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Organized retail crime takes toll

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NEW YORK — Organized retail crime is not shoplifting but big business.

Organized retail crime is not shoplifting but big business.

"This is not a 16-year-old girl going into one of our stores after school and grabbing an eyeliner pencil, or a DVD a pair of jeans or a blouse," said Dennis Dansak, corporate manager of Kroger Co.’s organized retail crime division.

Dansak helped detail the scope of the problem (and what is being done about it) during a session at the National Retail Federation’s recent 100th Annual Convention and Expo. He described a typical case his team investigated, involving a “booster” caught stealing $127 worth of Similac formula.

Under questioning, the booster admitted that he stole about $600 worth of merchandise a day from various retailers, and that he “worked” four days a week. His organization had 26 other people like him, that he knew of, all operating on similar schedules, and they had all been doing so for at least a year. In all, the whole operation was stealing about $64,800 worth of merchandise a week, or nearly $3.4 million over the course of the year.

"And that’s not an unusual example," Dansak said. "If anything, it’s on the low end."

Another speaker in the session, Eliot Green, assistant vice president at TJX Cos.’ loss prevention department, noted that industry estimates put total losses to organized retail crime at somewhere between $15 billion and $30 billion a year, and almost double that if cargo theft is included. To put that figure into perspective, Green noted that FBI statistics indicate that all property crime in the United States — including auto theft, burglary, larceny and robbery — amounts to about $19.2 billion a year.

Unlike shoplifters, who are stealing merchandise for their own use, the people involved in organized retail crime are taking product to convert into cash.

"It’s a business," Green said.

Once the goods are stolen, criminals have a number of ways to turn it into cash. Some return it to stores, in some cases with forged receipts, for cash refunds. That approach is more lucrative than dealing with conventional fences, because when sales taxes are figured in the return is more than the retail price of the goods stolen. But Green noted that the risks can be high, so many gangs prefer to sell the merchandise at local markets or flea markets, or via such online venues as the one operated by eBay Inc. Both Green and Dansak noted that eBay has become an ally when it comes to stolen merchandise sold on its site. “They will work with us to make sure that people are arrested and prosecuted,” Dansak said.

(John Mearis, senior manager of eBay’s global asset protection team, detailed his company’s efforts during the session.)

Shipping stolen goods overseas is another option, and Dansak described a recent case in which six stolen cars were being sent out each month, two to a shipping container, with about $20,000 in boosted merchandise in each.

Green said legislators are beginning to address the issue. A number of states have passed legislation that targets organized retail crime, and the retail industry plans to renew its push for federal legislation. Dansak said law enforcement organizations have begun to take organized retail crime seriously, recognizing that its perpetrators are often involved in other illicit activities, including drugs and guns.


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