Organized retail crime not only costs businesses billions of dollars, but consumers also pay about $500 a year in higher costs, the president of the N.C. Retail Merchants Association told Charlotte Rotary Club members on Tuesday.
“They are always a little bit ahead of us,” says Andy Ellen. “The sophistication is through the roof.”
News accounts of smash-and-grabs only tell part of the story, says Ellen. He told about a husband-and-wife team that ran an item return scam that cost Lowe’s Home Improvement $750,000; a $5 million 2022 case in Kings Mountain where a person began selling about $500 worth of stolen items per week before escalating to $35,000 worth of goods each week; and a 2023 case where an 82-year-old Home Depot employee lost his life trying to stop a shoplifter from stealing $837 worth of goods.
“All this stuff, it happens all the time, and it’s tied to human trafficking, it’s tied to fentanyl, it’s tied to cartels,” says Ellen. “It’s not kids shoplifting a pair of sunglasses.”
Nationwide, businesses lose about $112 billion a year to organized retail crime, and federal, state and local governments about $15 billion, says Ellen. In North Carolina, businesses lost about $3 billion in 2021 to organized retail crime, he says.
Ellen started with the North Carolina Retail Merchants Association in 1998 as general counsel, a year after he graduated from Campbell University School of Law. He has led the 2,500-member group, whose business represents about 75% of the state’s retail sales volume, since 2012.
He says he wanted to talk about organized retail crime to the business group because he knows people are beginning to think about holiday shopping. Those involved in organized retail crime are nefarious. They’ll hold women captive and force them to participate in crime or recruit young people because they know their age will protect them from lengthy prison sentences. It’s also why many stores put items from razor blades to baby formula behind lock and key.
The crime takes many forms besides just shoplifting. A person may buy a $20 grill and put that bar code on a more expensive grill so they can buy it at a cheap price and then return it for a much higher price. Groups will take hundreds of gift cards, secure the numbers and then return them to stores. When a legitimate customer activates the card, the thief gets notified and immediately uses the card.
Online tools such as Facebook Marketplace can make bargain hunters unwitting crime partners, he says.
“If the price is too good to be true, it’s probably stolen,” says Ellen. In some cases, the bad guys are known to advertise an item online, just waiting for the shopper. “They haven’t stolen it yet, but once you order it they’ll send someone out to steal it.”
A registered lobbyist, Ellen praised North Carolina lawmakers for stiffening the punishment for organized retail crime and closing loopholes. For example, a few years ago someone had to shoplift more than $1,000 before it was a felony. The law was changed so that repeat shoplifters can hit a monetary threshold to make the crime a felony rather than a misdemeanor.
Online shopping networks from Amazon to Ebay are fighting back by keeping track of large online sellers. Technology like license plate readers and cellphone tracking help law enforcement. Lawmakers have enabled prosecutors to work across county lines to prosecute cases, Ellen says.
The problem, says Ellen, people have found organized retail crime easier than robbing a bank. It involves the “fence,” or the mover of stolen items, and the “boosters,” those who go out and do the dirty work.
“They are sending people out every single day as an organized group and they know exactly what they’re doing,” says Ellen. Thieves will have maps of stores including locations of items, along with easy exits.
During a question and answer session, a Rotarian asked how many members had been a victim or knew a victim of credit card fraud. About a hundred hands went up.
Businesses lose products to organized retail crime and then sales when someone buys the stolen item from the thief. The crime also does collateral damage, says Ellen.
“The worst part of it is that it really scares the customers,” says Ellen.
Source: Business NC