California Apparel News

The National Retail Federation recently released a report on organized retail crime, defined as sophisticated criminal gangs targeting retailers. It found that ORC is increasing and that Los Angeles has the dubious distinction of being the top-ranked city for this category of crime.

After Los Angeles, the next four top-ranked cities were New York, Houston, Chicago and Miami.

The recently released 15th annual ORC study found that 97 percent of retailers surveyed by have been hit by ORC gangs in 2019. It also found that 68 percent of retailers in the study believe that there was an increase in ORC activity.

According to the report, retailers’ ORC losses average $703,320 per $1 billion in sales, said Bob Moraca, the NRF’s vice president of loss prevention.

“Organized retail crime continues to present a serious challenge to the retail industry,” he said. “These criminal gangs are sophisticated, but so are retail loss-prevention teams.”

Law-enforcement and loss-prevention officers found that ORC gangs focus on jeans, high-end clothing, designer handbags as well as items consumers could buy at a supermarket or pharmacy such as infant formula, laundry detergent, razors, energy drinks and liquor. The gangs sell these stolen items on black markets. They also exchange stolen items for gift cards, which the criminals sell online or even in pawn shops.

A growing focus for ORC gangs is cargo theft. They’ll take cargo from distribution centers or they’ll steal goods while they are in transit from distribution centers to stores.

Another front for ORC is cybercrime. A study released by the NRF and the University of Florida in June found that 52 percent of retailers consulted for the study believed that the largest increase in ORC was on digital channels. Data breaches also are considered retail crimes.

According to a California Apparel News article covering that June study, cyber criminals hack into retailers’ computer systems and steal consumers’ credit-card numbers. Criminals then sell the stolen data to other criminals, or they use the credit-card numbers to establish fraudulent credit-card accounts.

Retailers surveyed for the December study said that they hope to combat ORC by changing return policies as well as point-of-sale procedures. They also plan to be more vigilant with employee screening and handling trespassing.

The study also recommended strengthening state and federal laws against ORC. Since January 2019, ORC can be prosecuted as a felony, according to a website for the law firm Greg Hill & Associates. It became a law after the California State Assembly passed AB 1065 in September 2018. The bill was introduced by Reggie Jones-Sawyer (D-L.A.) in 2017.

The law allows the prosecution of those who work with two or more people to steal merchandise from a merchant’s physical store or an online marketplace with the intent to sell, exchange or return merchandise for gain.