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U.S. retail faces serious organised crime

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American retail now faces the serious problem of organized crime losing annually between $15 billion to $30 billion with the thieves targeting consumer goods that are in high demand and easy to steal, ranging from razor blades to consumer electronics.

The fact that a congressional hearing is being held on the issue of Organized Retail Crime (ORC) shows the serious proportions that it has assumed, said the National Retail Federation (NRF) in the USA adding that this problem which has been on the increase has cost retailers and consumers as much as $30 billion a year.

“This hearing shows that Congress recognizes the seriousness of organized retail crime and is ready to do something about it,” said NRF Vice President for Loss Prevention Joseph LaRocca.

“Lawmakers are hearing firsthand from merchants the magnitude of these crimes and how they are driving up costs for consumers and posing a health and safety risk for the public. We hope that discussion will be followed soon by the introduction and passage of legislation to put those who commit organized retail crime behind bars,” he said.

The hearing came as Congress is preparing for introduction of new federal legislation to crack down on organized retail crime.

The stolen goods are resold at pawn shops, flea markets, swap meets and Internet auction sites. Organized retail crime ultimately drives up prices for consumers, and can pose a health and safety threat when thieves falsely extend expiration dates or repackage and re-label items such as infant formula or medications.

The crimes also cost states $1.6 billion annually in lost sales tax revenue, according to estimates by the Coalition Against Organized Retail Crime.

As the problem rocks the bottomline, more leaders in the retail industry are facing a growing problem – and the problem is spreading to most parts of Europe, the Americas, Africa and Asia.

To the grocery industry, the estimates are $15 billion of store level losses, making ORC among the most serious issues facing retailers today. According to FMI’s Supermarket Security and Loss Prevention 2007, 59.6 percent of retailers saw an increase in ORC over 2006.

Food retailers rated ORC the third highest loss factor impacting their bottom line, following employee theft and shoplifting.

Despite the seriousness of organized retail crime, the thefts are often treated as routine shoplifting because most states lack statutes that recognize the serious nature of the sophisticated criminal enterprises involved.

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