Combating Organized Retail Crime Will Require More Than Targeting High-value Shoplifting
Organized retail crime (ORC)—when groups or large networks work together to steal large quantities of merchandise—has become a significant problem in the United States. U.S. retailers had $68.9 billion worth of goods stolen in 2019, with organized retail crime a significant contributor to these losses. To address this problem, the Combating Organized Retail Crime Act would make it easier for federal prosecutors to charge someone with engaging in organized retail crime based on the total value of the goods they have stolen. However, this change fails to capture the differences between ORC and shoplifting and creates a system that penalizes high-value shoplifting as harshly as ORC. Congress should amend the bill to underscore the differences between shoplifting and ORC while empowering law enforcement to find and target stolen goods on online resale platforms.
ORC stands apart from amateur theft due to three key characteristics. First, while casual shoplifters or thieves steal items for personal use, ORC focuses on stealing goods with the explicit purpose of reselling them for profit. Second, ORC differs from amateur theft because it involves a structured division of labor and specialization among those involved, managing tasks such as inventory control, marketing, sales, payment processing, and money laundering to handle the complexity of their operations. Last, ORC activities typically involve meticulous planning, deliberate targeting, and extensive coordination among participants. Amateur shoplifters engage in spontaneous, opportunistic crimes with little or no preplanning.
ORC groups largely target general consumer goods, including apparel, cosmetics, housewares, cleaning and laundry products, and infant products. These products are typically stolen during “smash-and-grab” attacks, during which large groups of perpetrators attack a store directly and steal large quantities of products. The average value of stolen merchandise typically ranges between $2,000 and $3,000, while luxury and high-value goods can result in losses of more than $7,500. While electronics are the most frequently targeted items for groups stealing and targeting products while in transit, luxury and high-value goods represent a very small portion of ORC.
ORC fencing operations use the Internet to resell stolen goods. However, ORC operations that resell online are shifting fencing operations away from third-party online marketplaces—like Amazon Marketplace and eBay—where the online platform plays a bigger role as an intermediary between buyers and sellers and toward peer-to-peer venues—like Facebook and Craigslist—where the platform is much less involved. Analysis of nearly 9,000 listings across Facebook Marketplace and Craigslist found that around 25 percent of listings for commonly stolen goods contain keywords or phrases associated with ORC, such as “available in bulk” and “new with tags,” that indicate that a new product is being resold.
This shift is happening because major third-party marketplaces have implemented policies to collect and verify basic identification from sellers, including banking information, which increases the risk for criminals to use these platforms. Peer-to-peer venues, which often operate as online classified advertisements and do not process financial transactions, have fewer barriers to entry and rarely attempt to collect or verify seller information. The large number of legitimate sellers on these marketplaces also provides additional anonymity.
A bipartisan group of members in both chambers of Congress have introduced the Combating Organized Retail Crime Act of 2023. The bill’s stated purpose is to combat organized crime involving the illegal acquisition of retail goods for the purpose of “selling those illegally obtained goods through physical and online retail marketplaces.” The legislation would establish an Organized Retail Crime Coordination Center to align counter-ORC activities nationally and internationally. The Coordination Center would develop national-level ORC intelligence, facilitate information sharing and cross-agency investigations, and serve as a center of expertise for training and technical assistance. The Coordination Center could play a valuable role because addressing ORC requires cooperation from retailers, law enforcement agencies, and online platforms.
While the bill represents a strong first step, it uses a definition of ORC that could misdirect limited law enforcement resources away from ORC organizations and towards traditional shoplifters. The bill uses $5,000 of stolen goods in 12 months as a benchmark to prosecute shoplifting as ORC. This could result in shoplifting of high-priced goods or frequent shoplifting being prosecuted as organized crime. However, most individual incidents of ORC do not reach this threshold, meaning that even if law enforcement catches perpetrators in the act, they may be unable to prosecute the theft as ORC.
To better target ORC, Congress should amend the bill, directing the ORC Coordination Center to work alongside leaders in the retail industry, logistics and shipping industries, and law enforcement agencies to find a more productive benchmark that directly relates to organized crime, such as coordination between perpetrators, total number of perpetrators involved in a single incident, or theft with the intent to resell.
The bill also fails to account for the presence of stolen goods on online peer-to-peer marketplaces where consumers sell directly to each other. Research indicates that most goods stolen from ORC end up on these marketplaces. Congress should amend the language of the bill to include peer-to-peer marketplaces alongside e-commerce and physical markets as a location where stolen goods are sold and should direct the Coordination Center to study the state of organized retail crime and stolen goods on online peer-to-peer marketplaces.
Organized retail crime continues to be a problem throughout the United States and has a large impact on consumers, retailers, and employees. It is imperative to address the problem, but Congress should ensure that steps taken to address the problem adequately address the issue at hand.
