Early Christmas: Retail theft rising quickly for holiday season

Nov 14, 2006 3:50 PM

           

Before the holiday shopping season gets into full swing, crooks may already be hard at work, The San Jose Mercury News reports. The crooks typically don't wait until after Thanksgiving, when malls will be packed with customers and stores have more employees around.

"We see a lot of organized retail crime activity right now," says Joseph LaRocca, vice president for loss prevention for the National Retail Federation. "They're stocking up for the holidays."

Goods stolen by organized or professional thieves are sometimes sold cheaply at flea markets, on street corners or in impromptu home boutiques, say retail security experts. They can end up as fraudulent returns to stores. And in a high-tech age, they can be "e-fenced" at online auction sites.

Using stolen credit cards or counterfeit checks, thieves are also buying gift cards, which they often sell on online auction sites, LaRocca tells the newspaper.

Retailers lost $37.4 billion in 2005 due to shoplifting, refund fraud and other crimes, up 20 percent from 2003, estimates the National Retail Federation. Although $12.3 billion, or about one-third, was due to theft by outsiders, about 47 percent of the losses came from theft and fraud by employees, the NRF data shows.

Rings of professional thieves are responsible for growing merchandise losses, industry experts say. "Retail losses are a staggering problem in our industry. These guys are getting smarter and they are stealing more," LaRocca said.

As opposed to small-scale crooks working alone, professional organized criminals roam in groups of five to seven and hit multiple locations, stealing goods worth thousands of dollars each time. While some members of the ring do the stealing, others survey the area, using cell phones to alert their colleagues if security or store personnel get suspicious. While in a store, one group might distract salesclerks while others take off with merchandise.

Legitimate customers are paying for the thefts in higher prices, retailers say. About 1.6 cents of every $1 customers spend goes to cover theft-related expenses, according to the retail federation.

Thieves typically receive 30 percent of a stolen item's value at a flea market, pawn shop or street corner, law enforcement officials estimate. But items can go for about 70 percent of their value at online auction sites, where sellers have relative anonymity, LaRocca says.

But merchants are fighting back with technology. Some stores have installed "smart" video cameras that automatically flag an employee if someone is spotted where they are not supposed to be, or if the camera detects large amounts of store merchandise being moved, for example.

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