Small Business Theft (The External Threat)

Even though retail theft has gone down over the past year, according to industry sources retail theft to businesses comes in the form of Organized Retail Crimes (ORC) at a tune of $15-30 billion annually.

According to the National Retail Federation Organized retail crime (ORC) refers to groups, gangs and sometimes individuals who are engaged in illegally obtaining retail merchandise through both theft and fraud in substantial quantities as part of a criminal enterprise. These crime rings generally consist of "boosters" - who methodically steal merchandise from retail stores - and fence operators who convert the product to cash or drugs as part of the criminal enterprise

The techniques used by criminals includes:

1. Ticket Switching:  This is switching the UPC bar codes on merchandise so they ring up differently at checkout.

2. Stolen or Cloned Credit Cards:  A buyer uses a stolen or cloned credit card to obtain the merchandise.

3. Fictitious Receipts:  A buyer uses a fictitious receipt to return products back to the retail store for cash.

4. Counterfeit Coupons:  The popularity of online coupons has spawned an explosion of counterfeit discounts that encourages retail theft.  Small discounts can add up to huge losses for small retailers with a slim profit margin.

5. Return of Stolen Merchandise:  This is where the individual steal merchandise then returns them to the retailer for a cash refund.

6. Return of used merchandise:  An item is obtained legally then used and return for a cash refund.

Not all state laws are uniform with respect to retail theft.  States define this crime differently.  In Pennsylvania for example, retail theft in the amount of less than $150 is considered a misdemeanor and a misdemeanor first degree if above $150 and it is the first or second offence.  It becomes when the offence is a third offence regardless of the value or the value is above $2000.  In Illinois it is a misdemeanor if the retail theft amount is $500 or less and a felony if it is above $500 and the perpetrator has a previous conviction.

Some clues to retail theft taking place in your business includes:

1.  Dramatic increase in the number of returns

2.  Increased number of markdowns due to high returns

      What should you do to combat retail theft:

1. Increase Staff:  Increase your staff during the holidays to handle the larger influx of customers and also to keep an eye on potential thieves.

2. Contact with customers:  Have employees make contact with customers.  This provides a visible presence that makes potential thieves think twice before they make their move.

3. Hire Security Guards:  This lets potential thieves know that they are being watched and that the store takes theft seriously.

4. Be alert at the register:  Cashiers should be on the lookout for the wrong pricing on items.  Get a price check if something seems suspicious.

5. Inspect:  Inspect containers to see if they are concealing other items.

6. Staple:  Staple bag closed with sales receipt attached.

7. Verify:  Verify all credit card holders.  Ask for another form of ID.

8. Returns:  Verify the receipt before completing the transaction and giving a refund.  Check for evidence of use for any items being returned.