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Compliance & Risk

Investigating modern organized retail crime & fraud

Jacob Denman  Product Marketing Manager / Risk & Fraud / Thomson Reuters

Dan Stark  Product Marketing Manager / Risk & Fraud / Thomson Reuters

· 5 minute read

Jacob Denman  Product Marketing Manager / Risk & Fraud / Thomson Reuters

Dan Stark  Product Marketing Manager / Risk & Fraud / Thomson Reuters

· 5 minute read

As more sophisticated levels of retail crime emerge, store owners have to be on guard in both the physical and the digital world against organized rings of thieves

Organized retail crime (ORC) is escalating, both in physical retail stores and in the digital marketplace. While the expansion of digital commerce has unlocked major opportunities for businesses, it also has ushered in a new era of fraudulent activities.

The alarming scale of this issue is captured by the 2022 National Retail Security Survey (NRSS), published by the National Retail Federation, which spotlights a nearly $100 billion challenge that retailers are battling in commercial theft. Retail shrink — a measure of inventory losses — is averaging around 1.4% of total retail sales. External theft stands out as a primary contributor, accounting for 37% of the total shrink, followed primarily by employee/internal theft (28.5%), and process/control failures (25.7%).

ORC has emerged as a particularly troubling trend within this industry. Retailers reported a startling 26.5% surge in ORC incidents since the post-pandemic uptick in retail theft. To put that into perspective, Target, reported an inventory loss of $500 million for 2023, amounting to a 100-basis point hit to gross margins in 2023.

And this is not just a financial concern — the human cost is also mounting. A significant 80% of retailers surveyed highlighted a rise in violence and aggression associated with ORC incidents over the past year. “Safety incidents associated with theft are moving in the wrong direction,” said CEO Brian Cornell as he reported that Target has seen a 120% increase in these incidents in the first 5 months of 2023, underscoring the urgent need for comprehensive strategies to tackle this issue.

Indeed, the primary purpose of ORC rings is to steal products for profit, not for personal use, according to a report from the U.S. Chamber of Commerce. Often, these organizations consist of two or more people who have distinct roles:

      • boosters, who steal merchandise from retail stores, often targeting easily re-saleable products such perfume, cosmetics, toiletries, and power tools;
      • fences, who purchase stolen goods and resell them, which is done at online marketplaces or at a physical location such as a flea market; and
      • organizers, who lead the ring by connecting individuals together, determining which products to steal, and providing operational details to commit the thefts. Not surprisingly, this role is the most insulated and the hardest to catch.

Depending on the size and complexity of the ring, there can be other people performing other roles involved as well, including drivers, look-outs, and people to compromise security systems.

Harnessing technology to investigate ORC

As organized retail crime grows in complexity, the tools used to investigate it must evolve in tandem. A major boost to investigating retail theft in the private sector is reliable access to real time data. To effectively combat ORC, data points such as live gateway access to identity data, license plate reader technology, fraud detection platforms for ecommerce, and visual recognition systems to identify repeat offenders can be force-multipliers in prevention.

Equipping corporate security professionals with the right technology is not the only step needed to tackle organized retail crime, of course. Law enforcement professionals need to effectively partner with retailers to meet this effort. Approximately 50% of incidents are not reported to the police, according to the Loss Prevention Research Council.

Indeed, the U.S. Chamber report goes on to say that 80% of surveyed individuals cite the primary reason for under-reporting is that the “police will not respond, investigate, and/or arrest.” Other reasons include “there is too much crime to report everything” and “workers are too busy to file reports.”

The stark reality presented by both the Chamber and NRSS reports is that ORC is on the rise, and it is going to take public and private partnerships to tackle this challenge. We need to recognize that ORC is more than a financial burden for many retail businesses but threatens the safety and well-being of our communities.

Thankfully, state governments have heard the alarm. At least nine states have passed laws targeting organized retail crime by stiffening penalties for these crimes since 2022. The federal government also has made it harder to sell stolen goods online with the passage of the INFORM Consumer Act, which requires online marketplaces to verify the identity of high-volume third-party sellers, thus making it harder to fence stolen goods.


Retailers, law enforcement, and government agencies need to prioritize investments in technology and personnel to combat the escalating ORC threat. Collaborative efforts are essential to create a united front against organized retail crime, and corporate and law enforcement partnerships, legislation, and data-sharing initiatives can help bridge the gaps in our defenses. Embracing real-time data access and advanced tools like license plate readers, identity verification systems, and fraud detection platforms can streamline data-sharing initiatives and enhance investigations.

The surge in organized retail crime is a significant problem for the retail industry. These are sophisticated organizations that are using increasingly violent tactics and complex networks to steal and fence stolen goods for profit. Corporations will need to invest in the right people and technology while encouraging cooperation with law enforcement to protect their retail spaces.

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