Retailers That Buy from Diverters Are Fueling External Theft

external theft, organized retail crime methods

Sophisticated criminals involved in ORC know that to turn a profit, they must attempt to supply a demand in the marketplace. But did you know that retailers themselves are the ones providing a significant portion of that demand?

When retail buyers turn first to the supplier advertising the lowest price, they don’t consider the idea that they might be inadvertently purchasing stolen or counterfeit product from a diverter. Diverters are the individuals or groups whose function is to launder stolen product into legitimacy by reselling it to retailers.

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Many retailers don’t even realize they’re fueling their own external theft by purchasing stolen product from diverters. This “self-defeating loop” is the topic under investigation in contributing writer Chris Trlica’s feature article in the September-October 2016 issue. From the article:

“Why do diverters exist in the first place? Why does the retail marketplace tolerate an avenue for stolen merchandise to be resold to them? Diverters exist because smaller retailers—local and regional chains—rely on them as suppliers. If you’re a local retail chain with ten stores, you can’t buy directly from the manufacturer because you can’t meet their minimum order requirements. So the diverter will buy from the manufacturer and then resell to you and a dozen similarly sized companies.”

Trlica goes on to take a closer look at the incidence of counterfeit goods in the retail stream, the ways in which diverters guarantee the sale of their stolen goods, and what retailers can do to avoid unknowingly purchasing stolen product. Check out “ORC and Diverters” to read the full article. You can also visit the Table of Contents for the September-October 2016 issue or register for a free subscription to the magazine.

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