Paul Jones Loss Prevention industry expert recommends that you review this article. Paul has 25+ years as a leader in Loss Prevention and has been on the forefront of the battle against Organized Retail Crime.
MSNBC.com
Buyer Beware: Retail Theft Costing You Money and Safety
By Kyle Reyes
NBCHartford.com
updated 10:27 a.m. ET, Wed., Dec. 24, 2008
The Godfather, a gang leader and a terrorist all walk into Target.
Sound like the beginning of a bad joke? It’s the new criminal enterprise costing businesses – and you, the consumer and taxpayer – billions of dollars a year.
Organized retail crime isn’t about random shoplifters. It’s about trained professionals who are stealing shocking amounts of products and reselling them at a profit.
The money they make is being pumped directly into the mafia, violent gangs and terrorist organizations.
You should be concerned. It can put your family’s health at risk when the products they steal end up back on the market.
Connecticut lawmakers should be concerned. There’s little legislation blocking the criminals from stealing more than $25,000,000 a year from the state in tax revenue.
For the bad guys – the risk is smaller than selling street drugs while the payoff is greater than robbing banks.
Low Risk, High Reward
“The laws are very gray around it, and they’re usually dealt with at the local level,” said Paul Jones, vice president of asset protection for the Retail Industry Leaders Association, a group working to crack down on Organized Retail Crimes.
Part of the reason it’s such a widespread and growing crime is that people look at what’s happening as just shoplifting, he said. That couldn’t be further from the truth. The culprits are making a living this way.
“These guys are pros,” he said. And it’s become its own industry.
There are two different groups – boosters and fences.
Boosters steal the merchandise for the fences, which will sell the products and pay the boosters.
Level one boosters typically stay local and are often drug-dependent.
Level two and level three boosters often travel state to state, hitting 20-25 stores a day.
They’ll make as much as $300-$500,000 a year.
Gary Weisbecker runs the Walgreens Organized Retail Crime Division and is helping crack down on it in Connecticut. Weisbecker worked for the NYPD for years, cracking down on organized crime.
He said the boosters sell the product to the fences.
“They clean up the product, make sure it looks like it’s a legitimate source, and it works it’s way back into the retail chain,” he said.
They’ll use lighter fluid or windshield fluid to remove retail stickers and even pay competent package counterfeiters to make the product look legit.
Some of the fences will sell the products at flea markets or online auction sites. Others sell to smaller stores and bodegas, and often back into larger retail stores by passing themselves off as wholesalers.
“We actually see these crime rings that would normally be sold at a shady location and now they’re opening their own businesses,” said Jones. “These products are being stolen and sold and few people know what’s going on.”
The fencing operations reward the best boosters with cash bonuses, and provide them insurance plans of sorts. The fence will bond them out if they get arrested before police can positively identify them.
Boosters tend to use fake names to help protect themselves.
Fences will often provide what they call “wake up” money to junkie boosters – helping them get their drug fix needed to function in the morning before they start shoplifting.
According to Jones, perhaps the biggest problem is the lack of understanding about how big the problem is.
“Because not a lot of people understand organized retail crime, when the booster get stopped, let’s say with $3-400 dollars in razor blades, they’d probably charge them with petty shoplifting.”
How They Do It
Weisbecker said the criminals use specially lined bags to sneak the product past the security gates. But their trickery goes far beyond that.
Boosters will be given shopping lists of what’s needed for the fences.
“They’ll be told I’m good on formula, but we need Prilosec to turn,” said Weisbecker. “They’ll steal $400 here, go to another Connecticut store, do another $400 there … They know what the felony theft level is, so they’ll stay just under it.”
In some cases, the criminals will bring accomplices to distract clerks or customers, or to help guard them so they can swipe the merchandise.
You can see some surveillance video of crimes at Targets across Connecticut by clicking here.
They target over-the-counter medications, baby formula, diabetic test strips, teeth whitening strips, batteries, razor blades, gift cards, video games, DVDs, CDs, and other products.
Jones said this type of theft has redefined the crime scene of years past.
“Fifteen or 20 years ago, the mob raised money through prostitution, loan sharking and gambling. Now they’re able to do it very low risk, he said. “This has grown today to be an epidemic.”
Weisbecker said the most frightening part is where the money’s going.
“These seemingly smaller thefts are adding up to really big crimes, and we’re tracking that money to some extremely dangerous people,” he said. “We’ve got to do something to stop it.”
The Costs
“In the old days, people would steal something in Trumbull and sell it in New Haven for pennies on the dollar,” said Jones. “But with the advent on the Internet and auction sites out they’re able to sell it for up to 75 percent of the ticket price (versus 25 percent). The risk reward ratio is now in favor of the criminal.”
According to RILA, an estimated $60 billion dollars in merchandise was stolen from Connecticut stores in 2006. That’s about $25 million in tax revenue.
Nationwide, it’s estimated to cost tens of billions of dollars in lost tax revenue.
Click here to view the complete report on the estimated amount of lost sales tax revenue.
Weisbecker said there’s also a health concern.
“You look at a lot of the stolen product. Baby formula, diabetic test strips, fast moving consumer goods,” he said. “You take that diabetic test strip that costs about $100. Now when that’s actually stolen, where’s it being stored? Think it’s being stored in a climate controlled condition? Ninety-nine out of 100 times it’s not. A storage shed, high temperatures. So when that eventually gets back into the retail chain, how safe is that product?”
Medicines and baby formula are also being stored improperly. In many cases, expiration dates are being changed to resell more easily.
The Legal Hurdles
Different jurisdictions don‘t talk and the lack of specific law make it hard to prosecute these crimes, Weisbecker said.
“Depending on what state, some states in the U.S. have enacted organized retail crime legislation. Other states do not have that. That’s why it’s a constant battle to get lawmakers aware that it’s just not shoplifting, it’s a criminal enterprise, it’s organized and we’re losing tax revenue,” said Weisbecker.
RILA has launched three federal bills to give law enforcement tools to make connections between the crimes. That way, he said, they can prosecute them as felonies — instead of misdemeanors.
Weisbecker said legislation like this can’t come soon enough. In the meantime, retail store divisions such as his try and do their part with local police.
“We educate law enforcement, even if you have to get a warrant, grab the GPS. Do a recent history. You’ll see all the stores that they’ve gotten to,” he said.
In the meantime, stores keep up store security and install additional cameras and keep many items behind lock and key.
Tom Fritch, store manager of the West Hartford Walgreens, said the first line of defense is a smile.
“I think probably the number one thing we do is try to supply great customer service. For two reasons. One, because we want our customers to come back and shop here. And two, because if you are a shoplifter, the last thing you want to be is noticed,” he said.
West Hartford is far from immune to ORC, he said.
“I’ve been in stores where it’s a bigger issue, but it’s an issue here because everybody’s got a car. It’s not the customers who live in West Hartford, it’s people who come in from other areas of the state, other areas of New England, who come in for no other purpose than to shoplift,” he said.
It helps knowing corporate has a retail crime theft division. Weisbecker said it’s his team’s job to make sure the bad guys stay out.
“We also have what’s called SRT teams. Shoplifting Response teams. They’re undercovers,” he said.
They pose as shoppers and apprehend boosters.
“We’ve got to stop this,” he said. “And we’re getting there. But we’ve got a lot of work to do. And we need all the support we can get.”
URL: http://www.msnbc.msn.com/id/28373257/
