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Retailers Seek Solutions for Organized Thefts

As online auction sites have made the selling of stolen goods more profitable, organized retail crime has mushroomed into a $15 billion per year problem for the grocery and drug store industries, according to presentations given last week during the Organized Retail Crime Issues and Opportunities session at the 2008 Food Marketing Institute Show. Presenters John Griffin, mid-Atlantic

LAS VEGAS — As online auction sites have made the selling of stolen goods more profitable, organized retail crime has mushroomed into a $15 billion per year problem for the grocery and drug store industries, according to presentations given here last week during the “Organized Retail Crime — Issues and Opportunities” session at the 2008 Food Marketing Institute Show.

Presenters John Griffin, mid-Atlantic investigations team leader for Target, Minneapolis, and Bob James, corporate investigator and ORC coordinator for Safeway, Pleasanton, Calif., encouraged retailers to use a combination of tactics, ranging from installing new closed-circuit television equipment at store level to collaborating with law enforcement and other retailers in their region to help bust rings of thieves.

“During the past eight to 10 years, [organized retail crime] has gone from a minor problem to a major problem, and it all has to do with the Internet,” said Griffin. He explained that a decade ago, prior to the growth of online auction sites, organized shoplifters fenced their stolen goods primarily through local pawn shops and flea markets, limiting the potential for profit and increasing their risk of getting caught by local law enforcement.

Now, however, the anonymity permitted by Internet auction sites, along with the low-risk, high-reward nature of the crime, has created a new breed of shoplifter who can steal as much as $4,000 or $6,000 worth of merchandise in less than 10 minutes. Griffin said that the fences who buy and launder these stolen products for redistribution or online sale used to make 30-40 cents on the dollar selling to pawn shops and flea markets. Now he estimates they're making 70-80 cents on the dollar.

Griffin pointed to a recent high-profile case in central Florida, where a ring of professional shoplifters made an estimated $60 million to $100 million in profits in only a couple of years.

To illustrate how emboldened these thieves have become, James showed a CCTV video of a group of three thieves looting a health and beauty care aisle. As two of the men posted lookout, the third shoved small, high-priced items off the shelf and into a large garbage bag, which he then simply carried out the front door of the store.

James said that Safeway had identified a number of targeted items, which include products like Oil of Olay, Gillette and Schick razor refills, baby formula, Crest Whitestrips, and many OTC medicines, such as Pepcid Complete, Claritin, Lamisil, Aleve and Advil.

Griffin said that partnerships with local law enforcement are crucial to reducing organized theft. Target provides grants for equipment and educational funding for local police in its market areas; in addition, noting that many local law enforcement agencies are strapped for staffing and funding, Target operates its own video and computer forensics labs to assist with investigations.

“We know that retail theft is a lower priority for law enforcement than violent crime,” Griffin explained.