July 14, 2022
District Attorney, San Diego County
Vice President, Federal Government Affairs, CVS
Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce
From brazen store robberies to e-commerce fraud rings, organized retail crime is a rising threat across the United States. According to the National Retail Federation, organized retail crime costs businesses $700,000 for every billion dollars in sales, with a majority of small businesses reporting an increase in shoplifting and organized theft in 2021.
To help solve this complex issue, leaders in the legal and retail spheres shared their insights at the U.S. Chamber’s event on the driving factors behind organized retail crime — and how the private and public sectors can work together to put a stop to it.
The Online Marketplace and Legal Loopholes Are Driving Spikes in Retail Crime
“[Crime] depends on money and profit… [and] the online marketplace that allows stolen goods to be sold has really increased [retail] thefts because of the profit margin,” explained Stephan. “There is no real [identification] requirement of any kind for online selling of stolen goods.”
Additionally, loopholes in “safe harbor” laws — those meant to protect people from prosecution in certain instances, including theft under a certain dollar value — have allowed repeat offenders to act with minimal consequence.
“Many states like ours don’t allow aggregation, so a person can go to different stores, and you can’t aggregate the amount to show that [the stolen goods are worth] more than $950,” Stephan said. “The intent [of the law] was absolutely taken advantage of.”
Businesses and Law Enforcement Can Work Together to Stop Retail Crime at the Source
Shannon Penberthy, Vice President of Federal Government Affairs at CVS, has seen the rise of retail theft firsthand.
“We estimate that organized retail crime occurs about every three minutes in one of our 10,000 locations across the country,” she said. “It has just grown in magnitude and [...] it’s become more brazen.”
CVS has taken steps to train its employees and partner with local law enforcement to help stop retail crime at the source. The company focuses less on “boosters,” or the individuals sent into stores to steal the goods, and more on the leaders who are paying the boosters.
“That’s where we work with law enforcement: bringing those bigger cases and building the pieces at the local level [to prosecute] those individuals that are higher up in the chain,” explained Penberthy. “If we can start to address that end of it, you’re going to see this activity diminish.”
Legislation and Continued Advocacy Offer Businesses a Path Forward
While businesses and law enforcement play a critical role in stopping retail theft, laws must also be established to close existing loopholes and increase accountability for criminals.
San Diego is already seeing progress in this domain, thanks to the collaboration of leaders in the legal, law enforcement, and business communities — as well as the necessary resources and legislation to support their efforts.
“We were able to bring together [multiple thefts] using our ORCA Alliance for a $700,000 theft,” said Stephan. “[We were] able to put a stop to that conspiracy [and] bring heavy accountability in that case under our organized retail theft statutes.”
The Chamber of Commerce has also endorsed the INFORM Consumers Act, currently pending in Congress. The bill would increase oversight in the online marketplace, requiring sellers with high-frequency and high-value transactions to disclose identification, contact, and banking information.
And while business owners may not be the ones directly passing the legislation, they can still make their voices heard.
“I really encourage you to be in touch with the Chamber and your retail associations that can give you information on how to get engaged,” Penberthy stressed. “Every voice helps.”