Retailers Face Organized Shoplifters, E-Fencing

The number of U.S. retailers who say they have been the victims of organized retail crime rose more than 6 percentage points in the past year, according to the National Retail Federation's 2008 Organized Retail Crime report released Wednesday.

The report, which surveyed 114 loss prevention executives at retailers nationwide, found that 85 percent of survey respondents said their companies were the victims of organized retail crime in the past 12 months, up from 79 percent in 2007.

"The leading factor as we see it is really the profit these groups are making from stealing the goods," NRF Vice President of Loss Prevention Joseph LaRocca said in an interview.

"Organized retail crime is being recognized now as a lower risk, high reward crime and these groups have become very sophisticated and very skilled at stealing from stores."

Organized retail crime involves groups of shoplifters, who often steal vast quantities of goods and typically resell them on websites, at flea markets or in other stores.

Sixty-three percent of respondents to the survey reported an increase in so-called "e-fencing" activity in the past 12 months -- the sale of stolen product or gift cards using online auction sites and marketplaces.

LaRocca said online auction sites "have been a very profitable business for the criminals."

"Their marketplace is now all through the U.S., even worldwide, so they now have a bigger customer base and lower inherent risk," he said.

According to the Federal Bureau of Investigation, organized retail crime accounts for as much as $30 billion in retail losses every year and LaRocca said 1.5 cents out of every retail dollar spent goes to covering the cost of retail losses.

The survey found that 54 percent of loss prevention professionals feel their top management understands the complexity and seriousness of organized retail crime, up from 39 percent who said their executives understood the severity of the issue in 2005, when the survey was first conducted.