, a compelling description of the retailers’ potential role in proliferating organized retail crime asks the question, “Are we to blame?” The article describes a process where retailers are actually generating the demand needed to keep these ORC rings in business. While we are focused on preventing merchandise leaving through the front doors, are we considering the potential that stolen merchandise may be coming in through the back doors?

To learn about some of the ways retailers could be propagating the ORC problem along with actions retailers can take to help prevent the problem internally read the LP Magazine article, “Organized Retail Crime—Are We to Blame?

This article was first published in 2012 and updated August 10, 2017.

Comments
  • This sounds like too much of a sales pitch for WZ and the LPF. And it is pretty opinionated. A billion is a very real possibly as I’ve watched some INDIVIDUAL stores lose thousands of dollars to ORC rings in a period of three days. That is one individual store from one company. Given the amount of stores in the United States and how much groups travel, it’s a very real possibility.

    Reply

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