What is the issue facing retailers regarding boosters and fences? There seems to be confusion over whether boosting or fencing goods is the primary cause of retail shrink. Is this issue one of those questions that we can break down into bite-sized pieces, make mathematical comparisons, study historical data, and reach an operationally sound conclusion? Hmph! The booster-fence causal analysis is similar to the age-old question, “Which came first, the chicken or the egg?”
We may disagree on which came first in the chicken versus egg analysis, but perhaps we can determine which is the most important. However, that depends on whether you want an omelet or fried chicken. In reference to booster or fence, the question is not so much, “Which came first?” but “Is one or the other a more direct cause of retail shrink?” Would the elimination of one cause the demise of the other? Until now, the issue has been too complex to invite consensus.
Examining Pertinent Questions
How does one define the role of booster or fence? Which did come first? Did one create the other, or simply create an environment in which the other could thrive? Is the relationship born of necessity? Do they depend upon each other for existence, or is the relationship a simple matter of symbiotic utility where both find the relationship beneficial?
Let’s attempt to answer these questions.
What is a booster? A person who makes a living by stealing retail merchandise for resale.
What is a fence? A person who makes a living buying and selling stolen merchandise.
There you have it: shrinkage from external theft in retail stores absolutely occurs at the booster level with or without a fence. Doesn’t that answer the next question? Not really.
A fence can’t sell a store’s merchandise if it’s not stolen to begin with, but fences sell a variety of other contraband from many sources.
This further establishes the fact that the booster is the first step in the stolen retail merchandise “pipeline.” However, we can’t place any value on which came first, because each one operates in some aspects without influence from the other and is capable of operating with total autonomy.
Does this mean retailers should ignore everything but the booster? Of course not. We can’t ignore the increase in losses due to the relationship between the booster and the fence.
Did one cause the other to exist, or create an environment in which to thrive? The booster expands the fence’s product line, while the fence expands the market for the booster’s stolen merchandise. They complement each other’s business by providing each other the opportunity for increased volume.
Is the relationship one of necessity or symbiotic utility? They exist independently from each other. Their relationship is that of utility, mutually beneficial for both parties, although not necessary.
The role of the participants becomes clearer during detailed analysis. We must conclude that boosters are the direct link to shrink.
Examples to Consider
Too often, boosters are thought of as the smallest link in the chain of organized retail crime. The dollar amount of a single booster apprehension pales in comparison to the amount of recovery from a well-established fencing operation. But how does each one impact your bottom line? Let’s look at some actual examples of past cases.
A Significant Fence Bust. Over 200 boosters were identified selling stolen over-the-counter pharmaceuticals to an opportunistic street-level fence. The criminal organization was on the threshold of making the move to a mid-level operation. We partnered with agencies of sufficient clout to bring the fullest extent of the law against the fence. As is the case with most high-level prosecutions, the time required to complete a thorough investigation required roughly 18 months. You don’t just run down and hang a pole camera outside the criminal’s business location. It takes cooperation and networking.
During the course of the investigation, documentation was accumulated establishing the fact that the fence transported, on average, $140,000 per week to an illegitimate repack warehouse in the Northeast. In retrospect, we allowed $10,080,000 to be stolen. The bust was a colossal event, and the recovery of $1,700,000 set a record at the time. But what was the net loss? Not counting expenses and payroll, the figure came to $8,380,000.
What did the community lose during the same period? Well, if the tax rate was 9 percent, and if we applied that percentile to sales of $10,080,000 at retail, the community coffers would realize a loss of revenue valued at $907,200.
A Typical Booster Ring. In another example, a particular booster group stole an average of $5,000 per day throughout the duration of the investigation. If the group only worked five days a week, they caused $25,000 in retail shrink. If we extrapolate that out over 52 weeks, the resulting retail shrink in the targeted market would translate to a cumulative yearly loss at retail of $1,300,000. This booster’s profit margin averaged 20 percent on the dollar, creating a yearly gross income for their business of $260,000. The group moved the stolen merchandise themselves. Maybe they hadn’t heard of outsourcing.
The group had been on a state agency’s targeted criminal list for 27 years. Ouch! Do you think the agency focused all their efforts toward working pawn shops and fences?
Maybe if they had understood that the booster is the direct link to shrink, they would have known a link to the fence was not necessary. Maybe they would have expanded their investigation. This misunderstanding has led to the success of many booster rings.
A Second Booster Case. Some time ago, an organized retail crime investigator told us about a booster group he busted. A cooperating witness provided information identifying a group that was hitting his stores and other retailers in his area. The group was stealing over-the-counter medicines and Gillette razors, and was responsible for a daily retail shrink of approximately $8,000. The group was reported to work at their craft six days per week.
The investigator assembled a team, contacted the police in the area specified by the witness, and began surveillance on the group. His team observed the boosters hit four stores, and then called the police. The group was arrested, at which time authorities discovered that the “booster in charge” was on parole with an outstanding warrant for parole violation. Prior to this arrest, the other members of the group had no criminal records.
This investigator’s initiative and organizational skills made a $48,000 per week impact on retail shrink at stores in his area. We were flabbergasted when we learned that a supervisor made the statement, “He’s spending valuable time on boosters when he should be working the fences.”
If the supervisor’s goal is to make a positive impact on the bottom line, maybe someone should point out the fact that boosters are the direct link to shrink.
One Retailer’s Attitude. While attending an LP meeting in the upper Midwest to discuss organized retail crime (ORC) and legislation, a retailer in attendance said, “Boosters are a dime a dozen, and we concentrate our efforts on fences. Cut off the head and the body dies.”
The statement came across as overly dramatic and was a complete opposite of commodity flow. Boosters feed the stolen product into the body of the speaker’s mystical beast, not the other way around.
A successful fence will enhance a booster’s business. If the fence is well connected to an illicit repack warehouse, the booster’s share of the stolen goods market can grow exponentially, increasing the wealth of the fence in the process. Further, if the repack warehouse is well connected to an illegitimate diverter, the potential for increased profits will have a ripple effect all the way back to the booster.
The Booster’s Business Plan
Some boosters are known to have their own version of a business plan. They set a daily goal in the form of a dollar amount of theft and work hard to reach the mark. This amount ends up on their criminal P&L as tax-free profit.
There are as many different levels of boosters as there are different levels of fences. For example, a drug addict may only boost in order to supply a daily habit, but the more entrepreneurial criminals may put the profits straight into their pocket or systematically amass the wealth for expansion of the criminal organization.
Of course, most of the professional boosters use more than one fence to transform the fruits of their labor into operating cash. It’s a good market strategy, and we all know any good risk management program should include a plan to mitigate losses. The booster’s plan just happens to be based on the possibility that one or more fences might get busted. No one wants their cash flow interrupted, illicit or not.
It’s important to remember that the entrepreneurial booster doesn’t require a fence. The fence only improves the booster’s business by helping to expand the booster’s market. The addict may use the fence when the opportunity is available, but they also have the option of trading directly with the drug dealer.
Alternatives to using a fence include working fraudulent refunds for cash or moving stolen product through flea markets. Some boosters sell their stolen products over the Internet as well.
Finding the right fence is merely a plus. Put in perspective, it’s like a vendor getting accepted by a major chain: business soars.
Fencing Goods
We’ve already established the fact that the fence can exist without the booster. Boosting from stores is only one way to generate stolen property. Remember the business relationship between booster and fence is one of utility. The booster’s association with the fence benefits the booster, and the fence’s association with the booster benefits the fence. Their association will only continue as long as it benefits both parties.
Which one should we focus efforts to deter: the booster or the fence? That question makes it sound like we still don’t get it. After all, we now know that the booster causes the loss at store level that causes shrink. If the booster did not steal merchandise from our stores, the fence would make no impact on our bottom line. On the other hand, the negative impact from shrink due to external theft is made more severe if a significant fence is thrown into the mix.
The booster’s activity is much more than a crime against a company. It’s a crime against the people who make their living in retail. It can negatively impact pay and bonuses, for everyone from the stock clerk to the CEO. We’ve also seen how boosters hurt the community through the example of lost tax revenue.
Should we feel compelled to work both angles of the problem? We’d better. While it’s a fact that the booster is the direct link to shrink, failure to recognize the significant role the fence plays is a mistake we can’t afford to make.
The fence is, in no small way, an indirect link to shrink. If we do not target and work the significant fences, we lose even more. Remember, someone who is fencing goods acts as an accelerant. The increasing demand for the booster’s stolen product pumps the contraband through the pipeline. Left unchecked, the relationship of booster and fence could literally drive even more companies out of business.
The booster-fence relationship is responsible for the movement of billions of dollars in stolen property throughout the United States and internationally. With focus on global markets, continued growth of the problem is inevitable. Spin-off issues include devaluing the integrity of certain products, especially those which are date sensitive or meant to be ingested. Not all fences deal exclusively in stolen retail merchandise, but the ones that do deserve our attention.
Effective Retail Responses
Improve Procedural Controls and In-house Security Measures (Quick Solution/Temporary Results).
- Increase associate awareness and create programs that incorporate their involvement. For example, making false security calls when leaving an area to take a break or lunch.
- Make “bottom of basket” (BOB) and “look inside always” (LISA) regular topics of store meetings and awareness posters.
- Install some form of greeter program.
Tightening security through a heightened loss prevention presence is an excellent way to start, but the menace is still in the market. Sooner or later, they will adapt and change their methods in order to circumvent your security measures. This fix is hit or miss and is a continual process.
Target Individual Boosters for Apprehension (Quick Solution/Lasting Impact).
At the least, the booster network will classify your company as a hostile environment and change their choice of stores for a satisfying boosting experience. A good in-store loss prevention program can add another dimension to your loss prevention presence by providing an opposing skill set to challenge the booster’s capabilities.
The in-store LP professional, when partnered with law enforcement, can monitor intelligence on the organized booster. When supplemented by a capable corporate ORC unit, your company is ready to take the process to the next level. Working together, a company’s loss prevention assets, along with investigators from other retailers and your law enforcement partners, can make a positive impact on market profitability.
With the right support from operations, a sustained emphasis on this type of aggressive response can land the career booster in the penitentiary and out of the market entirely, thereby breaking the direct link to retail shrink.
We can’t afford to ignore the example of the booster ring that was responsible for a market loss of $1,300,000 without the benefit of a significant connection for fencing goods; or the other example where $48,000 per week no longer leaves the market. The investigator who took the initiative to react to information from a cooperating witness and addressed the issue head-on contributed the potential increase in yearly profit for the stores in that market of $2,496,000. How can we ignore that?
Educating Law Enforcement, the Industry, and Legislators (Long-Term Goal/Progressive Results).
We must consider several long-term goals that will ultimately have a positive result for the entire retail industry, as well as the communities we serve.
Educating Law Enforcement—For the past several years, retailers have worked within the law enforcement community to educate those detectives involved with property crimes. Seminars on organized retail crime have been held from California to New York to Chicago and Miami. These efforts allow the participants to share goals and information and to lay the groundwork for developing partnerships and networking.
We invest substantial amounts of time educating the officers involved with property crimes, but what about the front-line officer who comes in contact with the booster on a daily basis? How many times have we heard a uniform patrol officer talk about stopping a vehicle that had all kinds of duplicate retail property in the back seat, but they had no idea it was from booster thefts?
Educating the Industry—Retailers can be a hard sale. The profit margins are sometimes narrow and their focus is on sales, as it should be. Operations executives have the tendency to leave issues of retail shrink and ORC to the loss prevention department. With 98 percent of the company’s human resources working in sales or sales-supporting departments, it’s easy to understand how 50 percent of the company’s loss only gets two percent of the company’s effort. We can have the best sales figures in the industry, but if the percent of profit isn’t there, investor confidence deteriorates and the end is inevitable.
The problem lies in the fact that the industry’s shrink from ORC represents a conservative figure of 15 billion dollars annually. This money comes right off the top of company profit columns on the corporate P&L. Large sales figures can mask the problem for a while, but once you look past the percentage points and focus on the dollars, you can see the need to refocus attention on the total business. One of our weakest endeavors as an industry may be our failure to educate our own folks regarding organized retail crime and its impact on retail shrink.
Educating Legislators—Our involvement in the development of the first retail loss prevention legislative team in history was an eye-opening experience. There was a glaring need to document the difference in a simple “shoplifter” who stole a candy bar and the career criminal “booster” whose primary source of income was stealing retail property for resale. The team’s purpose was to write bills that target:
- The sale of stolen property at flea markets,
- Those who use devices to defeat EAS systems, and
- Those who use instruments in creating UPC and bogus receipts.
The team continued targeting several other types of retail crime until finally writing the major bills that create organized retail crime statutes.
Legislative change continues to be of utmost importance. If we are to be successful against ORC, it’s imperative that we have crime-specific laws.
Legislative changes like the third-strike law have made a huge impact on criminal punishment for boosters. Better understanding of the severity of ORC lowers resistance to prosecution and fosters a mindset that can readily accept the need to increase penalties at the individual booster level as well as the fence.
Legislative change is just one of the tools needed to address these issues. We have recognized the importance of area coalition websites and distribution lists. Working together through coalitions that link retailers and law enforcement can improve the distribution of information pertinent to real-time ORC issues. One such organization is the Coalition of Law Enforcement and Retail (CLEAR), which has a board of directors evenly representing both law enforcement and retail. Formed in 2008, the association is currently headed up by Curt Crum, CID special services manager of forensics and victim services and organized retail crime with the Boise City Police Department.
The Ultimate Goal
By using all the tools at our disposal, we can continue to impact the various levels of organized retail crime. We can make the occupation more difficult and less rewarding. Sooner or later, with the help of enhanced legislation, the career criminals will land in prison as habitual offenders.
Loss prevention’s goal must include taking the lead in educating all their partners on the issues of organized retail crime. We must break both links to shrink—the booster as the direct link and the fence as the indirect link to shrink.
This article was originally published in 2010 and was updated December 6, 2017.