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Organized Retail Crime and Insiders

Organized Retail Crime and Insiders

What is Organized Retail Crime?

Organized retail crime (ORC) involves the alliance of two or more individuals illegally acquiring merchandise through means such as theft and/or fraud. Individuals involved in ORC are a part of an unlawful commercial enterprise, making this different from theft and/or fraud for personal use. The main goal is to obtain goods that are easy to sell for financial gain. Criminals participating in ORC tend to focus on goods that are in high demand, valuable products, or products that are easy to conceal. ORC is typically well-planned, and, in some cases, involves an employee insider.

According to National Retail Federation (NRF), ORC is a growing factor of nearly $100 billion worth of retail shrinkage. Retail shrinkage is loss of inventory that should be on the shelves. This loss of inventory can cost businesses thousands or even millions of dollars and it can be a result of external or internal theft. According to NRF 81.2 percent of participating retailers have reported an increase of 35.9 percent of violence in ORC within the past year.

Two Main Types of Organized Retail Crime

The first type involves a group of individuals who target businesses, but they are external threats to the companies. None of these individuals have worked for the company or business they have targeted. Although most of the time it is a well-planned attack and these criminals have done their research on the business, it is more spontaneous and opportunistic than when they have an insider. External ORC offenders tend to target multiple retailers or in some cases hit the same spot repeatedly. Retailers and media outlets have reported cases where flash mobs are used in order to overwhelm retailers, increasing their chances of getting more products. Not only is ORC affecting the businesses, but it also affects employees and customers. With retailers reporting an increase in violence, employees are increasingly concerned about their safety. Customers’ safety is another concern as well as the price of goods increasing, due to the shrinkage of goods.

The second type, and the most threatening type, involves individuals who work for the targeted business. They are known as insider threats. Insider threat is a perceived or real threat to an organization that comes from the organization’s employees, former employees, contractors, or business associates, who have inside information or privileged access and deep understanding of the organization’s operation. They commit harmful or hostile acts such as: violence, espionage, sabotage, theft, and cyber acts. With insider knowledge it is easier for ORC groups to plan attacks on retailers. ORC groups who have insider knowledge can not only target the company’s primary location but, in some cases, target the business throughout its supply chain.

Loss Prevention

There are several actions retailers can take to reduce the threat of organized retail crimes. External ORC is harder to deter than internal ORC. To reduce external threats, it is important for retailers to collaborate with other retailers as well as law enforcement. In many cases, hiring an off-duty police officer to be on site is an effective deterrent, although local laws may limit this option. With external threats companies need to be prepared and become more reactive while internal threats are dealt with by being proactive.

The number one way to reduce insider threats is by companies conducting thorough due diligence in the pre-hiring and pre-employment screenings. Companies should not just stop there; insider threat detection and internal investigations also help with keeping employees honest and reliable. Traditionally, thorough pre-employment screening costs a great sum of money as well as time to implement, but with Verensics automated interviews it can save companies money and reduce insider threats.

Verensics has a multitude of different online interviews for companies to better protect themselves from any losses or misconduct within the workplace. Working with Verensics, the interview process can be condensed in time by interviewing unlimited individuals all at the same time, instead of conducting one-on-one individual interviews. Verensics online interviews analyze cognitive behaviors and psychological behaviors shown throughout the interview. These online interviews not only take less time and resources but also can detect more deception and obtain more information from interviewees.

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