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Retail Crime Rise: A Persistent Menace Threatening Communities

Retail-specific crime, an escalating issue that has cast a shadow over the retail industry, is stirring concerns among retailers and officials alike. The National Retail Federation (NRF) CEO, Matt Shay, is sounding the alarm on the relentless rise of this threat, emphasizing its deepening impact on businesses and communities.

Shay’s remarks on the situation highlight its gravity, as he stated, “This is a huge and growing problem, a persistent threat that’s gotten much worse in the last several years.” He referred to the act as nothing short of theft, shedding light on the escalating awareness surrounding this issue.

Data from the NRF exposes a startling revelation: retail shrink in 2021 reached 1.4%, translating to a financial loss of $94.5 billion for retailers due to factors beyond sales. This marked an increase from $90.8 billion in 2020, underlining the intensified nature of the problem.

The 2023 Retail Security Survey is yet to be unveiled, but its predecessor, the 2022 report, disclosed a disturbing trend. The report indicated an average 26.5% increase in organized retail crime in 2021. Additionally, the survey illuminated an alarming statistic: 8 out of 10 retailers reported a surge in violence linked to retail theft.

Shay’s prediction for the current year is even more staggering: “We’ve documented organized retail crime this year is going to be more than $100 billion.” The CEO acknowledged that this figure could be an underestimation, highlighting the extensive nature of theft.

The contributing factors to this surge are complex, as Shay underscored, citing the shift in classification of crimes, resource constraints of police forces, and a range of other challenges. This multifaceted problem is categorized into three core areas: the retail environment, the types of crimes committed, and the value of stolen goods.

The CEO’s perspective on the environmental aspect of retail crime resonates with former Home Depot CEO Bob Nardelli, who emphasized the need to regain control over what he termed a “lawless society.”

The NRF has taken proactive measures, advocating for legislation like the Inform Act, which enhances transparency and accountability by targeting the sale of counterfeit stolen goods. This move gained traction through the Integrity, Notification, and Fairness in Online Retail Marketplaces (INFORM) for Consumers Act, enacted in June. Online marketplaces are now mandated to disclose information from third-party sellers with significant transactions.

Additionally, the Combating Organized Retail Crime Act is another effort backed by the NRF, aiming to establish a multi-agency federal response to tackle retail shrinkage and promote collaboration between various levels of government.

A pertinent state-level issue discussed by Shay is California’s Proposition 47. This measure, enacted in 2014, reclassified certain theft and drug possession crimes from felonies to misdemeanors. This has led to criticism, with Shay exemplifying its flaws, “So you could walk into a Macy’s, a Nordstrom, a Saks, and take $900 worth of goods in the same day.”

As retailers and officials continue to combat the persistent problem of retail crime, it’s evident that its ripple effects extend beyond financial losses. The sense of insecurity, disrupted communities, and, tragically, instances of violence, amplify the urgency to address this menace. As Shay aptly summarizes, “It’s a persistent, pervasive problem, and we’re working hard to try to solve it.”

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