Organized Retail Crime

  • 2 min read

For any company that sells products that end up in the retail marketplace, organized retail crime, or ORC, is a potential risk to keep in mind and try to prevent if you’re a retail store. Obviously, things like shoplifting and inventory theft are big deals. Even as a manufacturer, organized retail crime can affect the distribution of products in your marketplace and put them in the wrong geographic area, which can affect the profitability of your vendors and retailers.

Most organized retail crime is for financial gain, not personal use, meaning that the organized group of people that steal large quantities of items aren’t stealing these items to use themselves; they’re using them. The best way to sell the items for a financial profit is to exchange them for cash, gift cards, or some other easily convertible form of asset. Usually there are multiple parties: there’s a booster, there’s a fence, and there’s usually somebody that’s transporting, sometimes repackaging, and then the person who ultimately sells it.

The amount of money lost through organized retail crime is two times that of robbery, burglary, theft, and larceny combined. So if you add all those other areas of business law, multiply by two. That’s how much is lost to organized retail crime. And some companies think it’s just shoplifting, but it’s usually more than that. Half the time it’s from insider participation. Some internal employee is either participating in it or allowing it to happen. engaging with this group to make it easier.

The resale of the products can really hurt your marketplace. So you lost once by not having the product to sell and the cost of that asset. You lose twice because when those products are sold in the marketplace, they’re sold at a discount, which establishes a lower price point. So a very thorough investigation and analysis of where ORC is affecting your business and what the markets are can help your company in two areas: 

  1. Losing the asset to begin with
  2. Eroding your market share and even the margins that you have on your current sales, keeping both of those from affecting your balance sheet.

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