ORC theft flourishes as more Americans look to save money through online marketplaces.
Something’s in the air—and it’s more nefarious than the epic 2023 pollen count in the United States.
While relief is in a shopper’s sight, most allergy medications remain behind plexiglass, requiring a store associate to unlock your post-nasal drip.
Shoppers, who are used to the anti-retail-theft devices retailers employ to showcase alcohol and electronics, now must wait to buy basic household items. Purchasing scores of SKUs, from razor blades and printer ink cartridges to infant formula and batteries, is no longer self-serve and requires the help of increasingly scarce retail workers.
Industry experts and retail companies say the rise of organized retail crime drives the increased security measures. After the COVID-19 pandemic led to widespread store closures and lockdowns, shoppers turned to e-commerce in droves, providing these shoplifting syndicates a considerably larger customer base and bigger yields on their crimes of opportunity. And their digital consumer base will continue to grow: The Federal Reserve Bank of St. Louis projects online shopping will account for 25% of total retail sales in 2030, up 10 percentage points from 2021 receipts.
As more people embrace the joy, as well as the convenience of online shopping, experts expect ORC networks to expand.
“It keeps going back to the lack of accountability, and the massive profitability that criminal actors are experiencing as a result of the fact that they can hide behind their computer screens,” Lisa LaBruno, the senior executive vice president of retail operations for the Retail Industry Leaders Association told CNBC.
These ORC networks employ a hierarchy to get the goods. At the bottom of this illicit supply chain are opportunistic crews, called boosters, who steal items from stores. Payment for those goods, which is a fraction of retail cost, is paid by fencers. These folks then resell the stolen goods. In some cases, neighborhood shop owners or street market vendors receive the merchandise. But most often, sellers flood online marketplaces with “incredible deals” on “new-with-tags” products like power tools, jewelry, over-the-counter medications, beauty products, fragrances, and toiletries.
“What [retailers] are dealing with is a high frequency of theft, repeat offenders, and large quantities of merchandise being stolen—really, indicative of organized groups,” David Johnston, vice president of asset protection and retail operations for the National Retail Federation, told CBS News in an interview. “When someone sweeps a shelf of Tide detergent or looks at taking an entire shelf of white strips, that’s not for personal consumption. There’s something behind them.”
In an April 2023 report, the NRF said the average shrink rate— an accounting term used to describe when a store has fewer items in stock than in its recorded book inventory—in 2021 was 1.4%, or $94.5 billion. That amount, “primarily driven” by theft, includes ORC theft. On average, retailers experienced a 26.5% annual increase in this kind of retail theft, and eight out of 10 retailers surveyed reported that workplace violence and aggression related to organized thefts rose in the past year.
Thieves keep their eyes on the prize, lifting what is easiest, most often small, everyday items that fetch big prices. While smash-and-grab heists make headlines, only 11% of the ORC groups examined in NRF’s report target luxury goods.
It's a lucrative business proposition for criminals. Earlier this year, the Chicago Police Organized Retail Crime Task Force led an intra-agency investigation that focused on the illegal sale of stolen pharmaceuticals and over-the-counter merchandise. The items, sold to people who would resell them out of state, netted the four men over $2 million per month.
What exacerbates the problem? Unscrupulous internet sellers and less discriminating customers fueling the market for stolen merchandise.
Since 2021, Amazon and eBay have required sellers to provide identifying information and pass verification measures causing many illegal online sales operations to close up shop. So, the purveyors of stolen goods headed to peer-to-peer platforms where buyers and sellers conduct their own transactions. Listings flourish on Craigslist and Facebook Marketplace, where NRF researchers discovered illicit gains can satisfy buyer demand.
Sellers have the goods, especially Tide Pods, but let the buyer beware.
According to NRF’s analysis, about 25% of search results over a two-month period for typical ORC goods or keywords had elements associated with organized retail crime. Laundry detergent pods, cosmetics, and baby formula appeared most often, which the organization said tracks with what law enforcement and loss prevention professionals uncover in their investigations.
Shoppers looking for deals on Facebook Marketplace or Craigslist should consider that their ZIP codes also can point to ORC theft. NRF’s research revealed that nearly a third of search results in Los Angeles, Houston, and the greater Miami area were suspected ORC goods. Overall, about 25% of search results for typical ORC keywords appeared linked to ORC across 21 cities on these two peer-to-peer platforms.
While current economic conditions pinch shoppers’ bottom lines, there’s more at stake than bagging a bargain at the expense of a major retailer’s annual sales. Online buyers should consider how their deals are really steals, ones that cost the average American family more than $500 a year, according to a 2022 U.S. Homeland Security Investigations report.
There are potential costs to human life as well.
Raul Aguilar, who oversees international organized crime cases for DHS, warned that organized retail crime is an “absolute threat” to U.S. public safety and public health. He told ABC News that law enforcement officials are linking violent crime syndicates—drug cartels, groups suspected of terrorism, and human traffickers—to established ORC networks and cashing in on huge paydays to fund other illegal activities.
Consider that sobering thought when it’s cheaper to use online marketplaces to alleviate allergy symptoms.