The threat of organized retail crime—where individuals systematically steal products such as designer clothes, expensive electronics, and high-end liquor from brick-and-mortar stores, as well as their warehouses and shipments—is a menace to retailers and can even be a danger to consumers. To address this problem, California enacted a law in 2018 that established greater penalties for engaging in organized retail crime and a task force dedicated to identifying and apprehending organized retail crime rings. In recognition of its effectiveness, the state recently extended the sunset date of this law until the end of 2025. But organized retail crime affects the entire country, and other states should adopt similar legislative responses as California.
Organized retail crime has escalated in recent years with retailers losing an estimated $45 billion per year from retail crime rings. The ability to resell stolen goods through online marketplaces has contributed to this escalation by making it easier to anonymously profit from theft online. For example, Home Depot has almost doubled its investigations into organized retail crime rings in the last five years, with the large majority focused on the rings’ e-commerce operations and online sales. In response to this escalation, several retailers, from Target to Walgreens, have been forced to close stores and reduce operations to recoup financial losses from organized retail crime.
To be clear, instigators of organized retail crime are not shoplifting teenagers or low-level offenders, but rather bad actors whose coordinated actions hurt more than just the retail industry. Federal officials have traced the profits made by some organized retail crime rings to terrorist organizations, human trafficking, and similar atrocities. Furthermore, their actions pose a substantial risk to the consumers who unknowingly purchase their stolen products. Before introducing a stolen good to its market, instigators of organized retail crime often repackage, relabel, or otherwise alter goods, leaving consumers unaware of the constitution of their new product. As a result, consumers can be exposed to allergens, rotten food, and ineffective products.
Many retailers have invested in technology to protect their merchandise. Home Depot has tried to discourage theft by using Bluetooth activation technology to lock its power tools before purchase so that stolen power tools do not work. Others, like Walmart, use GPS technology to track goods in transit so they can work with law enforcement to locate missing merchandise and identify unusual travel patterns during transit that may signify goods have been stolen and diverted.
However, retailers can only do so much, and they still rely on law enforcement to arrest and prosecute participants of organized retail crime. This current approach is not effective, and many instigators of organized retail crime take advantage of a lack of law enforcement response to blatantly flaunt their operations. For example, in Keizer, Oregon, a viral video showed two men successfully walk out of a Lowe’s hardware store with thousands of dollars of stolen electrical wires. Law enforcement officials later admitted that a lack of serious ramifications for organized retail crime rings essentially guarantees their continued efforts.
Indeed, disparities between retailers’ claims of organized retail crime and reported crime statistics demonstrate the absence of law enforcement in efforts to combat organized retail crime. Reports from the Federal Bureau of Investigations (FBI) show that larceny, which includes organized retail crime, is at its lowest level in a decade. This data backs statements from law enforcement officials in San Francisco, one of the oft-cited hubs of organized retail crime, that property crimes have fallen. However, these reports don’t match the experiences of retailers, who allege that organized retail crime is increasing at an alarming rate and have implemented considerable business decisions designed to combat its growth. The differences between reported crime statistics and retailers’ experiences show that, for whatever reason, organized retail crime is currently not prioritized or accounted for by law enforcement.
Law enforcement should play a role in preventing, deterring, and responding to organized retail crime. In most states, retail crime is a low-risk, high-reward activity, and their approaches to fighting organized retail crime fail to both hold the crime rings accountable and prevent repeat offenses, which only emboldens instigators of organized retail crime. This lax enforcement needs to change, and California offers a model for how states can fight organized retail crime.
California recently passed AB 331 which extends measures previously enacted to thwart organized retail crime until January 1, 2026. Specifically, the law makes it a felony, rather than a misdemeanor, for individuals to work in concert to steal merchandise or purchase, sell, receive, or return goods known to be illegally procured. The law also renews the mandate of the California Highway Patrol (CHP) Organized Retail Crime Task Force. The law will help the state address organized retail crime in four impactful ways.
First, the law allows prosecutors to pursue greater charges against individuals involved in organized retail crime. The law specifies that individuals must work in concert throughout their operations in order to face charges for organized retail crime. This clarification keeps people accused of minor offenses like small-dollar shoplifting from facing the harsher penalties of those involved in organized retail crime rings. Furthermore, creating a separate charge for organized retail crime gives policymakers and law enforcement officials a clearer picture of the extent of this criminal activity, thereby allowing them to respond more effectively.
Second, the CHP task force facilitates more collaboration between law enforcement officials, government agencies, and district attorneys, and this collaboration will enhance investigations by enabling the involved parties to share resources and information on suspected cases and identify linkages between organized retail thefts. Pooling information and resources will help law enforcement and government officials effectively apprehend organized retail crime rings.
Third, the CHP has launched a web-based portal for consumers and retailers alike to report suspected retail crime rings to local law enforcement agencies. Due to the high-volume nature of the crime, instigators of organized retail crime frequently strike multiple targets over the course of their operations. Collecting crowdsourced, contemporaneous data on suspected offenses will help law enforcement monitor and respond to criminal activity faster.
In the past three years, the CHP Organized Retail Crime Task Force has recovered over $16.3 million dollars in stolen merchandise and arrested 252 individuals involved in organized retail crime.
No state can solve this problem on its own. Organized retail crime rings often travel across state lines in their pursuit of stolen goods and thus fall under several jurisdictions. States will also need to cooperate, ideally with the support of federal law enforcement agencies, to fight interstate organized retail crime. In pursuit of this goal, Congress should enact legislation criminalizing organized retail crime and better empower organized retail theft task forces within the Federal Bureau of Investigations (FBI) to fight this problem.
California’s approach offers an effective model for other states to pursue, and policymakers in other states should move quickly to protect consumers and retailers with similar legislation and initiatives.
Image credit: Flickr user jjkbach