Losses associated with organized retail crime (ORC) are on the rise in the US. The 2023 Retail Security Survey by the US National Retail Federation found that retail sector losses were up nearly 20 percent year over year, with 36 percent of those losses attributable to external theft.
The magnitude of ORC operations can be a significant factor in external theft. For example, 87 people were recently arrested as part of a retail theft ring in Florida that accounted for $20 million in lost merchandise.
Both physical and digital security methods help retailers take action to combat ORC. This article takes a closer look at evolving techniques that retailers are using to keep their customers and employees safe while limiting negative impacts on their bottom line.
Locked Merchandise and Changing Floor Plans
As a first line of defense, sought-after theft items are being locked down in an increasing number of stores. A major beauty product chain reports that 70 percent of its stores now use locked merchandise. A drugstore chain announced that it’s considering putting virtually all products in locked cabinets. This can leave just a few aisles of touchable merchandise on a retail floor.
While more locked merchandise helps to mitigate theft, this approach comes at a cost to retailers. Locked merchandise impacts customer behavior, which can negatively impact sales. Coresight Research reports that locked merchandise causes 17 percent of shoppers to shop elsewhere while 25 percent choose to shop online instead.
For an improved shopping experience, some retailers are testing a catalog showroom model where a small amount of touchable merchandise is on display. Customers can see the product, place an order, and go to a pickup location to make payments and get their products. This shields a large amount of merchandise from public access and would-be thieves. It does require a major update to a store’s floor plan.
Vending machines are also being tested to protect certain types of merchandise. Customers punch in a number, and a claw grabs an item and drops it in a slot for pickup. Or a customer enters a credit card and pays for an item before it is dispensed. Depending on the merchandise they sell and the amount of stock they carry, this may be a good fit for some types of retailers.
Digital Access Controls and Sensors
The latest digital technology offers promising alternatives to mitigate ORC. Wireless cabinet locks with access control capabilities make it faster and easier for customers to access locked merchandise. A customer can press a button on a case, which sends a mobile alert to an associate to open the case. Using a unified security platform, the associate can view video footage to see the customer, provide access to the case, and alert in-store security if needed.
Customers can also scan a QR code to unlock a case and access merchandise without contacting an associate for assistance. In this case, the customer exchanges their phone information for convenience. While this approach helps with tracking perpetrators, it may present a privacy concern to shoppers.
Some retailers are adding sensors to shopping carts to identify whether a cart has passed through the checkout. If a cart doesn’t go through a checkout point, an alarm sounds, and a cart’s wheels lock once it exits the store. Thieves may pick a few items out of the cart and leave the rest behind, or they may abandon the cart entirely. While not a 100 percent deterrent, losses are reduced.
For retailers that use radio frequency identification (RFID) tags for inventory management, these same tags can be scanned at a store’s exits to identify whether items have been purchased. If a stolen item leaves the store, it can trigger security alarms and other notifications. This option is most cost effective for retailers that already use RFID tagging for inventory management.
Evidence Gathering and Shared Dossiers
To fend off repeat ORC offenders, retail chains are building dossiers on thieves to increase arrests and prosecutions. Video surveillance, predictive analytics, and automatic license plate recognition (ALPR) all help to gather evidence.
Once a perpetrator’s theft reaches a certain felony threshold limit, a retailer shares the dossier with law enforcement. Digital evidence and case management systems help retailers collect and share data easily with law enforcement agencies. With the click of a button, media is uploaded from a variety of sources and shared with authorized individuals inside or outside an organization. This eliminates the need to manually copy information to DVDs or exchange external drives.
While federal regulations have been slow to address ORC, some cities and states have created new laws or enforced existing ones more actively. One US state is moving to elevate the assault of a retail worker to a Class D felony, while another has enacted a law to charge criminals with “aggravated shoplifting.”
ORC Deterrents and Loss Prevention
The holidays provide an opportunity for retailers to be particularly watchful about ORC. It’s a good time to reevaluate theft deterrent techniques.
By using newer security technology and evidence gathering techniques, retailers can take steps to thwart ORC activity, remain more vigilant about merchandise losses, and help keep customers and employees safe in their stores.