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LPM DIGITAL
ORC Survey and Security Lawsuit
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2017 Survey Reveals Organized Retail Crime’s Top Items Stolen
By Jac Brittain, LPC
The 2017 Organized Retail Crime (ORC) Survey, an annual survey conducted by the National Retail Federation, continues to show the impact that organized crime is having on the business of retail. Each year the study explores the many ways that organized retail crime continues to grow and evolve based on input from retailers across the country, detailing new challenges and persistent issues that retailers face. It also explores resources and policy changes implemented to combat organized retail crime.
According to the 2017 study, organized retail crime is once again on the rise, and those involved in ORC incidents are showing an increased propensity toward violence. More than 25 percent of retailers reported that those involved in organized retail crime are exhibiting a greater tendency toward violent behavior.
Yet according to respondents, knowledge surrounding the issue and resources to help fight ORC remain minimal. Resources are down as other areas of the business are demanding greater attention by retail executives. With competing priorities in the retail business this year, only 20 percent of respondents believe that top management fully understands the complexity and impact of the ORC problem, and 62.3 percent of companies said they have no loss prevention employees that are focusing primarily on ORC issues.
All of this directly points to the need for increased awareness and educational opportunities related to the problem.
According to the 2017 study, shoplifting including organized retail crime is the top source of inventory shrinkage for the second straight year, outpacing employee theft, administrative errors, and other forms of shrink. ORC criminals look for items that can be stolen and quickly resold. As a result, there is a decided preference to steal products that include a mix of high-end luxury items and everyday commodities.
Kelsey Seidler
Kelsey Seidler is managing editor, digital. She manages the magazine’s digital channels that includes multiple daily e-newsletters featuring original content and breaking news as well as pushing content to various social media platforms. Seidler recently earned her master’s degree in technology and communications through the University of North Carolina’s School of Media and Journalism. She can be reached at KelseyS@LPportal.com.
Top Stolen Items
While each retail sector tends to see its own version of products based on the type of products sold, below is the list of top stolen items by category according to the 2017 survey: ■ Designer clothing ■ Denim pants ■ Razors ■ Infant formula ■ Designer handbags ■ Laundry detergent ■ Cigarettes ■ High-end liquor ■ Jewelry ■ Teeth whitening strips ■ Allergy medicine
Thirty-four states now have ORC laws in place; however, many retailers cite state legislation changes that are made to reduce prison populations, such as Proposition 47 in the state of California, that they believe have directly resulted in increased retail crime. Thieves that keep up with the laws know value limits in order to avoid felony charges if caught. This, among other issues, has led to 70 percent of responding retailers believing that federal organized retail crime legislation is needed.
Organized Retail Crime by Location
According to the 2017 survey, the top locations in the country currently experiencing incidents of organized retail crime include: 1. Los Angeles 2. New York City 3. Houston 4. Miami 5. Atlanta 6. Chicago 7. Orlando 8. San Francisco/Oakland 9. Orange County, California 10. Northern New Jersey
As the retail business evolves, so does the need for improved skill sets and improving internal talent at every level of the retail business. Loss prevention is certainly no exception. Ultimately, this will demand both greater focus and broader perspectives from those that serve the industry.
Expectations for the future loss prevention team may include more employees with loss prevention as part of their job description, while their overall role may include many additional responsibilities. By the same respect, it is the responsibility of every retail leader to remain keenly aware of those issues that have the greatest impact on the business.
Read the full report at nrf.com/resources/retail-library/2017-organized-retail-crime-survey.
A Security Lawsuit Is a Legal Landmine
By Garett Seivold
Nine seconds after three armed men entered a convenience store in Rochester, NY, one of them shot security guard Brian Brown in the face. “Thirty-six pellets went into my eye; the rest went into my head,” he told local WHAM 13 News. “They’re still in there.”
Naturally, a lawsuit against the store’s parent company followed. Can you guess the outcome of this security lawsuit based on facts and circumstances?
Verdict Search, an ALM Media company, described several salient issues the jury had to consider in this case. First, the jury heard plaintiff attorneys argue why the store should be held liable for inadequate security: ■ In the ten years before Brown was shot, six shootings and 126 robberies had occurred at the store and other area stores. ■ The store’s cash wasn’t regularly removed to a bank and accumulated in the store’s safe. ■ Store employees could open the safe, rather than using a drop safe that could only be opened by armed security personnel during cash pickups. ■ The parking lot was too dark.
Next, the jury heard the retail store’s argument for why it was not responsible for the security guard’s injuries: ■ The store had retail security procedures that were more stringent than those of other convenience stores in the area. ■ Cash pickups were arranged so that the store’s employees would not have to risk leaving the premises with large amounts of cash. ■ The store’s parking lot was well lighted.
Because it provided this level of security, the guard’s assailant was entirely liable for the shooting and Brown’s injuries, according to the store’s defense attorneys.
So what do you think? There was certainly some he-said/she-said in the case with respect to perspectives on the parking lot lighting. However, keeping too much cash on hand is a well-established contributor to store robberies. Does it sound like the store was found liable for the guard’s injuries? If so, what do you guess was the amount of the damage award?
The verdict: the jury said the facts of the case suggested that the store negligently failed to provide adequate security and that it should pay Brown roughly $1.2 million (Brian Brown v. Wilson Farms Inc., et al., Monroe NY Supreme Court, 2012).
A store robbery is a tragic event, but it typically involves relatively small monetary losses. The average loss in a convenience store robbery was $699 in 2014, for example. Some crime prevention analysts think it is possible that retailers can lose sight of their significance because of the small dollar amounts involved.
However, unlike other crimes that may have a greater impact on the bottom line, robbery puts employees in physical danger, which requires management to move it ahead of others on the risk scale.
In addition to the potential of a million-dollar judgment, there are other reasons robbery prevention makes fiscal sense. Medical payment, when crime is the cause of a worker’s injury, averages nearly $14,000. Only burns and motor vehicle accidents result in higher medical payouts, according to the National Council on Compensation Insurance. Including lost work time, legal expenses, and other costs, some industry estimates are that the average cost to employers of a single episode of workplace violence can cost between $25,000 and $250,000.
Curtailing available cash is critical in high-risk locations, according to legal experts. During evening and late-night hours of operation, cash levels should be kept to a minimal amount per cash register to conduct business. Transactions with large bills over $20
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