Organized Retail Crime Continues to Be a Serious Threat to Merchants

On November 18, 2019 By admin

For those in the business of retail, worrying about operations, sales quotas, and local store marketing is one thing. Worrying about organized retail crime (or ORC’s) is another issue altogether.

According to an ORC study released by the National Retail Federation (NRF), despite advances in security technology and the shift of more stores towards e-commerce, it would seem that organized retail crime is continuing to grow, with nearly three-quarters of retailers surveyed reporting an increase during the period of 2017 to 2018.

The study on organized retail crime involves the input from 66 loss professionals at different types and sizes of retailers. According to the insights they have provided, return fraud has continued to grow as some retailers have broadened their policies to allow items that were bought online to be returned in-store.

Key Findings of the Organized Retail Crime Study

About 92% of companies responding to the survey said they had been victimized by ORC in the previous year, and 71% said that ORC activity is increasing. 

The top locations for ORC activity include many of the nation’s biggest retail markets — New York City, Los Angeles, Miami, and Chicago, among others.

Specifically, 38% of those surveyed said the number of online purchases returned to physical, brick-and-mortar locations had increased, and 29% said a growing number of those returns were fraudulent.

Other factors that contribute to the growth of organized retail crime include:

  • The ability to dispose of stolen goods more easily by selling them online.
  • The rise in the use of fraudulent gift cards
  • Criminal elements can identify stores experiencing staff shortages, and subsequently taking advantage of overwhelmed staff 

Furthermore, retail items from more top-tier, more buzz-worthy brands also tend to be more likely targets of ORC.

Interestingly, 29% of retailers surveyed said ORC activity occurred even before their merchandise reached their stores– usually in the form of cargo theft at different points in their respective supply chains. The study also pointed out that ORC incidents happening in supply chains have declined sharply from 44% two years ago. 

What Is Being Done to Combat Organized Retail Crime?

“Retailers continue to deal with increasing challenges and complications surrounding organized retail crime,” said Bob Moraca, NRF Vice President of Loss Prevention. “These criminals find new ways to expand their networks and manipulate the retail supply chain every day.”

The NRF’s 2018 ORC survey reveals that losses incurred by the retail sector due to organized crime in 2017-2018 have averaged a record $777,877 per $1 billion in sales. This statistic is an increase of 7% from the previous year’s $726,351.

What is the retail industry doing in response to these statistics? “The retail industry is fighting this battle by upgrading technology, improving relationships with local law enforcement and taking steps such as tightening return policies,” says Moraca. “But it is a never-ending battle.”

Indeed, more retailers have turned to better in-store security strategies to curb in-store theft. Video surveillance, RFID technology, and the use of smart security technology are some of the more common anti-crime measures employed by retailers today.

While the rise in organized retail crime means that retailers need to make security and anti-loss strategies more of a top priority, respondents of the NRF survey also believe laws should be tougher. 

The study noted that some states have changed the amount of goods that need to be stolen for a theft to qualify as a felony, so thieves may be able to steal more without risking a misdemeanor offense. 

Return Fraud Continues to Post a Threat to Retailers

One of the most serious threats faced by the retail industry today is return fraud.

According to retailers, an estimated average of 11% of their annual sales will be returned this year, and that 8 percent of those returns are likely to be fraudulent. In addition, retailers also expect an estimated 12% of returns to not include a receipt, and 21% of those are likely to be fraudulent as well

Furthermore, 38% of retailers surveyed reported in an increase in online purchases returned to a physical location, and 29% of survey respondents also cited an increase in those returns being fraudulent. 

About the NRF

Based in Washington, D.C., the National Retail Federation is the world’s largest retail trade association, representing the interests of all sorts of merchants from the United States and more than 45 countries. 

Their membership including internet retailers and brick-and-mortar stores of all kinds: discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, and even chain restaurants, among others.

Retail is the nation’s largest private-sector employer, supporting one in four U.S. jobs — 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.

Inspection Services by CalAtlantic Security Systems

On November 9, 2019 By Eric Lay

Some businesses have the belief that, after installing a couple of security systems or deploy video surveillance networks around their property, they can now rest easy and not have to worry about thefts, break-ins, or other criminal activity against their establishment. 

While it’s true that your business is still a lot better off with these systems in place (as opposed to not having any at all), there might still be gaps in your current security measures that more determined and motivated criminal elements can exploit. 

For this reason, CalAtlantic on-site inspection services are necessary. Regular comprehensive safety and security inspections are integral in ensuring that your business is properly protected. 

Trained security consultants will check your establishment, paying particularly close attention to your security system, access controls, and how these all stack up against compliance standards, current best practices, and other set criteria. 

Common Security Issues for Businesses 

Having been in business for more than 30 years now, CalAtlantic has identified some of the more common lapses or shortcomings some establishments have when it comes to safety and security:  

  • Poor or inadequate lighting (whether inside or outside the establishment) 
  • Poor or inadequate ability to properly survey the perimeter of your asset, whether by full-time in-house security teams or via video surveillance. 
  • Outdated, defective, or non-functional security and safety equipment 
  • Failure to regularly test on-site security equipment, which may include smoke detectors, fire extinguishers, alarms against intrusion, among others. 
  • Overly lenient or outright negligent security procedures. 

Of course, each business has unique security needs and requirements, and the items included above are just examples of some of the more commonly identified gaps in safety and security.   

These are just some of the concerns our security consultants watch out for. Depending on the industry, size of the company, security goals, and other determining factors, recommendations on the best possible solutions will now be proposed.  

Assessing Your Security 

After a thorough inspection of your property, an important part of your company’s safety and security assessment is checking compliance against all required standards set by local, state, and federal bodies.  

Requirements will definitely vary according to industry and location, and you’ll want to make sure you have any compliance issues addressed right away if any have been identified.  

Now, as far as your physical security risks go, our security consultants will share with you their observations, insights, and recommendations. Options will then be presented, taking note of possible scenarios, emergencies, and other risk mitigation measures.  

Additional security measures may also be recommended, which may include some of the following: 

  • Security lighting. These will likely include energy-efficient intelligent lighting systems.
  • Surveillance systems. Strategic locations will be identified for optimal placement and coverage, helping deter criminal elements. 
  • Access control. Delicate and sensitive areas can be further secured by advanced keyless security, limiting access to just a few key employees. 
  • Burglar alarm monitoring systems. These can cover a broad spectrum of anti-intrusion measures that include perimeter sensors, motion sensors, breakage sensors, as well as vaults and safe systems. 
  • Fire and life safety measures. Helps protect your employees and other business assets by means of early detection as well as timely security measures in the unlikely event of natural disasters or other workplace mishaps. 
  • Business automation. For additional remote security options, smart office controls, and  other automated security features.
  • Business analytics. Vastly improves your on-site surveillance systems by integrating an advanced IP solution, 

Whatever adjustments you decide to choose to employ after your CalAtlantic Inspection and Assessment, your company has to properly enforce your new security measures through policy, 

Call CalAtlantic for Comprehensive Inspection Services Today 

When it comes to on-site security, you’re looking at protecting not just your people and your property, but your company’s proprietary information and your public image as well.  

Safety and security are just as important to us as it is to you and your establishment. 

Get in touch with our team today and schedule an appointment with one of our professional security consultants. Let’s talk about your company’s security needs and goals, and how CalAtlantic can work for you.  

Call CalAtlantic at (877) 686-5859 today.