General Information

Organized retail crime (ORC) generally refers to the theft of retail products from a retail establishment by an organized group of two or more people. A single person acting alone is not considered ORC.

ORC Statistics:

According to an FBI report, industry experts say that certain ORC crimes cost the U.S. about $30 billion a year [1].

ORC Methods:

Typically, ORC rings move from store to store and sometimes city to city. Operating in teams, they usually target high-value merchandise and use a variety of methods to take the items out of the store without detection.

When stealing items from stores, ORC thieves usually target high value items that they can easily hide and resell such as DVDs, CDs, medications, clothing, infant formula, books, electronics, batteries and personal hygiene products.  Some of these items can be sold online or at local swap meets. One of the dangers of purchasing stolen medications and infant formula is that they may have been stored incorrectly or have altered expiration dates, which could pose serious health hazards.

The person who steals the merchandise from the store is known in the loss prevention industry as a “mule”. They often work in teams, usually first conducting an evaluation of store security. When they steal an item, one of the thieves will sometimes create a distraction while their fellow thief steals the merchandise. Some mules go into stores with lists of items to steal as requested by their leader. Sometimes, after stealing the items, the mule will return the stolen merchandise to the store for a gift card.

Generally the mule sells the stolen merchandise or gift cards at a discount of their retail value to their “fence”, the person who is responsible for converting the items into cash. The fence will usually sell the stolen merchandise or gift cards through an online auction site, at a local flea market or to a pawnshop.

To take the merchandise from the store without detection, these professional thieves sometimes employ advanced techniques including booster bags, electronic article surveillance (EAS) jammers and magnetic detachers.

  • Booster bags are bags lined with foil to prevent detection of the merchandise EAS tags (special tags on merchandise that trigger an alarm if taken from the store) by the EAS detection equipment installed at store entrances/exits.
  • EAS jammers are electronic devices that interfere with the EAS detection equipment placed at store entrances/exits to prevent the equipment from detecting the EAS tags on unpaid-for merchandise.
  •  Magnetic detachers are used to detach and remove the EAS tags on the merchandise thus allowing the items to be taken from the store without detection.

To combat these ORC techniques, LP equipment manufacturers have introduced effective systems that effectively detect and alert retailers to the use booster bags, EAS jammers and magnetic detachers.

Some thieves are so brazen that they enter the store, put merchandise in their shopping cart and take it directly to the return counter for a gift card without ever leaving the store. Others take the merchandise from the store and then return it for gift cards, which can then be sold.

With 89% of retailers stating that they have experienced return fraud, this practice will cost an estimated $14.37 billion in 2011 [2]. Closed circuit television (CCTV) systems and other methods are used very effectively to identify and spot this technique and record a visual image of the person and their actions for use in prosecution.

Another scheme involves paying for merchandise with counterfeit currency and then returning the items, with the receipt, for legal cash. CCTV systems are also useful in tracking thieves employing this method.

Battling ORC:

Because of the ever-increasing rate of ORC, legislative action has been taken by many states to prevent and punish it more effectively. Pennsylvania, along with other states, has passed a law that makes any participation in ORC a felony [3]. Previously, only those physically stealing merchandise could be prosecuted.

LP equipment manufacturers are continuing to work with the retail industry to create effective and innovative ways to stand against ORC. With so many solutions emerging, StopORC.org provides a portal and information exchange to keep retailers up-to-date on the latest answers to this growing problem.

[1] http://www.fbi.gov/news/stories/2011/january/retail_010311

[2] http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1243

[3] http://www.securitydirector