Cargo theft poses major problem for retailers, NRF Survey

08 Jun '11

5 min read

Organized retail crime isn't only costly for businesses, it's dangerous, and the problem extends far beyond stores, according to NRF's seventh annual Organized Retail Crime survey. Of the 129 retail companies surveyed this year, nearly all (94.5%) have been the victim of organized retail crime in the past 12 months, an increase over last year and the most in the survey's history.

An increasing number of retailers said thieves are becoming more brazen and that, on average more than one in 10 organized retail crime apprehensions (13%) lead to some level of violence, such as physical assault and/or battery.

“Organized retail crime affects virtually every single retailer in America, impacting everything from the bottom line to the safety of people in the stores,” said NRF senior asset protection advisor Joe LaRocca. “As criminals become more brazen, retailers are working fervently to cut down on organized retail crime activity in order to ensure the safety of their associates and shoppers.”

Not only are criminals becoming more violent, members of these crime rings are often engaged in other illegal activities. According to the survey, retailers estimate that 41 percent of apprehended offenders are involved in “gateway” crimes including drugs, weapons and gang activity. Additionally, retailers report that, on average, 12 percent of their organized retail crime cases involve collusion between internal and external actors, shedding light on the substantial role a handful of corrupt employees can play in organized retail crime.

In addition to the increase in the number of retailers who have been victimized, the level of organized retail crime activity has continued to increase. According to the survey, 84.8 percent of retailers believe organized retail crime activity has increased within the last three years.

As the economy forces retail executives to pay close attention to every line item in their budgets, loss prevention executives say senior leadership is more likely to understand how organized retail crime impacts the company's bottom line. Over half of survey respondents (58.3%) believe their top management understands organized retail crime, a 16 percent increase over last year. As a result, many companies are allocating additional resources – including more personnel and greater investment in technology – to combat the problem.

Survey Indicates Cargo Theft Poses Major Problem for Retailers

While organized retail crime has historically highlighted coordinated thefts in stores, retailers were asked for the first time this year what threats exist before the merchandise even reaches the shelves. Results indicate that organized retail crime should not be an issue solely addressed at the store level, as half of retailers (49.6%) say they have been a victim of cargo theft in the past 12 months. While theft often occurs en route from the distribution center to the store (57.4%), retailers also are also victimized at other points along the supply chain, including between the manufacturer and the distribution center (39.7%), at the distribution center (22.1%), and as merchandise moves from one store to another (22.1%)

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