By Kotie Geldenhuys
The term "organised crime" is associated with crimes involving "big money": cash-in-transit robberies, smuggling of precious metals and stones, smuggling of wildlife and animal parts, drug trafficking, cross-border vehicle crime and money laundering, to name a few. In the process we overlook the potential role of organised crime in the retail environment. Organised crime in the retail environment is about much more than an armed robbery at a shopping mall when a group of heavily armed criminals target shops trading in goods such as jewellery, IT equipment, cellphones and exclusive clothing. It also involves the large-scale theft of everyday consumer items such as baby formula, cigarettes, razors, over-the-counter medication, health and beauty items, designer brand clothing, accessories as well as electronics.
Organised retail crime, often referred to as organised retail theft, typically refers to large-scale retail theft, shoplifting and fraud by organised groups of professional shoplifters, also known as “boosters”. Stolen and fraudulently obtained goods are not only taken from retailers, but also from manufacturers and distributors (Finklea, 2012). The US Lost Prevention Foundation (2018) states that organised retail crime involves the association of two or more persons engaged in illegally obtaining retail merchandise in substantial quantities through both theft and fraud as part of an unlawful commercial enterprise. The term organised retail crime is an umbrella term for a variety of retail crimes which include:
- Theft in the form of shoplifting. The Centre for Retail Research (2019) in the UK stresses that retailers increasingly find that part of customer theft (shoplifting) is caused by gangs (organised retail crime).
- Gift card fraud can take several forms. One example is where thieves purchase legitimate gift cards using stolen credit cards and then sell the gift cards to the highest bidder using an online auction website. Another example is where thieves purchase low-value gift cards, electronically reprogramme the cards to contain a higher value, and resell these reprogrammed cards (Finklea, 2012). The 15th Annual Organised Retail Crime Report of the US National Retail Federation (NRF) (2019) found that stolen goods are sometimes returned for store credit, typically for gift cards and that 51% of retailers have found those gift cards for sale online.
- Receipt fraud happens when thieves steal merchandise, create counterfeit receipts for the stolen goods, return the stolen goods to the retailers using the counterfeit receipts and collect money for their fraudulent returns (Finklea, 2012).
- Ticket switching refers to thieves who fraudulently obtain high-value items at a relatively low cost. Thieves use devices that create fake barcodes which they adhere to packages, covering the original barcodes. When the package is scanned, these new barcodes ring up the items at lower costs. The thieves can resell the goods at prices higher than what they paid, but lower than their retail values (Finklea, 2012).
- Cargo theft also forms part of organised retail crime since retail goods are vulnerable to criminals at various points throughout the supply chain. Both goods that are stolen from cargo trucks or from retail stores are fenced by criminals for a profit and both affect society’s economy, public health and domestic security. Thieves use various methods to obtain merchandise from cargo, which include the hijacking of trucks and stealing goods from cargo boxes and then resealing them so that the boxes appear as though they have not been tampered with (Finklea, 2012). According to the 2019 report of the US National Retail Federation, 73% of retailers have lost merchandise due to cargo theft, followed by 59% of theft that occurred en route to distribution centres (NRF, 2019).
For the purpose of this article we will look at shoplifting as a form of organised retail crime.