Retailers Join Forces To Track Theft Rings
Two of the shopping industry's largest trade groups are joining forces with the FBI to create a database that tracks retail crime gangs, which they say are becoming increasingly organized.
About 35 companies are participating in the database, including Limited Brands; American Eagle Outfitters; Mervyns and Bealls department stores; and Macy's, owned by Federated Department Stores. The Law Enforcement Retail Partnership Network, or LERPnet, is slated to launch Monday for retailers. Law enforcement will have access in a few months.
The Retail Industry Leaders Association and the National Retail Federation, which have each launched similar databases recently, teamed up to create the new online catalogue. About 14,000 incidents have been recorded in the NRF database alone.
Although theft has always existed in retail, technology has broadened criminals' reach and allowed them to become more sophisticated. The industry estimates it lost $37.5 billion to theft and fraud in 2005, a 20 percent jump over the previous year.
Gangs often steal items from several stores, then sell the goods for about 70 percent of the retail value at online auction sites in a practice known as "e-fencing."
"They go back to the home base and sell the product," said Tim O'Connor, vice president of asset protection for RILA. "It's normal to see them go up and down the East Coast with a U-Haul full of stuff."
In other cases, the gangs may even return items to stores with fraudulent receipts for the original value, plus tax. Among the most commonly stolen items are Crest Whitestrips, DeWalt tools, Duracell batteries and Gillette razor blades, said Joseph LaRocca, vice president of loss prevention for the NRF. He estimated that shoppers pay 1.5 percent of each dollar to make up for stolen products.
"Ultimately, consumers pay higher prices," he said. "It's like a hidden crime tax."
Stores say organized retail gangs have exploited the lack of communication between businesses. An NRF survey last year showed 81 percent of retailers said they had been affected by organized retail crime, and nearly half had seen an increase in such activity in stores.
The database allows retailers to enter the details of crimes at their stores for others to view. They can also search for incidents at other stores by type or geographic region and receive e-mail alerts when entries that fit their specifications are added. Law enforcement officials can also monitor the site for patterns or trends. The combined database is expected to eventually track hundreds of thousands of crimes at scores of retailers.
"This is a significant financial loss," LaRocca said. "Retailers are fighting back against these sorts of crimes."
The project represents a remarkable amount of cooperation in an industry that is fiercely competitive and secretive. Still, it remains to be seen how actively retailers will share information.
Membership costs $1,200 a year plus a one-time set-up fee for retailers; law enforcement access is free. The database allows retailers to list not only the type of crime and how it was committed, but also witnesses and the license plate numbers of vehicles involved. Retailers can even upload pictures and video.
But those are all voluntary options. Retailers, who tend to be circumspect when it comes to letting the competition in on information, can hide their company names from other users if they are leery of sharing sensitive data.
The partnership will "better help us to track and fend ourselves proactively so that these things don't happen," O'Connor said. "We can prosecute them better by combining forces."
LaRocca said two big-box chains in Southern California recently used the database to link burglaries at their stores. It also could help law enforcement officers connect crimes in different counties or states.
"We'll also use it in a proactive manner so that we can use it as predictive analysis and get ahead of the groups," said A.J. Turner, section chief for the gangs and criminal enterprise division at the FBI.
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About 35 companies are participating in the database, including Limited Brands; American Eagle Outfitters; Mervyns and Bealls department stores; and Macy's, owned by Federated Department Stores. The Law Enforcement Retail Partnership Network, or LERPnet, is slated to launch Monday for retailers. Law enforcement will have access in a few months.
The Retail Industry Leaders Association and the National Retail Federation, which have each launched similar databases recently, teamed up to create the new online catalogue. About 14,000 incidents have been recorded in the NRF database alone.
Although theft has always existed in retail, technology has broadened criminals' reach and allowed them to become more sophisticated. The industry estimates it lost $37.5 billion to theft and fraud in 2005, a 20 percent jump over the previous year.
Gangs often steal items from several stores, then sell the goods for about 70 percent of the retail value at online auction sites in a practice known as "e-fencing."
"They go back to the home base and sell the product," said Tim O'Connor, vice president of asset protection for RILA. "It's normal to see them go up and down the East Coast with a U-Haul full of stuff."
In other cases, the gangs may even return items to stores with fraudulent receipts for the original value, plus tax. Among the most commonly stolen items are Crest Whitestrips, DeWalt tools, Duracell batteries and Gillette razor blades, said Joseph LaRocca, vice president of loss prevention for the NRF. He estimated that shoppers pay 1.5 percent of each dollar to make up for stolen products.
"Ultimately, consumers pay higher prices," he said. "It's like a hidden crime tax."
Stores say organized retail gangs have exploited the lack of communication between businesses. An NRF survey last year showed 81 percent of retailers said they had been affected by organized retail crime, and nearly half had seen an increase in such activity in stores.
The database allows retailers to enter the details of crimes at their stores for others to view. They can also search for incidents at other stores by type or geographic region and receive e-mail alerts when entries that fit their specifications are added. Law enforcement officials can also monitor the site for patterns or trends. The combined database is expected to eventually track hundreds of thousands of crimes at scores of retailers.
"This is a significant financial loss," LaRocca said. "Retailers are fighting back against these sorts of crimes."
The project represents a remarkable amount of cooperation in an industry that is fiercely competitive and secretive. Still, it remains to be seen how actively retailers will share information.
Membership costs $1,200 a year plus a one-time set-up fee for retailers; law enforcement access is free. The database allows retailers to list not only the type of crime and how it was committed, but also witnesses and the license plate numbers of vehicles involved. Retailers can even upload pictures and video.
But those are all voluntary options. Retailers, who tend to be circumspect when it comes to letting the competition in on information, can hide their company names from other users if they are leery of sharing sensitive data.
The partnership will "better help us to track and fend ourselves proactively so that these things don't happen," O'Connor said. "We can prosecute them better by combining forces."
LaRocca said two big-box chains in Southern California recently used the database to link burglaries at their stores. It also could help law enforcement officers connect crimes in different counties or states.
"We'll also use it in a proactive manner so that we can use it as predictive analysis and get ahead of the groups," said A.J. Turner, section chief for the gangs and criminal enterprise division at the FBI.
business mortgage real estate revenue foreclosure investment invest stock exchange forex forex trading
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