Retail theft, awareness of issue on the rise - May. 30, 2007

79 percent of major retailers say they've been hit by organized retail crime; industry joins law enforcement to take action.
By Chris Zappone, CNNMoney.com staff writer
May 30 2007: 6:36 AM EDT


NEW YORK (CNNMoney.com) -- More than three-quarters of retailers, 78 percent, said their company has been a victim of organized crime within the past year, according to a survey released Wednesday.

Seventy-one percent of retailers noticed an uptick in organized retail theft in the past year, according to the National Retail Federation's third annual Organized Retail Crime survey.

Organized retail crime rings steal merchandise such as baby formula, dietary supplements, power tools, designer jeans, and Victoria Secret clothes, then sell it at flea markets or online auction sites.

"Crooks are looking at the paths of least resistance," said Joseph LaRocca NRF vice president of loss prevention. "Violent crime or drug laws and penalties are more severe." And so stealing and reselling stolen goods, or fencing, is an attractive crime, said LaRocca.

A bit of good news: Retailers are identifying or recovering slightly more of their stolen merchandise. 61 percent reported having identified or recovered stolen merchandise from fencers, up from 59 percent last year.

And the number is slightly higher for identifying or recovering online fencing operations: up to 71 percent from 67 percent the year before. The survey is based on the responses of 99 retailers.

One in ten retailers spends over $1 million each year to fight and prevent organized retail crime, the release said.

Retailers, FBI coordinate policing efforts
In April, the NRF in conjunction with The Retail Industry Leaders Association, a trade group made up of the largest and fastest growing companies in the retail industry, and the Federal Bureau of Investigation launched a Law Enforcement Retail Partnership Network or (LERPNet), to allow retailers to track and identify organized retail theft via a secure web portal.

So far, 44 retailers, with 67,329 stores have joined LERPNet, LaRocca said. The database, which is housed and operated by the private sector, also gives access to law enforcement to track incidents.

LaRocca said the majority of the crimes have already been filed with police departments, although the incidents "might even get into our systems quicker because retailers can add data directly."

In time, the system will allow users to learn more about what states, stores, and merchandise are most at risk. "Aside from analytics, users will be able to use the system as alert network," LaRocca.

The LERPNet is an outgrowth of legislation passed in January 2006 requiring the Attorney General and FBI, in coordination with the retail community, to create a task force to fight organized retail crime.

The task force, staffed by the DOJ and FBI, "worked closely" with the NRF and RILA to create LERPnet.

The results of the National Retail Federation survey are based on responses of 99 retailers in all sectors of the industry.



Retail theft, awareness of issue on the rise - May. 30, 2007