Organized Retail Crime (ORC): How It Works, Consequences, and How to Combat It

What Is Organized Retail Crime (ORC)?

Organized retail crime (ORC), also referred to as organized retail theft (ORT) or professional shoplifting, involves two or more people who conspire to steal retail merchandise with the intention of reselling the items at a profit. Unlike shoplifting, which involves an individual stealing something for their own personal use, ORC is usually a large-scale operation backed by a criminal enterprise that may also engage in other types of theft, fraud, and money laundering.

ORC is one of the leading causes of retail shrinkage, or inventory loss. According to the 2022 National Retail Security Survey (NRSS), published by the National Retail Federation (NRF), shrinkage represented nearly $100 billion in losses for the retail industry in 2022. ORC is also a major cause of violence in retail environments, creating safety risks for retail workers and customers.

How Does Organized Retail Crime (ORC) Work?

Organized retail crime operations are typically divided into two parts: boosting and fencing. First, “boosters” steal goods, whether from retail stores or ecommerce sites. “Fences” or “fencing operations” are then responsible for purchasing or receiving the merchandise and reselling it to turn a profit. Historically, many of these goods have been fenced in flea markets and pawnshops; however, stolen merchandise is increasingly being resold in online marketplaces that facilitate the anonymous, large-scale, and fast-paced movement of goods.

Stolen goods are often distributed to a wide network of different fencing operations, often across state lines. The nature of these ORC operations makes the problem difficult to combat, as it requires coordination between various retailers and authorities across geographical areas to track patterns of theft and prevent further incidents.

Organized retail crime can involve a variety of different techniques. Retailers and news sources, for example, have reported cases in which smash-and-grab tactics and flash mobs are used to overwhelm security teams. ORC may also be linked to other types of theft further up the supply chain, such as cargo theft (stealing from cargo containers and trucks), or stealing directly from factories or manufacturers.

Other schemes employed by criminal groups involved in ORC include: 

• Gift card fraud: Gift cards are purchased with stolen credit cards and resold on secondary markets, or low-value gift cards are reprogrammed to a higher value and resold at a profit.
• Receipt fraud: Fake receipts are created for stolen goods so that thieves can make money by returning the merchandise to the retailer.
• Ticket switching: A fake or alternate barcode is swapped out for the original to register a lower cost for the item at checkout so that it can be resold at a higher price.

What Is Being Done to Combat Organized Retail Crime?

At a retailer level, many companies allot budgets and resources toward loss prevention, ranging from technological solutions that involve artificial intelligence (AI) to increased security teams or hardware in stores. Many retailers also have a dedicated ORC team, or a loss prevention and/or asset protection team, whose responsibility includes addressing and preventing ORC.

Often, organized retail crime cases are prosecuted at a local or state level under state criminal laws; however, the FBI works with law enforcement agencies to investigate across state lines. The National Retail Federation campaigns and partners with lawmakers at the local and state levels to raise awareness; as a result, at least 34 states have passed laws to combat ORC. Due to the complexity and nature of the crime, the National Retail Federation and other groups continue to push for federal legislation.

Progress has been made on the legislative front. The INFORM Consumers Act, which advocates for more transparency and verification in online marketplaces to combat the illegal resale of stolen or counterfeit goods, was signed into law in 2022 and takes effect in June 2023. The Combating Organized Retail Crime Act of 2022, presented to Congress in October 2022, proposes the establishment of an Organized Retail Crime Coordination Center, which would operate at a federal level to facilitate information sharing and coordination for more expedient investigation.

What Are the Consequences of Organized Retail Crime?

ORC has a major effect on retail business because it is one of the main contributors to retail shrinkage. In terms of financial impact, the 2022 National Retail Security Survey reports that shrinkage caused nearly $100 billion in losses for the retail industry that year.

Incidents related to ORC are often fraught with violence and aggression. Unfortunately, this seems to have become more prevalent over time, and many retailers and retail workers are increasingly concerned with employee and customer safety as a result of ORC cases.

As ORC is often facilitated by large criminal enterprises, it is often linked to other types of theft, such as cargo theft and identity theft, as well as criminal offenses such as money laundering, drug smuggling, and human trafficking.

ORC can impact consumers in a number of ways. It can drive up the prices of goods, pose a safety risk while people are shopping, and increase the risk of encountering counterfeit goods in online or secondhand marketplaces. In some cases, goods like baby formula and medical supplies are being stolen and resold with altered expiration dates, which can pose a huge health risk to consumers.

The Bottom Line

Organized retail crime (ORC) is when a group of people (usually a criminal enterprise) commits large-scale theft with the intention of reselling stolen merchandise.

It is a difficult problem to solve, given that shoplifters usually target numerous retailers, often in different geographical areas, and resell goods in online marketplaces, making it challenging to track and determine a pattern. As such, efforts to combat ORC must involve coordination between individual retailers and authorities at the local, state, and federal levels. Depending on the severity of the crime, penalties may include fines and imprisonment.