NEW YORK – Stores are worrying less about teens stealing CDs and more about sophisticated criminals such as Samih Fadl Jamal of Mesa, Ariz., the ringleader of a major organized theft operation that stole and resold millions of dollars of baby formula throughout the country.
Such highly sophisticated groups have been targeting retailers for several years, but merchants are just starting to come together to fight organized retail theft, developing crime databases and establishing crime squads.
Organized theft costs the industry an estimated $30 billion annually, and the amount is rising. Customers pay a hefty price, too. The National Retail Federation, the industry’s largest trade group, estimates that shoppers pay almost 2 cents on every dollar they spend to cover the cost of retail theft.
The increased focus on this issue was underscored in July, when news broke that Wal-Mart Stores Inc., the world’s largest retailer, will no longer prosecute one-time thieves unless they are between ages 18 and 65 and steal at least $25 worth of merchandise.
Wal-Mart, which had a zero-tolerance policy, joins a number of retailers who are putting more of their energy into stopping bigger shoplifting crimes.
But that doesn’t mean the nation’s retailers are giving a free pass to petty shoplifters. They emphasize that they are still going to catch such thieves.
“This is not an invitation to petty theft,” said Sharon Weber, a Wal-Mart spokeswoman. “We are hard targets for crime, and we intend to stay that way.”
In fact, Weber warned that the new policy is only a guideline for stores, and such thieves still will be detained and will be prosecuted if they refuse to show identification or are violent.
Unlike average shoplifters, who steal for themselves, those who are involved in organized crime steal the goods and resell them to flea markets or pawn shops or on the Internet. They typically focus on specific brands and products that carry a high resale value, are in constant demand and have a high profit margin. Among some of the coveted items are Enfamil baby formula, diabetic strips, brand-name drugs such as Tylenol and Advil, Gillette razors, and jeans, including brands such as Polo Ralph Lauren.
Both the NRF and the Retail Industry Leaders Association have launched password-protected national crime databases online, which let retailers share information about thefts to determine whether they’ve been a target of organized crime. In the past, merchants had never shared information, so rings could hit various stores in one area without being detected.
Meanwhile, retailers such as Gap Inc., Sears Holdings Corp. and Wal-Mart – all of which are participating in the databases -have their own organized crime squads. They’re also using more sophisticated cameras in their stores to detect suspicious activity. For security reasons, retailers would not give details about their efforts.
According to Joseph LaRocca, vice president of loss prevention for the NRF, a particular problem over the past year has been a dramatic increase in the reselling of stolen products on the Internet, an area that is harder to track than flea markets or pawn shops.
“You don’t realize that a longtime drug user that you would never do business with is behind Uncle Bob’s online store,” LaRocca said.
For a long time, it was hard to detect crime rings because stores were secretive about thefts.
Many stores declined to talk about what specific measures they are adopting, but said that only by joining together will they make a dent in the problem.
Still, they are realistic.
“This is an ongoing issue. It is not an issue that you are going to solve,” said Bill Titus, vice president of loss prevention at Sears. Stores, he said, have a lot of inventory, and criminals are trying to get at it.
“Our job is to get ahead of it and prevent it,” he said.
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