Study: Threat of Organized Retail Crime Grows Larger
How pervasive is organized retail crime (ORC) in the United States? The National Retail Federation (NRF) estimates that ORC is currently a $30 billion problem for stores each year in the United States. Are NRF retailer polls truly indicative of the shoplifting epidemic or, as previous research suggests, is the majority of shoplifting not premeditated?
To find out, FaceFirst conducted a shoplifting recidivism study of biometric data from 100 big-box, pharmacy and grocery retailers spanning a six-month period. The study found that:
- 60 percent of known shoplifters were detected entering at least two separate locations of the same retail chain; and
- 20 percent of known shoplifters visited three or more locations of the same retail chain.
The results were enlightening, though not unexpected. The biometric data we analyzed proved that repeat shoplifters are far more organized and aggressive than previously known, deliberately striking the same retail brand multiple times across disparate locations. Unfortunately for retailers, shoplifters are incredibly loyal to their favorite brands.
While previous studies on retail criminal behavior have typically relied on surveying retailers or criminals themselves, our study used biometric data to definitively prove that shoplifting is not just premeditated, but also strategic.
The study results appear to validate NRF reports that indicate a trend toward aggressive ORC, defined as the professional theft of retail merchandise with the intent to resell that merchandise for financial gain. ORC remains a crippling force in the retail industry: the average cost of a single shoplifting incident is $559, often higher in industries such as electronics. Return fraud also remains a huge problem, as the Loss Prevention Research Council (LPRC) estimates that $9.6 billion of merchandise is returned fraudulently every year.
Effectively combatting rampant return fraud and ORC remains one of the top challenges for retailers. Understanding that the same criminals are striking retailers repeatedly will provide the impetus to invest in technologies that can effectively identify retail criminals before they strike.
Another key takeaway from this study is the importance of sharing data between individual locations across a retail chain. If a criminal shoplifts from a retail location, we’ve seen them repeatedly strike neighboring locations within the same day and in some cases the same hour. Through centralized data sharing, retailers can put other stores on high alert. Shoplifters are aggressive, deliberate and strategic. To stop this multibillion-dollar problem, retailers must be equally aggressive, deliberate and strategic with their loss prevention efforts.
Methodology
The six-month study leveraged data from Sentinel-IQ, FaceFirst’s face recognition system, which provides alerts when known or suspected retail criminals enter store locations. FaceFirst analyzed these match alerts in aggregate across 100 big-box, pharmacy and grocery retail customer locations to gain insight into recidivism and criminal behavior. The study focused on activity spanning Dec. 1, 2017 to May 31, 2018.
Peter Trepp is the CEO of FaceFirst, a leading facial recognition provider.
