“Just how bad is it?”
Already burdened with shipping delays, employment issues, inflation and ongoing worries over COVID-19, retailers are increasingly concerned about upticks in thefts and, more importantly, how to curb the behavior.
In recent months reports and viral videos of varying degrees of theft — including smash-and-grab heists by groups in luxury boutiques — have catapulted the issue to the forefront.
Factors like understaffed stores, employee theft, the abundance of online marketplaces to unload stolen merchandise, increasingly sophisticated criminals, lenient penalties and a collective anger among some have ratcheted up theft concerns in certain cities.
While shoplifting has been part of doing business for generations of stores, the problem with theft now — including shoplifting and organized retail crime — is not only that it’s costly, but it has led law enforcement officials to caution that it can fund other crimes, such as the drug trade.
In its 2021 Retail Security Survey, the National Retail Federation reported that 82 percent of respondents said risks and threats of mall or store violence and shooting incidents are more of a priority compared to five years ago. The report noted that there is no federal law to prevent organized retail theft. Yet more than 66 percent of respondents said the pandemic has increased risks for their organizations, with workplace violence topping the list at 61 percent and organized retail crime at 57 percent. The average retail robbery in 2020 netted more than $7,500 in product — a figure not seen since 2015.
While the median shrink rate for fiscal year 2020 was 1.3 percent, level compared to fiscal-year 2019, the average dollar loss per shoplifting incident was nearly $462 for full-year 2020, compared to $270 in full-year 2019, according to the report.
In 2019, theft and fraud cost retailers $62 billion. The NRF’s vice president of research and development, Mark Matthews, as well as some police officials were hesitant to provide more recent numbers, citing the number of stores closed permanently or temporarily during the pandemic as an example of how statistics may not be a true indicator of the current situation.
Meanwhile, law enforcement officials have been trying to crack down on theft via multiagency investigations. Last week state and federal officials in Oklahoma announced that 29 people had been arrested and charged with being involved in a six-state shoplifting ring that stole more than $10 million worth of goods.
Last month, Chicago’s Organized Retail Crime Task Force recovered tens of thousands of stolen items worth millions from several storage facilities. That marked the first major bust by the task force, which was spearheaded by attorney general Kwame Raoul. Apparel, beauty products, electronics, food and other items that had been stolen from national retailers were recovered. The public-private collaboration is a first for Illinois and is designed to foster cooperation among retailers, online marketplaces, law enforcement agencies and the state’s attorneys general. Announcing the seizure last month, Raoul said organized retail theft is more than lost revenue and stolen products. “Frequently, the criminal enterprises behind these crimes are connected to other crimes such as the drug trade and human trafficking.”
Over the last few months there has been much publicized footage of shoplifting rings striking luxury stores and other retailers in Los Angeles and in the Bay Area. In late December, San Francisco authorities seized nearly $2 million in suspected stolen merchandise following a two-and-a-half-year investigation into organized retail theft prompted by a series of thefts at Macy’s Union Square in December 2018. Two individuals were arrested and there are arrest warrants for three others with the accused facing organized retail theft, grand theft, possession of stolen property, money laundering and other charges. As a preventive measure, San Francisco district attorney Chesa Boudin secured funding for two property crime advocates for his office’s victim services division.
In New York City last year, there were 43,864 retail theft complaints compared to 32,358 in 2020 and 37,918 in 2019. Those figures include petty larcenies, grand larcenies and robberies that began as shoplifting, according to a New York Police Department spokesman. Earlier this month at the Americana Manhasset shopping center, masked thieves reportedly stole 20 handbags from the Louis Vuitton store. That case remains under investigation, a Nassau County Police spokesman said last week.
Two days after being sworn in as the newly elected Manhattan District Attorney, Alvin Bragg shared a memo detailing that his office will not prosecute low-level offenses such as prostitution, resisting arrest and shoplifting unless they are felonies, which are classified as crimes typically defined by violence and punishable by imprisonment.
Since the news was made public, Bragg has spent a lot of energy defending and explaining his position to “free up prosecutorial resources to focus on violent crimes.”
According to sources, the crux of the memo has been misinterpreted. The fact that not all shoplifting should be treated equally falls in line with Bragg’s belief that lengthy prison sentences have proven to be ineffective and some offenses are better dealt with through mental health channels or with community service. “It’s like a business,” one source said. “And in these cases, it’s important to go after the people who are funding it. If the kids who do the stealing are incarcerated, the rings will just hire different kids.”
But if thieves are armed, then it’s a felony and will be prosecuted. The advice to retailers is to install surveillance systems so these perpetrators can be apprehended, arrested and held accountable.
Whether the thieves were armed when they hit Rothmans men’s store in New York’s Union Square twice around the holidays, making off with some $20,000 in clothes, is unknown and the store’s owner wasn’t going to find out by resisting. “Merchandise can be replaced, people can’t,” said Ken Giddon, president.
Giddon has gone public with the details of the theft, penning a lengthy Facebook post in hopes of raising awareness of the situation and appearing in stories in the local press.
“My store, Rothmans on 18th and Park, was ransacked/robbed by the same group of young men, TWICE in the last two weeks of December 2021. I am not quite sure what the term is when a gang of thieves (five the first time, eight the second time) brazenly tears apart a store, punches a 61-year-old employee in the face, and grabs as much merchandise ($20,000 worth) as they can carry out. They were not particularly troubled by their actions, and figured that a repeat performance, since there were no repercussions, was a good idea,” he wrote.
“We called the police both times, but the group was long gone before any help could arrive. They had getaway cars parked down the block. The police were professional and sympathetic. They said it was happening all over the city, but their message was very clear. Do not engage, the perpetrators probably have weapons, and even if you stop them, or we arrest them, nothing will happen. You will waste your time in the system, and they will not be penalized.”
Giddon said although he has insurance, not everything is covered and there’s a deductible. Once a claim is submitted, his premiums are raised and he stands the risk of being dropped by his insurance company. “It’s a regressive tax on retailers: higher insurance premiums and added security,” Giddon said.
Last week Giddon said the new district attorney actually called him out of the blue to discuss the issue. He reemphasized his points and suggested the city create a task force to address the problem. Sources said New York City is in the process of creating just such a task force of small business owners and will announce it shortly.
But it’s not just New York where shoplifting is an issue.
Before Christmas, a gunfight at Chicago’s Oakbrook Center left four people injured. And in November, Chicago police presence was increased after 14 people stormed through a Louis Vuitton store in the shopping center, running off with a reported $150,000 in merchandise. A Chicago police department spokeswoman declined to provide any statistics about thefts and referred any comment about the issue of shoplifting to the Organized Retail Crime Task Force.
Understaffing continues to be in an issue for the police force in Portland, Ore., which was rocked in the past two years by protests and vandalism. Sergeant Kevin Allen said: “Shoplifting, both petty theft as well as organized retail theft rings, has been a big problem for many years both in Portland and around the country. We recognize the challenge it places on retail businesses both large and small. We have dedicated officers, who respond to calls every day and conduct investigations, as time and call load allow. But the truth is that we are not the police department that we used to be, and some services that we used to provide are not happening anymore.…The Police Bureau is the smallest it has been in modern times.”
The Portland Business Alliance is seeing a rise in shoplifting and break-ins at retail stores throughout the city, senior director of strategic communications Vanessa Briseno said. “Retailers and office buildings are having to take costly measures to curb crime and ‘harden’ their stores [with reinforced security glass, interior and exterior security gates and more sophisticated cameras and alarm systems]. Many of these features, especially for office buildings, are quite common in other cities, but we have not had to install them until now.”
Noting that more PPB members will be retiring and resigning in the coming months, Allen said hiring will not keep pace with that demand. The Portland City Council recently authorized additional funding to help with the problem, including hiring back retired officers and increasing recruitment. With training taking 18 months, Allen said: “We will not be able to recruit, train and deploy officers faster than we expect to lose them for a while. In the meantime, we are going to have to ask for our community’s patience in dealing with situations [such as shoplifting and organized retail theft]. We look forward to a day when we can more effectively address public safety issues at a level that the community expects.”
While videos of other smash-and-grab thefts in luxury boutiques in California went viral last month on the news and social media, the problem of organized theft is not restricted to designer merchandise. Last month the Seattle Police Department arrested 35 people in an organized shopping ring after they stole thousands of dollars of merchandise from a downtown Target store. Those arrested were later released. The incident shows that high-ticket items aren’t always what thieves are after — Seattle police recently made an arrest and recovered two or three dozen pairs of $25 Old Navy jeans, said Sergeant Randall Huserik.
“Our trend isn’t toward bigger-ticketed items, but toward a lot of smaller-ticketed items in these crazy mass quantities. We’ve had situations where people are going into Ulta, Victoria’s Secret and places like that and stealing thousands and thousands of dollars of lingerie or makeup. It was quite obvious when you looked at the person that we arrested that this stuff is not going to fit you. You’re clearly not stealing it for yourself,” he said. “But it’s those items that can’t be traced through a serial number or a model number that can easily be turned around and resold.”
Huserik also noted that some of the incidents in Chicago and the Bay Area featured groups of up to 50 people.
As for the root cause of such thefts, he speculated about the proliferation of online marketplaces that makes selling stolen merchandise easier. “Certainly, technology has enhanced criminal activities in so many ways,” he said.
A major key to figuring out how to improve the problem of theft will require determining the reasons people are doing it. The National Association for Shoplifting Prevention focuses on providing educational programs to the court system to prevent recidivism. Director of communications Barbara Staib said: “Our concern is that societally, we’ve gotten to a place where we’ve minimized the gravity of theft to such a degree that that is what allows people to say, ‘Hey, let’s get together and go rob Gucci.’”
Established in 1989 as a nonprofit, the association has worked with thousands of criminal justice professionals through the years and has educated between 750,000 and one million shoplifting offenders. “That’s just a drop in the bucket in the number of people that we need to reach,” Staib said. “Retailers are the first touch point with shoplifters. They apprehend them. Since the courts aren’t doing as much as they could and the police aren’t coming [as frequently], it’s harder to rely on the criminal justice system to educate offenders…we need to start looking at nontraditional ways. One of those ways is for retailers to get involved, and not prosecute and arrest low-level offenders. Don’t waste those precious resources on that if you can use education. But it has to be a onetime chance. It can’t be a revolving door. That is what we are working on now.”
Now that thresholds have been raised in the majority of U.S. states, and overburdened police and prosecutor resources are looking to reduce their involvement in petty-level crimes, Staib said: “This is what leads to the advent and continuation of organized retail crime. And gangs decide that shoplifting is worth the risk and I’m going to do my best to make a living at. Then it grows into organized groups stealing hundreds of thousands of dollars or millions of dollars [of merchandise]. And the advent of online marketplaces made it easier.”
Unlike 15 years ago, when thieves would have had to find a fence — someone to help them sell their stolen merchandise on the black market or via a flea market – now they can build an online store and sell the stolen goods to the “unsuspecting public that is just looking to get a bargain,” Staib said. While the NASP supports criminal justice reform, its concern is that the rush to do so is leading to the removal of traditional protective factors like police interdiction and prosecution — “the threat of punishment” — without replacing that with social and educational options, she said.
California’s state law Prop 47, which was passed in 2014, set the threshold for shoplifting at $950. The city of Dallas mandated years ago that it would not respond to any theft at less than $50. “Then they decided that that was so good at reducing crime, because they weren’t going out. It’s not that crime was being reduced. Then they raised it to $100,” Staib said. “This is a dangerously empowering message to society and even more empowering to would-be offenders or those who are prone to this type of activity.” Dallas Police officials acknowledged a media request, but did not follow up.
To stem the tide, the NASP is working with retailers to set standards to offer education to first-time nonviolent, cooperative offenders to change their behavior. “All our cities are seeing a rushing waterfall of crime. We’ve got to deal with it with things like the Reform Act to address the anonymity of the online marketplaces for ORC and groups that will prosecute cases across jurisdictions,” Staib said.
Some retailers have indicated in talks with NRF officials that there was a move to more multichannel fraud, since it was harder to be in stores during COVID-19. Having asked retailers if they experienced higher levels of retail theft so far this year compared to 2020, 75 percent said it was either significantly or somewhat higher, Matthews said.
Many vendors and software developers are creating products to help address shoplifting and other problems, he said. Retailers are taking a closer look at point-of-sale analytics and point-of-sale data mining. Adopting fingerprint technology, for example, is among the undertakings. “Obviously though that isn’t going to address the issues we see in some states of people rushing into stores, grabbing things and running out. When it comes to organized retail crime and smash-and-grabs obviously that’s a different kettle of fish,” Matthews said.
Based on NRF reports, Matthews said one of the more concerning things is that everyone said it’s becoming more violent. “That is hugely concerning. When you think about the workforce, it’s really problematic. That’s why it’s so important for us to get policy solutions in place so that retailers can work more effectively with law enforcement and state and local officials,” Matthews said.
Through its own Loss Prevention Council, which is comprised of senior leaders in that sector who regularly meet, the NRF has “certainly heard that this is more of a problem or something that they are concerned about. And it is something that they are increasing their budget to address,” he said, adding that more than 60 percent of survey respondents had done so.
Protecting the safety of employees is something that weighs heavily on retailers, he said. Companies are putting together training programs so that staffers know how to deal with such circumstances to know firsthand what company policies are and how to respond. From Matthews’ standpoint, people fail to understand the quantum of the impact of shoplifting.
“The problem is that retail is an industry where the margins have historically been slim. When you hear about the dollar figures that have been bandied about, they may not sound like huge numbers given that retail is a multitrillion-dollar industry [$3.5 trillion]. But remember that is a multitrillion-dollar industry on a sales basis. Profit margins are much much slimmer. If you’re losing a portion of those sales to shoplifting, that comes straight off the bottom line,” he said. “…They forget it is a low-margin industry, it impacts employees and the investments that companies have to make. It all adds up.”
While technologies are being developed and retailers are trying new practices to try to improve the situation, Matthews said creating legislation that would aid federal, state and local agencies with information sharing, more funding for policing stores and additional resources to target and root out organized retail crime and their involvement in loss and shoplifting are needed.
At a Boston area luxury shopping center, one security guard patrolling the concourse said that shoplifting incidents were about the same as last year. One change though is that the mall’s mask requirement has emboldened some people to shoplift, since masks make it more difficult to be identified, he said.
The practice of using velvet ropes or airport-like barriers at the entrance of luxury boutiques may have started as a pandemic-related precaution, but they are multifunctional. Yves Saint Laurent, Burberry, Salvatore Ferragamo, Christian Louboutin and Dior are among the numerous stores at Boston’s Copley Place that are using the barriers. As one security guard at the entrance to a European designer store said of the front-door barrier, “Simply, if someone steals something, I can stop them easier.”