Organized Retail Crime (ORC): A Growing Problem or a Growing Fad?

One of the issues that came up time and time again in our research, was the question of how quickly ORC has grown in the past ten years or so.  Clearly, anyone who has read industry and mainstream media articles, attended trade association conferences, or visited industry message boards has seen a seemingly dramatic increase in ORC during that timeframe.  The recent NRF survey on ORC that was released in May had 73% of respondents saying that ORC incidents had increased for them over the previous 12 months.  Dr. Hollinger also added a new category to his annual NRSS to report a few years ago to start tracking this issue.

We have also heard some counterpoints to the growth of ORC in the past years.  For instance, Charlie points out in a comment on our previous post, that professional shoplifting has always existed in our industry and questions whether we have just given it a new name and expanded the definitions.  In fact, if you read our post on the varying definitions of ORC that are being floated about, it is clear that definitional issues come into play anytime you try to estimate the total impact of ORC or its growth.  In the 2007 NRSS report, responding retailers still only estimated that about 25% of their shoplifting losses were attributable to ORC.  It will be interesting to see how that trends when the final 2008 report is released.

Another consideration is whether part of the “growth” in ORC is attributable to the increased capabilities and attention of retail loss prevention groups.  Incident tracking databases – both internal and industry-wide, improved communications via email, and digital CCTV which can be easily viewed and shared may all contribute to increased visibility of the problem.  Couple the improved tools with an increased focus on the issue and it is easy to see why it would feel like a growing problem.

Where do we come down on the issue?  The simple answer is “We don’t know.”  One must resolve the definitional issues before you can make any pronouncements about scope or trend.  And, we don’t have any baseline data from previous years.  But, regardless of whether it is growing as explosively as it seems or not, ORC is a real issue for many retailers and causes significant losses and we know that is a growing concern for the industry that warrants further research and assessment.

One Response to Organized Retail Crime (ORC): A Growing Problem or a Growing Fad?
  1. Richard Alvarez
    August 21, 2009 | 4:25 AM

    Great topic. Organized Retail Crime has been in existence for a very long time. I first learned of Organized Retail Crime teams while employed by Mervyns in 1997. Back then these teams were known simply as ” The South Americans.” It took me about a year to have my first encounter with one of these teams. Their efficiency, planning, communication using non- verbal gestures, and execution of plans was absolutely impressive to me.

    The following twelve years I came to the conclusion that these teams have always been here. In most cases they have escaped detection due to a couple key factors. First, organizations have improperly trained their store level teams to focus on people vs. target merchandise items. More specifically, your average undercover agent will spend endless hours concentrating on obvious suspicious guests and discounting the guests exhibiting suspicious behaviors. This approach will only identify your opportunist or wreckless shoplifter.

    More emphasis needs to be placed on seasonal theft trend items. Most of these ORC teams travel extensively. They usually target items by season. On hand inventory counts should be compared to visible shelf or backstock outages. Camera placement should be strategic and moved to follow activity.

    Organizations are trimming expense dollars from store level positions. This can hinder identifying incidents quickly. In most cases when the discrepancies are identified, the incident has occurred days before. Days equal miles. These teams rarely stay in the same city or Region for long periods. This is where the importance of quick incident reporting is effective. The quicker the incident is reported, the higher the likelihood of identifying their travel path.

    Our field needs to invest a little more time analyzing past incidents to identify or anticipate the next ORC incident. I firmly believe that every organization is being impacted by these types of groups. Through the years I’ve also realized that “The South Americans” included people from just about every ethnic background.