Retailers Turn to Technology to Combat Organized Retail Crime

Organized retail crime (ORC) is a plague that's spreading. It's infecting retailers, customers, stores, and online marketplaces. It has no cure, and retailers are forced to treat the symptoms with higher prices, increased security, and reduced hours.

ORC starts in stores, cargo bays and other physical locations. Professional thieves steal thousands of dollars’ worth of merchandise — everything from baby formula to designer handbags. In the good old days, thieves would sell their ill-gotten goods in-person through pawn shops or other locations. They had to show their face and create a paper trail in order to make a profit. Now, organized crime rings can anonymously fence items online. It's easier than ever to not only get rid of stolen merchandise but to make a profit on it without getting caught.

In the past year, 69 percent of retailers saw an increase in ORC incidents — costing an average of $720,000 for every $1 billion in sales. Obviously, retailers cannot continue to hemorrhage the loss of product, revenue and reputation. Also, customers will not continue to pay higher prices, deal with tighter return policies, and shop during reduced hours that are retailers’ attempted cures. So, what can be done? How can retailers fight this disease when there's no cure? How can they stop its spread when it has already migrated to an online space?

Traditional theft prevention relies on humans — human guards, human eyes, human accountability. But as shoplifting and ORC become increasingly violent, relying solely on people puts employees in harm’s way. It also opens retailers to the inherent risks of relying on humans, the biggest of which is people are not perfect. Maybe a theft happens when they're distracted by a customer or another employee. A guard cannot be everywhere at once. Or maybe they poorly engage a shoplifter who chooses to lash out, hurting those nearby. Guards and security personnel are human and are limited by that.

The answer is in technology — not in traditional closed-circuit television (CCTV) or acousto-magnetic tags, but in new cutting-edge systems that simply weren’t possible before now. While none of these are a complete cure, technology can help stop thieves without endangering employees or customers, track patterns and collect data, and deter criminals without restricting customers.

Stop Thieves Without Endangering Others

ORC gangs target large amounts of merchandise, so they typically aren’t shoving product in their pockets and walking out. Instead, they commit pushout theft by filling a cart and walking out the front door. Self-locking shopping carts, like those produced by Gatekeeper Systems, help prevent pushout theft by keeping the merchandise in-store. If thieves attempt to walk out of the store without going through checkout, the cart locks in place, and most thieves run for it or take only what they can carry. While keeping the merchandise is important, it's more important to prevent violent confrontations between thieves, employees and innocent bystanders. In fact, according to Gatekeeper, one in 10 pushout thefts involves violence, typically between a shoplifter and a loss prevention employee. The locking carts take stopping a thief out of the hands of loss prevention employees and provide confrontation-free stops.

Track Patterns and Data

Police departments across the country are struggling to find officers. In fact, there's a 45 percent increase in retirement rate, an 18 percent increase in resignation rate, and a 5 percent decrease in hiring rate among police forces across the country. This means they cannot respond to every theft in every retail store in their jurisdiction. They have to prioritize calls, and property crimes have to take a backseat to more life-threatening situations. Therefore, retail investigative teams collect evidence and compile it into a case so law enforcement can make an arrest and district attorneys can prosecute.

An important part to creating a case is collecting evidence, tracking patterns, and compiling data. Artificial intelligence can help track patterns, identify strategies, and more when thieves strike so retailers can take steps to prevent them in the future. Solutions like Everseen help retailers see what's going on at the register by flagging thieves who try to sneak products through self-checkout aisles. With cameras stationed above the registers, Everseen checks for scan accuracy — i.e., if the customer is scanning the correct product, the correct number of products, etc. The data collected at the register helps retailers build a case against the thieves on camera as well as tracking which products were stolen, how much was taken, and more. This helps prevent similar crimes in the future.

Deter Criminals

Every effort to slow down, delay or stop thieves has the potential to slow down, delay or stop customers. If a retailer has a stricter return policy, it will be harder for thieves to commit return fraud, but it will also be harder for honest customers to return the shirt that doesn’t fit or the computer that doesn't work. It's all about finding a balance — one that deters criminals, not customers.

One solution is mobile surveillance units stationed in the parking lot. These typically have cameras, lights and even speakers to make them easily noticeable. While thieves and customers both see the units, their responses are completely different. Criminals tend to go to easier targets while customers welcome the increase in safety. Our customers at LVT (LiveView Technologies) have seen up to a 70 percent reduction in parking lot incidents as well as a 66 percent reduction of shoplifting events after deploying their mobile surveillance units. An increased presence in the parking lot helps deter criminals before they ever enter the store and creates a safer shopping environment for honest customers.

While there's no complete cure for ORC, a holistic approach that uses multiple types of technology is the best way to prevent it. Instead of relying on physical force, retailers can use technology to identify bad actors without putting people at risk. It's the best way to prevent the ORC disease from bleeding retailers dry.

Matt Kelley is the head of retail, go to market, LVT (LiveView Technologies), an enterprise cloud software vendor providing a Platform-as-a-Service (PaaS) cloud solution for remote video and analytic data gathering, processing, and delivery.