Organized Retail Crime (ORC) is a major issue for retailers and a growing problem for the nation. ORC involves sophisticated crime rings, who will dispatch thieves to several stores a day to steal specific items and then take those items and sell them, often on the Internet.

Current legislation introduced by Congressman Brad Ellsworth (D-IN), Congressman Bobby Scott (D-VA), and Senator Richard Durbin (D-IL) focuses on this crime, specifically related to greater accountability among online Internet auction sites.  Walmart is a founding member of a broad coalition of retailers — including Target, Safeway and Home Depot — that is focused on tackling this problem.  The Coalition Against Retail Crime will bring attention to this growing challenge and will work with policy makers in crafting and passing legislation that will help prevent this criminal activity.

Please visit www.stopretailcrime.com and learn more about this important issue and the efforts in Congress to address the problem.

FAQ (from the Coalition Against Retail Crime)

What is the difference between Organized Retail Crime (ORC) and shoplifting?
Shoplifting is limited to items that are stolen for personal use or consumption-a pack of gum or a soda. ORC is a rapidly growing problem in which professional crime rings travel from area to area to steal large quantities of merchandise from several different stores. Often, the leader of the crime ring dispatches thieves to work in groups with one or more persons causing a distraction while the others quickly grab all that they can and run out of the store. The thieves then drive to another store and repeat the process several times throughout the day. Many times the thieves stock up on a particular item requested by the organized crime leader. They resell the merchandise, often through fence locations, flea markets, swap meets, pawn shops and, increasingly, on Internet auction sites.

What types of items are usually stolen by organized retail crime gangs?
ORC gangs consistently steal merchandise that can be easily hidden and sold, such as medications, razor blades, infant formula, apparel, camera film, batteries, DVDs, CDs and smoking cessation products. They also steal gift cards and high-end items like consumer electronics.

How big is the problem in terms of dollars?
We’re not talking about petty shoplifting for personal use. These are sophisticated criminal rings of thieves who operate full-time around to country. The very nature of the problem makes it difficult to arrive at an exact figure, but it certainly involves billions of dollars in stolen goods. It is also important to note that cities and towns lose the respective sales tax revenue that would occur if these products were sold in stores rather than fraudulently over the Internet. These lost revenues amount to millions of dollars.

Why are you confident that the problem is growing rapidly?
Members of our coalition have unfortunately seen a spike in recent years of store losses that can be directly attributed to ORC. There’s no question the convenience of online fencing has made this a more lucrative practice for criminals especially since the deterrence is minimal. Right now you can log onto Internet auction sites and find items being sold whose origins are suspicious at best.

How big of an issue is this on the Internet?
Estimates vary, but the Internet is a vast new marketplace. And just like any other marketplace, it should be policed. Effective laws should be in place to deter crime and protect consumers. In days past, pawn shops were part of the solution. The same should hold true today for Internet auction sites. Reputable online high-volume sellers are hurt when thieves engage in e-fencing, or selling stolen goods through Internet auction sites. Legitimate online sellers are harmed because e-fencing diminishes buyer confidence. Additionally, e-fencers, with their stolen merchandise, are unfairly competing directly with honest online sellers, undercutting their prices and further damaging the online marketplace.

Why does this demand a new federal law?
The rampant growth of Organized Retail Crime is outpacing the ability of state and local authorities to combat it. Consumers will benefit when a stronger deterrent is in place. Criminals increasingly sell stolen goods online and transport stolen merchandise across state lines to avoid tougher criminal penalties. State and local law enforcement cannot always chase criminals across state lines and onto the Internet-and criminals know it.

How do retail criminals sell the items they steal?
Retail criminals in the past have relied exclusively on fence locations, flea markets, swap meets or pawn shops to sell stolen goods. Now, retail criminals have embraced technology and are using online marketplaces as well to fence their goods.

Have retailers done their best to attack Organized Retail Crime?
We recognize that there will never been a perfect solution to combat theft in our stores and elsewhere in our supply chain. As we advance our practices, criminals will advance theirs. We are constantly evaluating all aspects of security from surveillance and product placement, to HR practices and employee training. The prevention of theft is something that we address throughout the life cycle of the products we sell, not just securing them once they are on our shelves. We work with suppliers to identify packaging and display techniques that reduce the likelihood of theft. Obviously, we devote resources towards securing our stores and distribution centers, but we also devote resources to consider how these products are resold knowing that reducing the opportunity of resale reduces the demand for stolen goods.

How much is lost in local and state tax dollars?
States and municipalities lose the respective sales tax revenue that would occur if these products were sold in stores rather than fraudulently over the Internet.

How has law enforcement addressed Organized Retail Crime?
Law enforcement has done a good job working to fight retail crime. They recognize the risk to the public of goods such as medications from being sold through an unsecure process. We work closely with law enforcement to combat the resale of these stolen goods. Part of our cooperation is also trying to give them more tools to combat this crime.

Why do current laws not address this crime? Why do we need federal legislation?
Today there is no effective federal, state or local deterrent for this rapidly growing criminal activity. At the state and local level, criminals who sell on the Internet can evade antiquated shoplifting laws that were written in an era of pawn shops and flea markets. In addition, state and local officials cannot always chase criminals across state lines and onto the Internet. No federal law specifically addresses Organized Retail Crime. In thirty-four states, the felony theft level (FTL) is over $500, and seventeen of those states have a FTL of $1000 or more. As a result, thieves can steal hundreds of dollars of merchandise from a single store and then move to a different store and in each case risk little more than a misdemeanor charge and small fine. In addition, no laws exist for the Internet like those that deal with pawn shops and flea markets.

Will this legislation simply push the burden of reducing ORC on to the online marketplace and effectively increase their liability to the benefit of retailers?
We are committed to making sure that any legislation carefully targets the problem and does not negatively impact the legal sale of products online.

Many people supplement their incomes by selling goods online that they either acquire or make. Why should Congress, at the request of huge retailers, make it more difficult for them to sell goods online?
This bill is carefully crafted to target Organized Retail Crime-that is, the large criminal enterprises that attempt to sell large quantities of stolen merchandise over the Internet. As the bill is drafted, those who buy and sell products legally in online marketplaces will not be affected.