As the average cost of organized retail crime grows, 52% of retailer respondents said their company is setting aside more tech resources to address risks, according to a December report from the National Retail Federation. Just over a third (36%) said they are increasing their loss prevention budget.
When asked whether their company has seen boosters returning stolen merchandise for store credit or gift cards and then selling the credit or gift cards on the secondary market, 59% of respondents said they had seen this occurring on websites, an uptick from 51% in 2019 and 50% in 2018.
NRF also found that organized retail crime costs retailers $719,548 per $1 billion in sales on average, an increase from $703,320 in 2019. In response, a third of respondents have changed their return policies, 29% have changed their point-of-sale policies and 20% have updated their trespass policies, per the report.
Organized retail crime isn't going anywhere, according to the NRF. 2020 marks the fifth year in a row it has cost retailers more than $700,000 per $1 billion in sales.
Per the report, more than six in 10 retail respondents think a federal organized retail crime law is necessary to address the issue. Retailers have been investing in resources to combat these crimes as organized criminals target stores, warehouses and cargo, but need additional assistance from law enforcement, said Mark Mathews, NRF's vice president for research development and industry analysis, in a statement.
The NRF's report echoes previous findings that retailers are increasingly fighting organized crime. In 2019, the NRF found that 97% of retailers experienced organized crime in the past year and that 51% of retailers had seen gift cards emerge online from the return of stolen goods. That same year, retail shrink reached $61.7 billion, an increase from $50.6 billion in 2018, according to the NRF.
As retailers set aside more resources for technology to fight retail crimes, cybersecurity also continues to be a headache for the industry. Among the most recent major retailers falling victim to cybercrimes was DSW, which lost access to its store inventories after a software vendor suffered a ransomware attack during the third quarter. Cybersecurity experts have long warned that third parties like vendors, consultants and suppliers pose cybersecurity risks for retailers.