Retail's Most Wanted

The big picture: Organized retail crime has evolved into a sophisticated criminal enterprise that threatens not just retailers but entire communities. This year-end episode reveals the top 10 insights from 2024 that show how the problem - and solutions - are more complex than many realize.

Why it matters: These lessons demonstrate that ORC isn't just about shoplifting - it's connected to broader issues like community safety, drug trafficking, and homelessness. The response requires coordination between retailers, law enforcement, and policymakers at all levels.

Key takeaways:

• Small businesses are particularly vulnerable, losing up to 15% of merchandise
• Criminal organizations operate like businesses, with sophisticated warehousing and distribution
• Federal response is ramping up through new legislation and dedicated resources

What's next: The FBI's focus on dismantling entire criminal organizations, rather than just individual cases, suggests a longer-term strategy to combat ORC is taking shape. Meanwhile, states like Georgia and California are implementing new approaches to address both symptoms and root causes.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

On this episode of Retail's Most Wanted, John Matas, president of Blacklight Consulting and former head of investigations at Macy's, shares his expertise on the evolving landscape of organized retail crime (ORC).

Key takeaways:

• Retailers face a "perfect storm" of challenges, including state-by-state decriminalization and rising theft thresholds
• Digital fraud has become just as damaging as physical theft, with sophisticated criminals exploiting omnichannel retail vulnerabilities
• ORC has evolved from small-group operations in the 1980s to sophisticated networks employing technical experts and complex fraud schemes
• The retail industry, representing 25% of GDP and workforce, needs stronger law enforcement and policy support to combat rising losses

Why it matters:

ORC losses have grown from an estimated $25 billion to potentially $100 billion annually in the US alone. Without significant policy changes and increased enforcement, experts predict the problem will continue to worsen.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

The big picture

The FBI views organized retail crime as part of broader organized crime efforts, and focuses on dismantling entire criminal organizations.

By the numbers

• $112 billion in retail shrink reported in 2022
• 37% of that ($41.4 billion) is from outside theft
• 58% of outside theft ($24 billion) is cargo theft

Key challenges

Key challenges include international criminal groups engaging in "crime tourism", cyber-enabled fraud in cargo theft, and criminals exploiting jurisdictional boundaries.

FBI strategies

FBI strategies involve building partnerships with local law enforcement and retailers, focusing on the most egregious offenders, and leveraging international law enforcement relationships.

Success story

A recent case in Dallas led to 101 indictments, significantly reducing cell phone store robberies in the area.

Bottom line

While organized retail crime remains a significant challenge, the FBI's thorough approach aims for long-lasting impact through comprehensive investigations and dismantling of criminal networks.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

One big thing

Ransomware remains the top cybersecurity threat for retailers, despite the hype around AI.

Why it matters

Cybersecurity attacks have real-world impacts on consumers, from hospital diversions to school closures, yet many struggle to prioritize protection.

Go deeper

• CSOs across sectors face similar challenges, with threat actors constantly evolving tactics
• Quantifying cybersecurity risks is difficult, especially for small and medium-sized businesses
• Gift card scams highlight the overlap between cyber and physical retail crime
• AI is being cautiously explored to help prioritize threats and detect malicious files

The bottom line

While AI generates buzz, cybersecurity experts are taking a measured approach, focusing on proven threats like ransomware while exploring AI's potential benefits.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

Frank Patercity, Kroger's director of corporate security investigations, shares insights on the evolving landscape of organized retail crime (ORC).

Why it matters: ORC is not just about property theft - it's linked to serious crimes like human trafficking and weapons offenses.

Big picture: Retailers are joining forces with law enforcement and pushing for legislation to combat ORC effectively.

Key takeaways:

1. Gift card fraud is a growing trend in ORC, recognized by retailers and Homeland Security.
2. Partnerships with law enforcement and other retailers are crucial in fighting ORC.
3. Legislative efforts like the INFORM Act and Combating Organized Retail Crime Act are vital for long-term solutions.
4. ORC investigations often uncover larger criminal networks and more serious offenses.

The bottom line: Retailers must focus on people, not just property, to effectively combat ORC and its far-reaching impacts on communities.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

Suzie Squier, President of the Retail & Hospitality Information Sharing and Analysis Center (RH-ISAC), discusses the evolution of cybersecurity threats in retail and the importance of collaborative defense.

Why it matters:

As cyber threats evolve, retailers need to stay ahead. RH-ISAC facilitates crucial information sharing among its 270 member companies to combat emerging risks.

By the numbers:

• 10 years: RH-ISAC has been operating since 2014
• 270: Number of member companies in RH-ISAC
• 2: Size of the smallest cybersecurity teams in member companies

The big picture:

Cybersecurity threats have evolved from point-of-sale skimming to sophisticated ransomware and AI-enabled attacks. RH-ISAC helps members stay ahead through:

• Automated alerts on potential vulnerabilities
• Routine threat briefings
• Closed-door sessions to address specific threats

What they're saying:

What's next:

RH-ISAC aims to grow internationally while maintaining its community feel. Key focus areas include:

• AI and its security implications
• Cloud security
• Mergers, acquisitions, and divestitures in cybersecurity

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

Why it matters

Organized retail crime (ORC) has evolved beyond simple shoplifting into a sophisticated network of criminal activities that threatens the entire retail supply chain.

The big picture

Jonathan Gold, VP of supply chain and customs policy at the National Retail Federation, highlights the complexity and scale of ORC:

• ORC now encompasses cargo theft, gift card fraud, and other illegal activities to obtain goods for profit.
• Criminal networks have developed their own sophisticated supply chains for stealing and distributing goods.
• The impact extends beyond retailers to employees, consumers, communities, and the national economy.

By the numbers

A recent Verisk study shows a 46% increase in cargo theft in Q1 2024, with many incidents going unreported.

What they're saying

"Cargo at rest is cargo at risk," says Gold, emphasizing vulnerabilities in transportation and storage.

What's next

Gold advocates for:

• Increased federal understanding of ORC's complexity
• Harsher penalties for organized groups rather than individual perpetrators
• More support for state and local law enforcement to prosecute criminal enterprises
• Improved reporting and partnerships between retailers, transportation providers, and law enforcement

The bottom line

ORC is a complex, evolving threat that requires coordinated efforts from retailers, law enforcement, and policymakers to combat effectively.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

In this episode of Retail's Most Wanted, Arizona Attorney General Kris Mayes sheds light on the growing issue of organized retail crime and her team's efforts to combat it. With a background in law and public service, Attorney General Mayes brings valuable experience to addressing the complex challenges of retail theft and consumer protection in Arizona.

The Organized Retail Theft Task Force

Mayes discusses the Organized Retail Theft Task Force operating out of her office, emphasizing its importance in tackling a problem that extends beyond state borders. The task force collaborates with law enforcement agencies, community members, and businesses both within Arizona and across other states. This multi-state approach is crucial, as organized retail crime often involves operations that span multiple jurisdictions.

Recent successes: Gift card cloning and baby formula theft

Two significant cases highlighted by Mayes demonstrate task force effectiveness. A sophisticated gift card cloning scheme was uncovered where criminals stole gift cards from stores, cloned them, and returned the cloned cards to shelves. When unsuspecting customers purchased and activated these cards, the funds were immediately drained. A baby formula theft ring was also dismantled during a time of nationwide shortages after being caught stealing baby formula from various retailers in Arizona and reselling it in other states.

The broader impact of ORC

Attorney General Mayes emphasizes that organized retail crime affects more than just businesses. It impacts the entire economy, drives up prices for consumers, and poses safety risks to retail workers who may encounter these criminals. The collaborative efforts of law enforcement agencies across states are crucial in addressing this widespread issue.

By raising awareness and fostering collaboration between law enforcement, businesses, and the public, Attorney General Mayes and her office are taking significant steps to combat organized retail crime and protect Arizona's consumers and businesses.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

In the ongoing battle against organized retail crime (ORC), retailers and policymakers are continuously exploring innovative ways to curb criminal activity and protect businesses. One such initiative is the INFORM Act, a significant piece of legislation aimed at making it harder for criminals to profit from stolen goods through online marketplaces. In this episode of Retail's Most Wanted, legal expert Paul Singer discusses the role of the INFORM Act and how it is shaping the fight against ORC.

What is the INFORM Act?

At its core, the INFORM Act is a transparency law targeting high-volume sellers on online platforms. Its primary focus is ensuring that platforms collect and verify key information—such as contact details and bank account information—from sellers who meet certain thresholds. These thresholds include having over 200 transactions totaling $5,000 or more within a year. The law applies to major online marketplaces where the sale is transacted directly through the platform, such as eBay and Amazon.

Challenges and gaps in the INFORM Act

However, as with many laws, criminals have found ways to adapt. Some have shifted to smaller, high-margin items that are easier to move and harder to track. Others have tried to evade the law by setting up multiple accounts that don’t reach the reporting thresholds, or by taking transactions offline entirely.

Additionally, the law doesn’t directly target the criminals perpetrating the thefts—it places the burden on online marketplaces to collect information and identify problematic sellers. As Singer points out, this has caused some frustration among law enforcement, as the act doesn’t necessarily result in catching the criminals, but rather provides more data to help track them.

The role of state attorneys general and future improvements

State attorneys general play a crucial role in enforcing the INFORM Act alongside the Federal Trade Commission. Many states have implemented their own versions of the law, with some even expanding the provisions to close loopholes. For example, Georgia recently passed amendments to address the offline transaction loophole.

Looking ahead, Singer believes that further legislative measures could strengthen the act’s impact. States like California are considering amendments to require online marketplaces to take a more proactive role in identifying and reporting suspicious sellers, which could enhance enforcement efforts.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance. 

On the latest episode of Retail's Most Wanted, Mike Shore of Axon discusses the intersection of technology and security in combating organized retail crime. For security leaders and retailers looking to stay ahead of the curve, the message is clear: embrace technology, foster collaboration, and commit to creating safer, more transparent environments.

Why it matters

Originally known for its development of tasers, Axon soon recognized the need for body-worn cameras to increase transparency and accountability in public safety. As Shore put it, "People behave better on camera—on both sides." This pivot led to the creation of evidence.com, a cloud-based system that manages and stores digital evidence for law enforcement—a revolutionary tool that is now a staple in police departments around the globe.

Axon’s success in public safety prompted them to explore how their technology could address challenges in the private sector with a focus on sectors like retail, healthcare, logistics, and critical infrastructure—industries increasingly impacted by violence and organized crime.

Go Deeper

Shore and his team at Axon have ambitious goals. One of the company’s moonshots is to reduce deaths between public safety personnel and the public by 50% over the next ten years. This goal is not just limited to law enforcement interactions, but also extends to violent incidents in workplaces like retail and healthcare settings. The company is committed to providing technology that not only helps prevent crime but also enables retailers and law enforcement to work together more effectively when incidents do occur.

Retail's Most Wanted is presented by LVT and the Attorney General Alliance.