Apparel retailers are constantly struggling with clothing security issues due to theft. We all are aware that shoplifters are getting their hands on merchandise and creating shortage. This also entails the problems associated with theft such as reduced merchandise available to sell. What may not be as clear to retailers, especially small storeowners is the impact of Organized Retail Crime (ORC) activity on their store. According to the National Retail Federation 2017 Organized Retail Crime Survey, two of the top categories for theft for these groups is designer clothing and denim jeans (pg. 8). The report also indicates that 94.6% of retailers surveyed believe their stores have been the victims of ORC activity (pg. 5). So what are ORC groups and why are the items they are taking hot commodities. Organized Retail Crime organizations are theft rings that work together to shoplift. They are distinct from the regular or casual shoplifter because they plan their activities and have specific merchandise they target. The merchandise they set their sights on are normally able to be resold quickly either in a brick and mortar “Mom and Pop” shop or via online stores. Merchandise may also be returnable so that giftcards or cash may be obtained for the items that were taken. Aside from outstanding customer service the best method for preventing such theft is with the use of electronic article surveillance (EAS) tags on merchandise.
Combating retail crime is no easy task. Large, national chain stores devote money to Loss Prevention teams and anti-theft devices. They also spend a lot of money on closed circuit television, cameras and recording equipment. The small retail owner may not be able to afford all of this equipment. What they can afford is to purchase an electronic article surveillance system (EAS) for the store. With EAS towers at the front entrance and clothing security tags attached to softlines goods, products are well protected. If a mule working for an Organized Retail Crime group tries to waltz out with designer jeans stuffed in a backpack or purse and the jeans have EAS tags on them they will set off the tower alarms. If the mule decides to try to forcibly remove the tags they merchandise will be damaged, there’s no getting around it. Damaged goods don’t sell and the organization makes no money.
ORC groups also do not seek out attention. Being identified means a group will have a more difficult time stealing from the same retailer and that is an impediment to their business. EAS system alarms ensures a store is receiving an exceptional level of clothing security even if that store can’t afford other security measures. I would be remiss if I failed to point out that according the survey retailers are reporting an uptick in ORC gang aggression and violence (pg. 10). This is not to say employees should not respond to EAS alarms when they do occur. What is important is that employees are trained to de-escalate situations and approach situations in a non-aggressive, non-accusatory manner. Kill ‘em with kindness is a motto that served my teams well when I was a Loss Prevention Supervisor.
Another problem that has arisen due to ORC theft is an increase in return fraud. This has caused many retailers rethink their return policies. On page 11 of the 2017 Organized Retail Crime Survey 36.8 % of retailers reported making changes to their point-of-sale return policies. Many stores have already done away with cash for non-receipted returns issuing merchant gift cards instead. Unfortunately, even gift cards are now being sold to pawn shops. Some alternatives are a requirement to exchange for exact merchandise only taking away the incentive to try to get a lower cost item and cash in the transaction. Other retailers are putting a stop to potential criminal activity by requiring a government issued ID to be scanned for non-receipted returns and refunds over a certain dollar amount. These retailers then cut off all non-receipted returns after a set number of transactions, usually somewhere from three to five at the most. Attempted returns of garments with clothing security tags still attached are also rejected, especially when the attempt is without a receipt.
Organized Retail Crime is a growing problem and it isn’t only a concern for big name retailers. Loss Prevention Systems Inc. CEO Bill Bregar wants smaller retailers to know that they aren’t alone in the fight against these groups. You may not have the resources of the big box stores but you can get help from Loss Prevention Systems Inc. from advice on EAS tags to training on how to stop shoplifting in your stores. Stop ORC before it gets a foot in your door.
For more information about EAS tags contact us or call 1.866.914.2567