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Report: Retail Crime Increases During Recession

Ylan Mui

The recession is a boom time for bad guys, according to a new report released this morning.

The survey by the National Retail Federation, an industry trade group, found that retail crimes such as shoplifting and "fencing" (re-selling goods at pawn shops or on eBay) has risen during the economic downturn. About 92 percent of retailers surveyed say they have been targeted in the past year, up 8 percent from 2008. And 73 percent said the level of organized retail crime has increased, up 11 percent from a year ago.

“The unfortunate economic events of the past year have played an intricate role in how criminals continue to rip off the retail industry,” said Joe LaRocca, NRF's senior asset protection advisor.

I wrote about this trend during the holiday season, and it doesn't seem to have let up. Retailers and police distinguish between organized retail crime rings that defraud stores and steal massive amounts of merchandise from what they call "opportunistic" theft -- folks who may be struggling financially and shoplift out of need or simply convenience. Both appear to rise during economic downturns.

Whenever I hear this, I always think of Jean Valjean of Les Miserables, who is sentenced to years in a horrid French prison for stealing a loaf of bread for his starving family. Of course, according to a study by the University of Florida, retailers lose as much as $35 billion a year from retail crime.

But there is debate about the link between crime in general and the country's financial health. National statistics show that most types of crime declined last year, even though the economy went down the tubes. Still, a recent survey of police agencies across the country showed robberies, burglaries and thefts had gone up.

Meanwhile, a recent WSJ article investigates the academic data and differentiates between crimes such as theft (strong connection) and mass killings (nebulous connection).

What do you think? Is this trend believable or bogus?

UPDATE: EBay contacted me with a statement about their efforts to combat retail crime and brings up some good points that I wanted to share with you. Here are the comments by Tod Cohen, vice president and deputy general counsel for government relations,

“At eBay, we are proud of our efforts to work with retailers and law enforcement to tackle the problem of organized retail crime. We devote substantial resources to monitoring our marketplace and have zero tolerance for criminal activity. In fact, eBay is the least safe place for a criminal to sell stolen goods because we maintain extensive records of transactions and actively help law enforcement to investigate, arrest and prosecute criminals.

“eBay is proud that a growing number of retailers across the country are members of PROACT, our partnership program with retail loss prevention departments. We hope that more retailers will partner with us to confront this challenging issue. However, rather than work with us, some retailers unfairly blame the Internet as the cause of the problem.

“The truth is, faced with challenging economic times, some retail giants have made a number of decisions that they were aware would contribute to their theft losses, including cuts in loss prevention staff and tools, as well as major reductions in sales staff, who serve as a powerful deterrent to potential thieves. They also continue to have major problems in dealing with the number one cause of inventory shrinkage -- employee theft. Retailers that are truly serious about this problem must invest resources to attack the problem at its source.

“The National Retail Federation’s recent report on organized retail crime is filled with best guesses versus facts and hard numbers. It simply doesn’t make sense to blame online marketplaces for a problem that has existed since well before the Internet was invented.”

By Ylan Mui  |  June 10, 2009; 7:00 AM ET
Categories:  Consumer News , Ylan Q. Mui  
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Next: Travels Along Recession Road


As a forensic psychologist who specializes in criminal behavior, I read this morning's piece with great interest ("Do Recessions Breed Crime?"). The main determinant of criminal behavior is the personality and character of the individual, not the environment. Most poor people are not thieves but, as we read almost daily, many well to do individuals are. Financial crimes cited in the article are committed by people from all walks of life. There are men and women struggling desperately during this economic downturn who would not think of taking something that does not belong to them. The environment can create temptations and greater opportunity to steal, but it is the individual who makes the choice.
Stanton E. Samenow, Ph.D.
Author of "Inside the Criminal Mind"

Posted by: samenow | June 11, 2009 6:43 AM | Report abuse

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