What Is Organized Retail Crime? Consequences + Prevention

In recent years, there has been a new, unwelcomed trend haunting retail stores: organized retail crime (ORC). It refers to large-scale, organized shoplifting, cargo theft, ecommerce cyber-attacks, fraud, and other professionally orchestrated crimes against retailers. ORC is costly, difficult to detect, and highly organized—and erodes shopper trust.

In this ultimate guide to ORC, we will examine exactly what it is, how it is different from regular theft, what the ORC industry looks like in 2023, and ways that you can prevent ORC in your business.

How Organized Retail Crime Works

ORC is carried out by professional criminal groups that resell the stolen goods for a profit in black markets, in flea markets, or to other retailers.

Organized retail theft or crime can take the form of fraudulent credit cards to buy goods that will never be paid for, robbing cargo ships and trains, stealing from stores openly in groups, barcode swapping, and other organized acts of theft or fraud against retailers.

Organized Retail Crime vs Shoplifting

While organized crime and shoplifting are related—both involve taking retail products without paying for them—they are not the same thing. Shoplifting can be an off-the-cuff action taken by an individual. ORC involves advance planning and a larger group entity. Additionally, ORC implies that the stolen goods will go on to be resold, whereas shoplifting does not.

For example, say a group of people come together and make a plan to rob a store in their area, including what they will steal, how they will surpass security, and to whom they will sell the products afterward. As this scheme involves a group, premeditation, and intent to sell the stolen goods after the fact, this is a case of organized crime and not petty theft or shoplifting.

Organized Retail Crime in 2023: Key Statistics

In recent years, organized retail crime has become a much more prevalent issue for retail businesses large and small. Across the retail industry, ORC costs retailers an average of $700,000 per $1 billion in sales, and more than 56% of small businesses reported being victims of ORC in 2021.

To combat this, 78% of retailers say that mitigating organized retail crime is more of a priority in 2023 than it was just a year ago. Between 2020 and 2021, the value of products lost to organized retail theft grew by $21.6 billion, with the average incident valued at $243 within the same period.

Retailers want the government to take action against organized crime. 72% of retailers reported that there was an increase in the average value of items stolen per incident in areas that increased felony thresholds. Additionally, 67% reported an increase in repeat offenders in areas that have reduced or eliminated cash bail for ORC offenses.

To make matters worse, organized retail crime isn’t just becoming more prevalent, it’s also becoming more violent. In 2022, 81% of retailers reported that ORC offenders had grown more violent since 2021. That number compounded in 2023, with more than two-thirds (67%) of retailers saying that they were seeing even more violence and aggression from ORC perpetrators compared with 2022. This claim is further substantiated by another survey where 75.9% of respondents reported that ORC had resulted in the physical assault of an employee in the last year.

While some retailers are waiting on legislation to help protect their stores, many have already taken action of their own. Forty-five percent of retailers have reduced their store hours, 30% have removed some products from shelves, and 28% have had to close store locations. Additionally, 52% of retailers have increased their retail security budget this year so they can invest in new technologies.

Of those that retailers have adopted new retail security tech in the past years, the top 10 most effective solutions are cited as:

• CCTV and video systems
• Locking cases, lock boxes, and cages
• Exception-based reporting systems/program
• Loss prevention (LP) staffing
• Enhanced, upgraded or integrated CCTV systems
• Off-duty officers
• Automatic pushout prevention systems
• Computer-based or virtual training for employees
• Awareness campaigns for employees
• Collaboration with retail partners, law enforcement and prosecutors

Impacts of Organized Retail Crime

As you might have gleaned, organized retail theft and crime causes massive losses in profits, but the effects go much deeper than just dollars and cents. Here is a comprehensive list of how ORC impacts retail businesses and why you should care.

• Higher employee turnover: It can become more difficult to retain staff if they feel unsafe—especially as perpetrators become more aggressive.
• Profit loss: Through the loss of inventory and staff, ORC will cut into your profits and can impact how much you have to spend on other areas of your business.
• Inflated inventory shrinkage: Inventory shrinkage refers to the difference between the amount of inventory you should have on hand and the amount of inventory you actually have on hand. While shrink can also be attributed to internal theft, clerical errors, and external theft, your shrinkage should remain below 1.7% to be within an average, healthy shrink rate. Learn more about retail shrinkage and how to calculate shrinkage your business may be experiencing.
• Erosion of shopper trust: If organized retail crime causes orders to go missing or personal information to be stolen and generally creates an unsafe shopping environment, customers will view your brand as less trustworthy.
• Shorter operating hours: To avoid being open late into the night when crime is at its highest, many businesses have been forced to close earlier and reduce their operating hours.
• Additional security expenses: Organized theft and crime not only drive up expenses from loss but also due to necessary prevention measures. These can include locking shelves, advanced security systems, and staff training—all contributing to elevated operating costs.
• Location closures: In some cases, ORC is too pervasive and costly, forcing businesses to close their doors. We have seen this happening in ORC hubs throughout the last few years, stripping communities of jobs and resources.

How to Prevent Organized Retail Crime

One aspect of managing a retail store is taking steps to enhance your retail security, including taking actions to prevent organized retail crime.

Here are a few techniques that you can adopt to help prevent ORC:

• Adopt a business security system: One of the most effective ways that you can prevent organized retail theft and crime is to adopt a business security system. There are lots of great options, including systems designed specifically to protect retail stores.
• Utilize signage: Signs that let people know they are on camera or that you prosecute thieves will deter organized retail criminals from targeting your store.
• Use a numbered tracking system for fitting rooms: Adopt a system where you track how many items people are taking into and coming out of the fitting room with. This will help prevent people from stuffing their bags in the privacy of a fitting room.
• Hire security: If organized retail crime is prevalent in your area and you are vulnerable, consider hiring security personnel to deter and stop thefts.
• Offer assistance upon entry: Let customers know that you are not only there to help, but also to be attentive. If a thief thinks they are being watched by staff, they are less likely to steal and other customers will appreciate the attentive customer service.
• Implement staff training: Train your staff on how to handle thieves and violence, and educate them on all their resources for getting assistance.
• Eliminate self-check-out: Self-check-out options are prime areas where criminals can walk out of the store without being noticed by an associate.
• Staff your store appropriately: A store with adequate staff will offer organized criminals fewer opportunities to commit their crimes undetected. Not only that, it’s a safer situation for your staff.
• Use secure systems: Keep your data and ecommerce store secure by adopting strong passwords, updating your systems regularly, using secure payment gateways, and operating under secure POS practices

Frequently Asked Questions (FAQs)

How common is organized retail crime?

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What is an example of organized retail crime?

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What is the most common item taken by retail theft?

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Can businesses do anything about organized retail criminals?

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Bottom Line

Organized retail crime is a big issue in the retail industry, and businesses are looking both to internal security measures and government legislation to stop the onslaught. With profit losses that lead to job losses that lead to more crime, the ORC issue is a complex one that will require massive efforts to combat.

You can use the prevention techniques we covered here to get started and keep reading our other retail security guides for more tips on how to protect your business from all kinds of loss.