Gift Cards Have Become a Common Currency for ORC

As Retailers Respond to the Evolving Needs of the Business, ORC Groups Are Answering In Kind

As retailers have responded to the evolving needs of the business, most have changed their return policies and typically issue a gift card or store credit when returns are made without a receipt. Unfortunately, this still offers the thief a lucrative opportunity.

Rather than fencing the merchandise for 30 percent of its value on the streets or selling the goods on the secondhand market for 60 to 70 percent of its value, they can return the merchandise to the store, receive a gift card, and sell the gift card for up to 80 percent of its market value. Factoring in the sales tax portion of the return, which can bring an additional 5 to 10 percent depending on the state, the thief can be looking at an 85 to 90 percent return on their “investment” for the stolen merchandise.

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While these gift cards can be sold at physical locations such as pawn shops and other outlets, online sales sites currently provide an easy way for thieves to convert the cards to cash. A simple Google search using the phrase “sell gift cards” resulted in more than 73 million results. Gift cards can be bought and sold on popular sites such as eBay, Amazon, and even Craigslist. But there are also sites that are specifically dedicated to purchasing “unwanted” gift cards such as Raise, Cardpool, CardCash, and even Gift Card Granny that offer various “buy it now” options that enable a quick turnaround for the gift cards.

Ties to the Illegal Drug Market
It’s widely known that shoplifting is considered a gateway crime, a criminal offense that, in general terms, often leads to other more serious or harmful criminal issues such as drug-related crimes and abuse, gun-related incidents, violent crimes, and even terrorism. There are now even reports of a direct link between gift card issues and the opioid epidemic, with addicts stating that drug dealers will often accept gift cards as payment in lieu of cash.

For example, State Senator Richard Briggs of Tennessee reports a direct connection between gift cards and drug overdoses based on reports received in his home state. Retail theft is prevalent in Tennessee, with Knoxville reportedly ranking first in the nation per capita for card abuse and theft. In Knox County, he revealed that police linked sixteen of nineteen overdoses to the sale of gift cards during a one-month period in 2017. In the city of Knoxville, police also tracked eighty-three to ninety-eight overdoses to gift cards during a three-month period.

Senator Briggs was stunned by these numbers. “It would be no different than if there was a rock lying there, and if you lifted it up, and this horrible smell came out, and this monster came out,” he said. “We had no idea that the organized retail theft was related so intimately with the opiate and drug trade in general in Appalachia. We have a crisis in Tennessee where goods are stolen and then returned to retailers for credit on a gift card. The cards are sold for cash, which in turn is fueling the illegal drug market.”

He introduced new legislation approved by the Tennessee General Assembly 2018 defining organized retail crime and creating two new theft offenses to prosecute individuals who return stolen merchandise to receive money, gift cards, or store credit.

Education and Awareness Are Critical
Dealing with the many aspects involved with organized retail crime requires an advanced level of skill and training, but it also necessitates sound judgment and common sense. As is true with every aspect of loss prevention including retail crime, it’s critically important that we remain aware of recent trends by working closely with other retailers, our law-enforcement partners, and local, state, and federal legislators.

Every effort must be made to educate our teams, heighten awareness among company decision makers, and protect our customers and employees from these incidents. Sound judgment, safety, prevention, and awareness should be our ultimate objectives as we develop the strategies necessary to help us detect issues, deter incidents, protect resources, and resolve these issues.

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