In the 1980s the New York police identified that groups of shoplifters were stealing goods to resell them on the black market. This practice, known as organised retail crime, has now become a “multi-billion-dollar problem”.
According to Hanna Mohamad, theft from businesses is the number one cause of loss in the retail sector. However, there is no single government agency leading the area in loss prevention, and the problem is sometimes perceived as a ‘victimless crime’. However, in reality, retail theft in Australia, for example, costs businesses billions of dollars each year, and the loss is often passed on to consumers through increased prices.
Currently, there is a lack of detailed data on the extent of the problem due to under-reporting. From my perspective, little is recorded about this industry-led crime in Jamaica, as there is no agency collating these data. In New South Wales (NSW), Australia, for example, Reuters reported that retail theft has risen by 23.7 per cent between 2021 and 2022. However, overseas markets facing similar problems have begun to address some of the risks associated with retail theft. However, there is a growing trend internationally of Government and the retail sector working together to prevent this crime.
Mohamad also pointed out that in the United Kingdom, in 2009, the Home Office in partnership with the British Retail Consortium (BRC) established a National Retail Crime Steering Group (NRCSG) to discuss and devise strategies for retail crime. The group has representatives from both large chains and small retail associations, as well as from across the Government.
The steering group has four main objectives, which are currently underway. The aim is to obtain a better understanding of the impact of crime on the retail sector and encourage better reporting of offences. Their four main objectives are to:
1) oObtain a better understanding of the impact of crime on the retail sector and encourage better reporting of offences;
2) enable retailers to develop effective practices in designing out the opportunities for offences/offending behaviour;
3) encourage a more consistent approach to the sentencing of offenders; and
4) identify effective practices and ensure stakeholders adopt them.
Mohamad also referenced a study in which retailers are not aware of how much they lose to shoplifting because of the deficient stock control and poor statistics on retail crime. It is difficult to identify the proportion of shrinkage attributable to customer theft. Moreover, only a small percentage of retail crimes are witnessed, with the remainder being established by audit, indicating that retailers would have difficulty establishing when and how retail theft occurs in their stores.
Retailers are hesitant to report the offence to the police because of various reasons. In a recent survey of retailers in Bankstown, NSW, several reasons were cited for not reporting shoplifting incidents. The three main reasons that they found out too late to report it, are:
a) They did not think the police would be able to do anything about it.
b) They felt it was not worth reporting.
c) They found out too late.
Other reasons cited in the survey include the individual offender’s circumstances, where shoplifters claim it is their first offence, show fear/remorse, and/or agree to pay for the stolen items.
Steve Francis, acting executive associate director of Homeland Security Investigating Organized Retail Crime, highlighted a survey prepared for the Retail Industry Leaders Association (RILA) and the Buy Safe America Coalition. Nearly 76 per cent of respondents said that a criminal has threatened the use of a weapon against an associate, and 40 per cent of asset protection managers (APMs) said that an organised retail criminal has used a weapon to harm an associate.
Therefore, retailers are now forced to hire extra security for their storefronts and during transportation, additional expenses and labour costs for locking up products typically stolen, all making up for lost profit from the thefts. This drives higher prices for consumers and lower sales for retailers. Organised retail crime now costs retailers an average of US$700,000 per US$1 billion in sales, and three-fourths of retailers saw an increase in organised retail crime in 2020.
The online marketplaces, Francis noted, have made it even easier for criminals to sell stolen goods anonymously, from any location. Cleaners typically work for a fencer, or a diverter, and they are responsible for cleaning the product. The cleaners ensure the stolen goods have no indications of theft by removing retail anti-theft stickers with lighter fluid and heat guns. This often occurs at repackaging facilities, which are illicit operations often in small warehouses or businesses. In the repackaging facilities, they convert stolen goods into looking like their own product by counterfeiting lot numbers, packaging, and shipping labels. Often cleaners may issue new labels to increase the selling price and confirm the stolen merchandise cannot be traced. The cleaner will ship the product to the diverter. Typically, small local shipping locations are leveraged for selling stolen products.
Violence and abuse against people working in retail have almost doubled to pre-pandemic levels. The latest figures from the BRC’s Crime Survey reveal that incidents, including racial and sexual abuse, physical assault, and threats with weapons, rose from the pre-pandemic high of over 450 per day in 2019/20, and confirming that online marketplaces have made it easier for criminals to sell stolen goods from any location while remaining anonymous. Retail crime not only has a huge emotional and physical impact on people but also a significant financial cost.
The problem is further complicated by the increasing use of self-service checkouts in some stores. Although more convenient for customers, self-service checkouts often lead to fewer shop assistants, meaning there is less human surveillance and guardianship over the front of the store. Consequently, potential offenders may have more opportunities to commit crimes and less chance of being caught. Therefore, the costs saved by having fewer staff on the shop floor need to be considered in light of the costs of customer theft, but does it work?
In October 2023 a customer reported purchasing goods from a Walmart store and paying at the checkout point of sale. He exited the store and a rep took his receipt and indicated that he saw it. However, when he was about to put the goods in his vehicle he noticed an item and examined the receipt; it was not on it.
Isabella Lucy has highlighted that the US Chamber is dedicated to working alongside federal, state, and local policymakers in order to address the problem of organised retail theft. At the federal level, the US Chamber was involved as part of a broad coalition to pass the INFORM Consumers Act. This Act takes an important step towards preventing criminals from accessing online marketplaces by requiring high-volume, third-party sellers to disclose and verify their identity.
The US Chamber also encourages states to pass laws that define organised retail theft as a separate offence and urges local prosecutors to prosecute offenders to the fullest extent of the law. Also, the US Chamber seeks to encourage coordination among federal, state, and local law enforcement agencies to bring these groups to justice.
Kaitlyn Ridel, senior director, digital content, believes that the INFORM Consumers Act “would increase transparency and identity verification of high-volume, third-party sellers in online retail marketplaces, while protecting the privacy of small sellers and establishing a uniform federal standard that would provide certainty and consistency for the business community. This legislation would deter retail crime by closing off a prominent avenue by which criminals seek to profit by selling stolen goods, often to unsuspecting customers.
Jamaica may therefore, in a joined-up government approach, examine and take action on this issue in similar vain.
Christopher Bryan has read for master’s degrees in government and national security and strategic studies. Send comments to the Jamaica Observer or firstname.lastname@example.org.