Retail Theft: A Hidden Crisis

Being a victim of a home invasion or carjacking is incredibly scary. We often hear stories of robbers breaking into homes and holding families at gunpoint, leaving them traumatized and violated. It’s not just about the physical harm and stolen belongings, but also the feeling of losing safety in our own homes.

Carjackings are just as terrifying as our cars are our private spaces. More and more people are being forcefully taken out of their cars at gunpoint, sometimes even getting hurt or killed. The thieves drive away with their vehicles, leaving the victims traumatized.

These crimes capture the public imagination because they threaten our sense of order and security. But they are relatively rare compared to the retail theft that occurs every day in virtually every community.

Home invasions, burglaries, and carjackings affect us emotionally because we can picture ourselves in the victim’s place. Retail theft, on the other hand, is often viewed as an abstract, institutional problem. We tend to think of the victims as faceless corporations that can easily absorb their losses. Retailers even have a mild euphemism for these crimes that impinge on their profits: shrink. The resulting impression makes the problem of retail theft seem manageable, even minor, and certainly not a personal threat to individuals.

But the statistics tell a different story.

To start with, the expense that retailers categorize as shrink costs about $100 billion each year. That figure dwarfs the cost of auto thefts at $25 billion. And home invasions and burglaries? As terrifying as they are, they cost Americans just $3.4 billion annually. Yet common conversation uses auto theft as an indicator of crime.

Meanwhile, the ripple effect of retail theft adds billions more to its cost. According to the US Chamber of Commerce, organized retail crime (ORC) results in $39.2 billion in lost wages, 685,374 lost jobs, and $14.9 billion in lost federal, state, and local taxes. Total economic losses nationwide are estimated at $125.7 billion. These costs also affect consumers directly. When the expenses incurred by theft rise, so do retail prices. In effect, ordinary shoppers are paying for the free stuff that thieves are getting away with.

In view of these facts, it quickly becomes apparent that retail theft affects every American in a big way. But public awareness of this growing problem is still lacking. The businesses that deal with it every day are certainly aware of it. But to fight it effectively, everyone must see it as the crisis it is. Retailers, legislators, law enforcement, and consumers must work together in creating solutions.

Retail Theft Is Big Business

In recent years, smash-and-grab thefts have received a lot of media attention, and for good reason: they’re spectacular and horrifying. When they’re captured on video, they usually make the news and go viral on social media. And for those who are in the store during a smash and grab, the experience is as terrifying as a home invasion. But the real menace is less visible and far more insidious. Organized retail crime is just that—it’s typically well-organized and run by large criminal enterprises. These theft rings don’t rely on big one-time events such as smash-and-grab robberies. Instead, they keep a low profile and focus on generating consistent, ongoing revenue. They recruit armies of foot soldiers to do their work—ordinary people who look like everyday shoppers. The amounts stolen by any individual can be knowingly kept below the level that would incur a felony charge, so even if the thieves are arrested, they can quickly go free.

Once they’ve gathered their ill-gotten goods, retail criminals can easily resell them at an enormous profit. In earlier times, stolen items were typically sold through fences who could resell their merchandise at pawn shops or other marginal outlets. Nowadays, the internet makes things much easier. Amazon and eBay are ideal marketplaces for products of all types—legitimate or not. And it’s impossible to trace the origin of many of these items.

Some retailers have abandoned the practice of requiring receipts for returned items. So, stolen goods can be returned to the very places they were stolen from in exchange for cash. And of course, many items are purchased using stolen credit cards or card numbers. When fraud is committed using a physical card, the banks are usually liable for the loss. But otherwise, the merchants themselves are often stuck with it.

This is the real fight that every retailer in America is facing. They can’t ignore it—the rest of us shouldn’t either.

Among the many victims of retail theft are the store employees who work on the frontlines of the fight. They often become targets of violence while doing their jobs. In 2022, according to the National Retail Federation, eight out of ten retailers reported increased incidents of violence and aggression. And Buy Safe America conducted a survey of asset protection managers that yielded more disturbing results: almost 76 percent of those who responded reported that one of their associates had been physically assaulted by an organized retail criminal. And more than 40 percent reported that an associate had been harmed with a weapon wielded by an organized retail criminal. Next time someone mentions car theft, share this statistic:retail theft is four to five times greater than car thefts in the US. Often, news media focuses on whether the $100 billion retail theft number is incorrect as opposed to the impact the theft and violence have on retail employees; 32 million people in the US work in retail and retail is the largest private sector employer in the US economy.

These reports lead to another hidden cost of retail theft: the low employee morale that comes from working in a seemingly lawless environment. Many jurisdictions have simply stopped prosecuting shoplifters. The thieves, as well as the store employees, know this. The result is that criminals act with newfound boldness while employees become timid and fatalistic. It’s not unusual nowadays to see employees as well as shoppers watching passively as thieves brazenly walk out of stores carrying stolen goods.

Many company policies now actually forbid employees from interfering with shoplifters. The rationale is understandable: Confronting criminals only increases the risk of violence. Sometimes, employees who violate the policies by trying to stop the thieves are fired. The public perception of this phenomenon is predictable—many feel that criminals are getting a free pass while those trying to stop crime are punished. This topsy-turvy situation is deeply corrosive to the sense of public order that every citizen relies on.

The sense of outrage that people feel toward home invasions or carjacking is just as appropriate for the problem of retail crime. We’re all paying for it in multiple ways, whether we feel it or not. But people need to be made aware of the real costs—to them, their families, their communities, their nation, and their pocketbooks.

The bottom line? Retail theft is not an abstract, impersonal problem. It is not manageable. It is not normal. It should not be accepted. Every citizen should stand in opposition to this threat to our safety, our civic life, and our economy.

Here are some strategies that retailers can employ to effectively combat the issue:

1. Enhanced Security Measures:

•  Retailers should consider installing additional surveillance cameras, particularly in areas susceptible to theft or where high-value merchandise is displayed.
•  The use of security tags and electronic article surveillance (EAS) systems can act as deterrents against theft.
• Increasing the presence of uniformed security personnel within stores can bolster overall security.

2. Employee Training: 

• Employees should receive comprehensive training on how to accurately identify suspicious behavior.
•  Staff members need guidance on how to report incidents of theft discreetly without directly confronting perpetrators.
• Regular refresher courses on theft prevention protocols should be conducted for employees.

3. Policy Evaluation:

• Retailers must review existing policies that restrict employee intervention during theft incidents. Guidelines should be provided regarding when and how employees can safely intervene.
• The return policy needs re-evaluation to ensure adequate safeguards against accepting stolen merchandise.

4. Utilization of Technology:

• Implementing advanced Point-of-Sale (POS) systems enables better inventory tracking and detection of irregularities.
• Artificial Intelligence (AI) or Machine Learning (ML)-based software has the capability to automatically analyze surveillance footage, efficiently identifying suspicious activities.

5. Public Awareness Campaigns:

• Collaborative efforts among retailers could create nationwide awareness campaigns highlighting the impact retail theft has on prices and the economy at large.
• Sharing statistics and real-life stories about retail theft through social media platforms and in-store communication helps educate consumers.
• Work with organizations such as LPRC, RILA, NRF, CLEAR, and ORCAs.

6. Collaboration with Law Enforcement Agencies:

• Sharing data and insights with local police departments aids their understanding of organized retail crime patterns, facilitating more effective investigations.
• A proactive involvement in community policing initiatives fosters stronger partnerships between retailers and law enforcement agencies.

7. Advocacy for Stricter Legislation:

•  Retailers can advocate for more stringent laws against organized retail crime to effectively deter potential thieves.
•  Encouraging judicial systems to treat retail theft cases with greater severity and prosecute offenders accordingly is crucial.

8. Tightening the Supply Chain:

•  Implementing stricter controls over inventory, including frequent checks, helps identify discrepancies promptly.
• Ensuring suppliers and partners are equally vigilant in preventing theft and fraud is essential.

9. Monitoring E-Commerce Platforms:

•  Continuous monitoring of online platforms like Amazon and eBay allows retailers to detect stolen items being sold illicitly.
•  Collaborating with these platforms to develop robust seller verification processes and reporting mechanisms strengthens efforts against retail theft.

10. Community Engagement: 

• Hosting community events or seminars that raise awareness about the implications of retail theft encourages public involvement in prevention efforts.
• Establishing partnerships with neighborhood watch programs and local community groups enhances overall security measures.

By adopting a comprehensive approach to addressing retail theft while collaborating closely with the community, law enforcement agencies, and other stakeholders involved, retailers can mitigate the impact caused by this concealed crisis.