Jun 10, 2009
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Organized theft up against retailers, study says

Jun 10, 2009

CHICAGO (Reuters) - More than nine out of 10 U.S. retailers say they have had merchandise stolen by well-organized crime rings, according to a new report from a leading trade group.

The National Retail Federation said 92 percent of retailers said they had been a victim of organized crime over the past year, up from 84 percent in last year's survey.

The survey found that 73 percent of the 115 retail companies surveyed had seen increased criminal activity over the past year, up from 62 percent last year and 46 percent when the study began in 2005.

The retail sector has suffered from the recession as a drop in customers has forced businesses to lay off workers, cut employee pay and suspend benefits just to survive. At the same time, retailers are seeing a spike in crime.

"Organized retail crime rings have realized that tough economic times present new business opportunities by stealing valuable items from retailers and turning around to sell the merchandise to consumers looking for bargains," Joe LaRocca, the trade group's senior asset protection adviser, said in a statement.

Advanced retail thieves work in groups to steal thousands of dollars worth of in-demand designer clothing, over-the-counter medicines, infant formula, gift cards and electronics through tactics ranging from sophisticated UPC code swapping to blatant grab-and-run attacks, the study says.

These thieves then conspire to warehouse the stolen merchandise and then resell it at near-market value at swap meets, flea markets, pawn shops and temporary stores.

Six out of 10 retailers say they have identified stolen merchandise and gift cards in those places. The same percentage also found them at online auction and sales sites, such as eBay and Craigslist.

The study warns that half of "new in box" and "new with tags" merchandise for sale in these places has, in fact, been stolen. This is problematic because online shoppers often prefer these "new" items, thinking defective merchandise could still be repaired by or returned to the manufacturer even if they bought the product from a stranger.

As for law enforcement, 61 percent of the NRF survey respondents said they did not believe the police understood the complexity or seriousness of such crimes.

(Reporting by Ian Sherr; Editing by Lisa Von Ahn)

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