Taking the Battle Against Organized Retail Crime to Washington DC

In the post-COVID-19 era, the retail industry has been burdened with an insurmountable surge in criminal activities, causing significant pressure and exhaustion. The financial burden of safeguarding employees, products, and store environments has escalated to unparalleled levels. Reflecting on the trajectory over the last several years raises critical questions about the brazen nature of criminals, their blatant disregard for concealing stolen goods, and the apparent decline in effective deterrents and consequences for criminal behavior. This situation did not arise suddenly but is the result of a slow, progressive series of events.

Prior to COVID-19, legislative changes such as the decriminalization of certain offenses like shoplifting, elevation of felony thresholds, and bail reform were implemented. While aimed at positive societal reform, these measures inadvertently created loopholes that criminals have exploited, manipulating the justice system to their advantage.

Fast forward to the post-COVID-19 years, and the retail sector grapples with addressing the escalating epidemic of retail crime. What measures can bring about change? Securing merchandise, increasing security personnel at store entrances, and reinstating capacity limits are considered. Implementing Crime Prevention Through Environmental Design (CPTED) in retail settings can deter theft and enhance employee safety. However, to truly reestablish law and order and address the root causes, a multidisciplinary approach to legislative change is essential.

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To initiate legislative change, one must first understand how laws are created. The process involves several steps:

  • Bill Drafting: Anyone can write a bill, but only members of Congress can introduce legislation.
  • Proposal Articulation: The proposal must be conveyed in a manner consistent with bill language.
  • Sponsorship: The member of Congress introducing the bill becomes the primary sponsor, and the bill may have unlimited co-sponsors.
  • Record and Introduction: After introduction, the bill is entered into the House Journal and printed in the Congressional Record.
  • Committee Assignment: The Clerk assigns the bill a legislative number, and it is then assigned to the appropriate committee.
  • Committee Review: Committee members examine the bill and may request language changes.
  • Subcommittee Review: The committee decides whether to send the bill back to the floor or to a subcommittee for further examination.
  • Subcommittee Approval: If submitted to the subcommittee and the subcommittee approves, the bill returns to the original committee.
  • Floor Debate and Amendments: If approved, the bill is debated on the floor of the House or Senate.
  • Voting: After all changes are agreed upon, the bill is voted on.
  • Voting Methods: Voting can occur via voice vote, division vote, or record vote.
  • Passage: A majority vote in either the House or Senate is needed to pass the bill.
  • Presidential Approval: Once the bill has majority votes in both chambers, it goes to the President for approval.
  • Presidential Options: The President can sign the bill, veto it, or issue a pocket veto.

This is generally how bills and laws are initiated and implemented. However, there are exceptions and nuances not covered, such as administrative agencies, which are created by the Executive Branch and have the power to create regulations without the introduction of a bill, and in line with their agency’s mission.

Although shoplifting, fencing, and reselling stolen merchandise is not new to our industry, organized retail crime and its impact on the retail industry have become a greater concern in the twenty-first century. Our industry has been engaged in legislative efforts at a national level since the early 2000s. Although the extent of the issue has greatly increased, our efforts have resulted in some wins along with some learnings to help the passage of future legislation.

2008: A Big Year for ORC and Legislation (So We Thought)

The retail industry took an active stance trying to change or create laws that involved criminalizing organized retail crime (ORC). After a seven‑year lobbying campaign comprised of retailers, manufacturers, and trade associations, key legislation was introduced in Congress:

  • Congressmen Ellsworth (D-IN) and Jordan (R‑OH) introduced the Organized Retail Crime Act of 2008 (H.R.6491). The key points of the legislation in 2008 were:

-Add ORC to the federal code

-Narrow the definition of “online marketplace”

-Require online marketplaces to conduct an investigation of stolen goods and disable access when ORC is revealed

-Require sellers to identify merchandise from specific or exclusive retailers

-Require online marketplaces to maintain identification records for high-volume sellers

-High-volume sellers must post identification information that is accessible on internet sites

  • Congressman Scott (D-VA) introduced the E-Fencing Enforcement Act (H.R. 6713).  Scott’s bill targeted ORC mitigation through online marketplace requirements regarding information collection that can be used by law enforcement for prosecution and stopping the sale of goods when they are known to be stolen.
  • Senate Majority Whip Durbin (D-IL) introduced the Combating Organized Retail Crime Act of 2008 (S. 3434). Durbin’s bill focused on tools for law enforcement geared toward prosecution, investigation of suspected stolen goods by online marketplaces, and disclosure requirements for online marketplaces.

The three aforementioned bills in 2008 represented a valiant effort to combat ORC through the use of legislative platforms. Every one of the bills had a congressional champion, retailer support, and trade associations leading the charge. Despite these efforts, the bills did not pass.

How could this happen? ORC was getting bad in 2008, so why couldn’t these bills make it to the finish line? What got in the way?

Although there isn’t one answer, the overarching reason is the cause got lost along the way. ORC, which was at the epicenter of each bill, got lost in the minutia of debates on whether the bills were an attempt to suppress marketplaces from selling goods online. Lessons learned from the failed bills were evaluated, and strategies were put in place to not repeat history should future federal bills be introduced on ORC again.

Retail theft and ORC did not go away. Retailers continued the battle as time marched on. Then came the pandemic, followed by a summer of civil unrest and a very contentious presidential election. However, many can argue that it was a series of high‑profile group thefts making the news in late 2021 that brought ORC back into the public spotlight. Although retailers were experiencing larger losses and more frequent theft events prior to these incidents, ORC once again was of national attention, including legislation.

2022: The INFORM Consumers Act

Fourteen years later, significant progress was made with the introduction and passing of the INFORM Consumers Act, part of the Consolidated Appropriations Act. This act imposes stringent requirements on high-volume third-party sellers and online marketplaces, enforceable by the Federal Trade Commission (FTC) and state attorneys general. This law was signed by President Biden on December 29, 2022, taking effect on June 27, 2023.

The INFORM Consumers Act specifies:

  • Collection and Verification of Information: High‑volume third-party sellers must provide information, which will be verified, to the online marketplace it operates no later than ten days after qualifying as a high-volume third-party seller on the platform. Sellers will be provided with notice for compliance failures and data collection compliance requirements for marketplaces.
  • Disclosure Requirements: High-volume third-party sellers with an aggregate total of $20,000 or more in annual gross revenues from sales on an online marketplace must disclose required information provided to the marketplace to consumers in a clear and conspicuous manner, written notice for failure to comply will be issued, and terms of suspension clarified.
  • Enforcement: Enforcement will be carried out by the FTC and state attorneys general.
  • Preemption: No state or political subdivision of a state or territory of the United States may establish a law, regulation, rule, requirement, or standard that conflicts with the requirements of the INFORM Consumers Act.

Combating Organized Retail Crime Act of 2023

Although initially introduced in the 2022 congressional session to no avail, the Combating Organized Retail Crime Act (CORCA-S. 140/H.R. 895) was re-introduced in 2023, aiming to create a federal task force for better coordination among law enforcement agencies while providing more leverage for investigators and prosecutors. The Senate Bill was sponsored by Senator Grassley (R-IA) and Senator Cortez-Masto (D-NV). The House bill was sponsored by Representative Buck (R-CO-04), Joyce (R-OH-14), Lee (D-NV-03), and Titus (D-NV-01). The bills create a federal taskforce under Homeland Security Investigations that will increase coordination between federal, state, and local law enforcement and create changes to Title 18 of the US code that will provide more leverage for investigators and prosecutors.

CORCA has become one of the more bipartisan bills in Congress, with a current co-sponsorship of over ninety Senators and Representatives across both political parties. It continues to generate a great deal of attention and the retail industry stands in its efforts to seek its passage.

Fight Retail Crime Day

Retail associations play a vital role in supporting the industry in our advocacy efforts. One example is providing opportunities to advocate for change on Capitol Hill.  The National Retail Federation (NRF) deemed October 26 of 2023 “Fight Retail Crime Day” in Washington, DC.  On this day, retailers took to The Hill to speak with lawmakers regarding the ongoing problem of retail crime and the subsequent impact on stores, employees, and customers.

The planned day began with a press conference where bill sponsor Senator Grassley urged his colleagues to recognize that this crime is a danger to employees, a cost to consumers, and harmfully impacts retailers. After the press conference, seventy retailers and NRF supporting personnel held more than sixty-five individual meetings with members of Congress, demonstrating their knowledge of the growing epidemic of retail crime and the need for legislative change to combat the problem.

The discussions on Capitol Hill in 2023 were much different from the previous discussions on the same topic over a decade ago. Previously, AP executives were educating members of Congress on what ORC is, and this time, they were collecting feedback and getting support from members while stories were shared on how they were personally affected by ORC and the impact on their respective states.

These meetings provided a great experience for those in attendance. The education that comes from those who deal with the issue daily provided our congressional representatives with an understanding of the true impact of this issue. The day also allowed our attendees to understand some of the challenges or concerns of those who may oppose or not be fully educated on the issue. These learnings allow us an opportunity to be better as an industry in educating people on the issue. For example, two key takeaways received from one member’s office:

  • The dollar figure for ORC being reported needs to be consistent within the retail community.
  • The definition of how ORC is being classified, reported, and measured needs to be consistent within the retail community.

As an industry, we need to ensure alignment across the above two categories so that when the topic of ORC is discussed publicly and, in an effort to gain support for federal legislation, everyone is speaking the same language.

What Can You Do to Help?

Take a moment to let your voice be heard and go to www.votervoice.net/NRF/Campaigns/98241/Respond and urge Congress to support CORCA. The volume of messages received by Congress on this issue matters and retailers have the opportunity to use our collective voice to call for action.

If lobbying on Capitol Hill isn’t your preferred approach, there are still ways industry practitioners can contribute:

  • Stay Informed and Educate Others: Familiarize yourself with legislation like the INFORM Act or state ORC statutes. Educate law enforcement personnel and prosecutors/DA who might not be aware of the new legislation.
  • Support Through National Trade Associations: When associations like the NRF ask for support in writing letters or signing letters of support for specific legislation, ensure your organization’s participation. Collective support from retailers can influence lawmakers’ decisions toward ORC mitigation.
  • Consistent Definition and Reporting of ORC: Accurately define and report ORC within your organization, aligning with industry standards and transparent measurement methods.
  • Collaborate and Share Information: Engage in collaboration with other retailers, share permissible information, and get involved with industry coalitions and groups. Embrace the collaborative approach encouraged by CORCA between federal, state, and local law enforcement agencies.

The industry’s journey from the early efforts in 2008 to the present day underscores the adage, “It’s not always the right time to do the right thing.” The industry is now better positioned to address ORC, but it requires concerted efforts from all stakeholders. This collective effort is crucial for moving the needle in the right direction and effectively tackling the challenge of ORC.

Millie Kresevich is the senior director of asset protection, North America at Essilor Luxottica. During her career she has worked in big box, specialty, and corporate asset protection roles in the retail environment. She holds an AAS in Criminal Justice, BS in Social Psychology, and a Masters in Business Ethics and Compliance. Millie also serves on the LP Council for the National Retail Federation (NRF) and works closely with the Loss Prevention Research Council (LPRC) on various industry initiatives. She has contributed to the development of certification programs for the Loss Prevention Foundation and has been a speaker on loss prevention topics nationally and internationally. Millie was a former recipient of the 20 under 40 National Security Executive Award and was a recipient of the LPM Magpie Award for excellence in leadership for her service to the loss prevention community.

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