Shoplifting spreads across America with dangerous and costly consequences

In November, a group of 14 people broke into a Louis Vuitton store in Oakbrook, Ill., As customers were inside and daringly walked away with merchandise valued at $ 100,000. The entire incident was caught on store surveillance video.
That same month, a group of at least 18 people broke into a closed Nordstrom store in Los Angeles’ famed upscale The Grove mall using a hammer and an electric bicycle. They took several thousand dollars in merchandise. And on Black Friday, one of the busiest shopping days of the year, as many as 30 people robbed a Best Buy in Minneapolis.

The crime usually involves groups of people targeting stores that sell higher value items such as electronics, handbags and branded clothing, who resell the merchandise in secondary markets, such as eBay, OfferUp and Facebook Marketplace or even in the legitimate supply chain.

“These are people who make a living by stealing and selling. This is not one-off or need-based opportunistic theft,” said Cory Lowe, retail crime expert and researcher at Loss Prevention Research Council, an industry coalition that studies retail crime, its impact, and solutions to address it.

Lowe said retailers were very concerned about the escalation of these armed robberies organized by groups in several cities across the country.

“The anatomy of these attacks shows that they are more aggressive, dangerous, and occur more frequently,” Lowe said. When I talk to retail loss prevention veterans, the best comparison they offer is what New York City crime looked like in the 1970s. But even then, it was more about theft. street and not brazen retail robberies like this one. “

Costly delinquency

As stores tighten security measures to keep employees and shoppers safe, retailers face another consequence of organized theft – its high cost to stores.

“For every $ 330 of stolen product, a retailer has to sell an additional $ 300,000 of merchandise to break even,” said Burt Flickinger, managing director of retail consulting firm Strategic Resource Group. “We’ve spoken to retailers across America who say shoplifting now accounts for 2-3% of their total sales. That’s a 0.7-1% increase before the pandemic.”

Power tools are so popular with professional shoplifters to Home deposit (HD) that the home improvement retailer launched a line of power tools last year that won’t work until they are scanned and activated for the first time at checkout, according to a report.

Home Depot said the additional safety measure was intended to deter the illegal resale of power tools.

According to the National Retail Federation.

These are products that professional thieves can resell a lot at once and make a lot of money, Lowe said.

The upsurge in store thefts is costly in other ways as well. Employee retention takes a hit when retail crime increases.

“Think of retailers whose staff are predominantly female, like cosmetic stores and high-end fashion,” Lowe said. “Criminals target these stores because they are high priced items and they anticipate little reluctance on the part of the staff. But fear makes it difficult to retain employees.”

Best buy (BBY) CEO Corie Barry said in November the retailer saw an increase in thefts from its stores by thieving gangs. Some of these incidents have involved weapons such as a gun or crowbar, she said.

“It is traumatic for our associates and unacceptable,” Barry said on a call with analysts in November. “We are doing everything we can to try to create [an] environment as safe as possible. “

She said Best Buy is implementing a number of tactics to minimize theft and protect staff and customers. These include locking out more products and securing hiring where applicable.

Elsewhere, drugstore chains have closed stores in neighborhoods where shoplifting persists. Walgreens, for example, closed a handful of stores in San Francisco, citing rampant shoplifting.

Then there is the wider community impact. Purchases in stores generate a sales tax, which in turn provides funding for essential public services such as public school budgets, medical facilities, and local police and fire departments.

“Recurring store thefts spread fear. They scare away shoppers who would normally spend time browsing stores and maybe doing some shopping,” Flickinger said.

Pandemic impact

Although organized shoplifting increased even before the pandemic, Lowe said post-Covid lifestyle adjustments made it easier for offenders to get away with it.

“Think about wearing a mask. Before the pandemic, would we have thought of everyone in a liquor store wearing a mask that covers half of their face and allows them to remain anonymous?” Lowe said.

A confluence of other factors has also contributed to the surge in dangerous thefts from retail stores over the past two years. These include a reduction in in-store staff which results in less oversight and the ease with which thieves benefit from a lack of regulations on the resale of stolen items online, Lowe said.

So are the rising thresholds for what constitutes a crime, he added. “What worries me as a society is if more people are starting to emulate these crimes,” Lowe said.
But in a survey of 55 retailers, more than two-thirds said the pandemic increased the overall risk of fraud and crime for their businesses, according to the National Retail Federation’s 2021 National Retail Safety Survey. . The report showed that 57% of retailers surveyed indicated an increase in organized retail crime during the pandemic.

About 50% of retailers surveyed reported an average dollar loss of merchandise of at least $ 1,000 in 2020, up from 29% in 2019. Overall, retail organized crime costs retailers on average $ 700,000 for $ 1 billion in sales, according to the NRF.

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