CEOs of Target, Best Buy, CVS and other retail chains ask Congress for help amid rising crime

Retailers Call on Congress to Crack Down on Organized Theft

The CEOs of major retail giants like Target, Best Buy, CVS, and others are appealing to Congress to take action against the rising tide of organized retail theft. This problem, which has seen a significant increase in recent years, is costing businesses over $1 billion annually and causing an average loss of $719,548 per store, according to a survey by the National Retail Federation in 2020.

The retail industry is grappling with the anonymity provided by the internet and the lack of verification by certain marketplaces, allowing criminals to profit from stolen or counterfeit products. These wrongdoers exploit vulnerabilities in the system to sell their ill-gotten gains, creating a serious challenge for retailers.

In a letter to Congress, the Retail Industry Leaders Association (RILA)—a trade association representing retailers—emphasized the need for legislation to help consumers identify sellers and make it harder for criminals to hide behind fake identities when selling stolen goods online. Signed by CEOs like Dollar General, Levi Strauss, Kroger Co., and Footlocker, the letter underscores the severity of the issue.

Organized Retail Crime (ORC) has become a significant problem for retailers. High-end stores like Nordstrom and Louis Vuitton have been targeted in several mob attacks in cities like San Francisco, Los Angeles, and Chicago. On Black Friday, Best Buy stores in Minnesota were also hit by heists.

Best Buy CEO Corey Barry acknowledged that retail theft is a growing issue, and the company is implementing additional security measures to protect employees and customers. Barry previously expressed concern about the emotional impact this issue has on workers and stressed the importance of creating a safe environment.

The retail industry is grappling with the escalation of organized retail theft. A survey conducted by the National Retail Federation in 2020 revealed a nearly 60% increase in organized retail theft compared to 2015. This troubling trend has resulted in businesses losing more than $1 billion annually and an average loss of $719,548 per store.

Experts in the retail sector agree that the risks associated with these bandit gangs are growing and becoming increasingly concerning for both retailers and customers. Neil Saunders, an analyst and managing director at GlobalData Retail, pointed out that security personnel and store staff can take action against individual shoplifters but struggle when dealing with organized crime networks due to their superior numbers and resources.

Related Reading

Several legislative and technological measures can be implemented to combat organized retail theft, as advocated by the retail industry's CEOs. These strategies include:

Legislative Measures

1. Stricter Penalties:
2. Applicable state laws, such as those in California and Texas, classify Organized Retail Crime (ORC) as a felony, imposing harsher sentences for bulk theft.
3. Initiatives at the federal level, like the INFORM Consumers Act of 2023, require online marketplaces to verify seller identities, making it harder for thieves to sell their stolen goods anonymously.
4. Prosecution of Leaders:
5. Laws targeting the financiers and organizers of ORC help dismantle networks at their core, focusing on disrupting large-scale operations rather than punishing low-level boosters.
6. Enhanced Online Marketplace Accountability:
7. Websites like Amazon and eBay now require seller IDs and limit bulk sales of high-theft items, making it harder for stolen goods to be resold.

Technological Measures

1. AI and Predictive Analytics:
2. Retailers use AI-powered cameras to detect suspicious behavior and predict potential theft risks based on historical data.
3. RFID and Blockchain Technology:
4. RFID tags and blockchain technology help track merchandise and ensure supply chain transparency, making stolen goods harder to sell.
5. Surveillance and Monitoring Systems:
6. Integrating security systems, such as alarm systems, surveillance cameras, and access control, enables centralized monitoring and quicker response times.
7. Employee Training and Awareness:
8. Employees should be trained to recognize suspicious behavior and follow established protocols for responding to theft.
9. Private Sector Collaboration:
10. Retailers like Target and Walmart collaborate to invest in technology, such as license plate recognition and facial recognition systems, to deter theft and bolster security measures.

Public Awareness Campaigns

1. Consumer Education:
2. Campaigns like "You Buy, You Die" warn consumers against purchasing stolen goods, reducing demand and making it harder for thieves to sell their items.