History of Organized Retail Theft
Thieves have stolen retailers’ merchandise for all of recorded history. But organized retail theft as we know it today became apparent just over fifteen years ago. Shoplifter rings were discovered and investigated in Detroit, Pittsburgh, and other Eastern U.S. cities in the mid-1980s. ORT proliferated in the 1990s and continues to grow today, but a new and potentially dangerous element has entered the ORT scene. There are strong indications that revenue from these criminal enterprises may be funneled to terrorist groups. Leaders of at least three large ORT rings that have been broken by long-term investigations were foreign nationals, some with U.S. citizenship, and many who are illegal immigrants.
Targeted Products
ORT rings typically target everyday household commodities and consumer items that can be easily sold through fencing operations, flea markets, swap meets and shady store-front operations. Items that are in high demand by these professional theft rings include over-the counter (OTC) products such as analgesics and cough and cold medications, razor blades, camera film, batteries, videos, DVDs, smoking cessation products and infant formula.
Consumer Health and Safety Risks
Consumers are at risk when ORT gangs steal consumable products, especially OTC items and infant formula. In many cases after the merchandise has been stolen, the products are not kept under ideal or required storage conditions, which can result in rapid ingredient deterioration and loss of potency. If the products are near the end of their expiration date, ORT middlemen will change the expiration date and lot numbers to falsely extend the shelflife of the product. In addition, cough and cold products are popular with ORT rings because these medications can be sold to clandestine labs for the purpose of manufacturing methamphetamine.
Economic Impact on Consumers
Retail theft often results in consumers having to pay higher prices for the products they purchase as retail establishments attempt to cover their losses. Higher prices adversely affect all consumers, especially the most needy in America, such as the elderly and families that depend upon food stamps and the WIC program to augment their limited budgets. Consumers are also being inconvenienced by this type of criminal activity. Because theft has become so rampant in certain product categories, such as infant formula, a number of major retail companies are taking the products off the shelves and placing them behind the counter 2 or under lock and key. In some cases, products are simply unavailable due to high pilferage rates.
Organized retail theft (ORT) is a growing problem affecting a wide-range of retail establishments, including supermarkets, chain drug stores, independent pharmacies, mass merchandisers, convenience stores, and discount operations. It has become the most pressing security problem confronting retailers. ORT crime is separate and distinct from petty shoplifting in that it involves professional theft rings that move quickly from community to community and across state lines to steal large amounts of merchandise that is then repackaged and sold back into the marketplace. Petty shoplifting, as defined, is limited to items stolen for personal use or consumption.
Organized retail theft is theft from retail stores by professional shoplifters. Such theft is labeled organized theft because it is carried out, for the most part, by professional shoplifters who work for criminal organizations that operate under a set of well-planned procedures and rules. The merchandise stolen by ORT rings is purchased by fences who sell the products to repackers, illegitimate wholesalers, and flea market vendors.
Professional Shoplifter/Booster/Sweeper
A person who shoplifts for money, perhaps as his/her sole source of income, is a professional shoplifter sometimes called a booster or a sweeper.
Sweeper
A professional shoplifter is often referred to as a sweeper. The term describes the method the shoplifter uses when he/she clears an entire shelf of a targeted product, e.g., sweeps clean.
Street Fence
A street fence buys directly from professional shoplifters paying them either in cash or drugs. A street fence is often the owner of a retail or discount store, or the operator of a flea market stand. The street fence usually buys stolen goods from 15 to 30 boosters. The fence trains the boosters, informs them as to the products to steal, and tells them what stores to hit. The street fence also acts as an enforcer, when needed.
Upper-Level Fence
The upper-level fence operates at a “higher level” than a street fence. The upper-level fence generally does not buy directly from boosters. He/she will deal in thefts of full loads of stolen cargo, illegally diverted goods, and goods acquired through credit card scams, “bust out” deals or heists and hijacks. The market for the upper-level fence is usually a repack operation or illegitimate wholesaler.
Repackaging Operation
A repackaging operation usually operates as a wholesale distributor. Repackagers will buy stolen goods from upper level fences and directly from professional cargo thieves. Repackers sort, clean, shrink wrap and repack stolen merchandise to make the goods appear like they were purchased from a manufacturer. Repackers usually have counterfeit manufacturer shipping cartons and have the ability to produce counterfeit UPC codes. Repackers usually sell to illegitimate wholesalers.
Illegitimate Wholesaler
The illegitimate wholesalers are often referred to as product “diverters.” They sell to retailers at prices below the manufacturer’s list price. These companies operate in the“grey market” and secondary wholesale markets to move stolen products back into the legitimate retail market. They will mix legitimate products with stolen products and even produce counterfeit products to make tracking the illegitimate products very difficult.
rofessional shoplifters steal huge amounts of products that are relatively expensive and can be easily sold to dishonest wholesalers, retailers and flea market operators. The thieves are often drug addicts or ex-convicts who know that the penalties for shoplifting are not serious. In fact, most shoplifters do not spend any time in jail and pay only small fines, if they pay a fine at all. The availability of targeted products, the relatively high income possible through shoplifting for a fence, low expectation of prosecution, and small risk of doing jail time, provide all the incentives professional shoplifters need. The fences and corrupt dealers in stolen merchandise know where to find and recruit their boosters. A single organized retail theft ring may operate in a number of states. The corrupt wholesaler or dealer that pays for shoplifted merchandise often buys full trailer loads of stolen merchandise. Full loads of merchandise may be stolen from truck stops, truck terminals, or hijacked hundreds of miles distant from the dishonest wholesaler’s place of business. As with the crime of shoplifting, there is small risk of apprehension for professional cargo thieves. The FBI has greatly reduced the number of Special Agents assigned to investigating cargo thefts. The National Cargo Security Council estimates cargo theft losses to exceed $10 billion per year and growing.
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