Select leaders from the retail industry testified before the House Homeland Security Subcommittee on Counterterrorism, Law Enforcement, and Intelligence on rising organized retail crime across the U.S., with one witness declaring that the coordinated theft and fraud of retail items is “not a victimless crime.”
The congressional testimony on Tuesday comes amid the Christmas shopping season as large organizations of professional shoplifters take advantage of soft-on-crime policies to steal store goods and, in many cases, resell them on the black market to make a profit. Organized retail crime is defined as two or more individuals, as part of a criminal enterprise, illegally obtaining retail merchandise through theft or fraud.
“Retail theft is not a victimless crime. It impacts jobs, consumers, and communities in several ways,” said David Johnston, vice president of asset protection and retail operations at the National Retail Federation, according to the hearing’s publicly available written testimony. “Increased violence involving theft has caused injury to employees and consumers, the unfortunate death of some retail associates, and a fear of working or shopping in high-crime locations. This makes it difficult for retailers to retain or find labor to support consumers.”
In his opening statement, subcommittee chairman August Pfluger (R., Texas) said organized retail crime is different from shoplifting or petty theft, and that even transnational criminal organizations crossing the southern border into the U.S. are contributing to increasing retail theft in both urban and rural areas. Lenient crime legislation, including high felony-theft thresholds and weak bail-reform laws, are failing to deter criminals from engaging in such illegal activity after they are released, added Pfluger.
A combination of these open-border and soft-on-crime policies is causing big-box retailers to shut down business in certain locations. Target, for example, closed nine stores across four cities — New York City, Seattle, San Francisco, and Portland — this September. Others, such as a Washington, D.C.–based CVS, remain open but are locking merchandise behind plastic barriers and displaying framed photos of commonly stolen items to prevent systematic theft.
Mom-and-pop shops also fall victim to such perpetrators, Pfluger and others commented during the hearing.
As a result of rampant organized retail crime, stores are losing billions from inventory loss. In 2022, retail theft was responsible for about $72 billion in losses, according to the 2023 National Retail Security Survey conducted by the NRF. In total, retail shrinkage accounted for $112.1 billion in losses last year, up from $93.9 billion in 2021.
In addition to monetary loss, organized retail crime comes with heightened levels of violence. Sixty-seven percent of surveyed retailers said they’ve seen more violence and aggression from shoplifters compared with last year, contributing to the currently estimated 543,000 job openings in the industry.
In some cases, the violence has been fatal. As recently as last week, a security guard at a Macy’s store in Philadelphia, Pa., died after a shoplifter stabbed him and wounded a second security guard. The suspect, who has an extensive history of retail theft, robbery, and drug offenses across the Philadelphia region, was later arrested. More than 250 reports of retail theft were filed at that one Macy’s location this year, Pfluger noted.
As for the shopping experience, American consumers are not feeling safe either. A separate NRF poll released in June found that 53 percent of 5,000 U.S. consumers believe retail-related crimes have increased in their communities since the beginning of the Covid-19 pandemic in 2020. That statistic rises to 57 percent for those who live in suburban areas. Additionally, 64 percent of respondents expressed concerns about gang-led shoplifting where they live, and that number increases to 75 percent for consumers in urban communities.
“Soft-on-crime policies have made our communities less safe,” Pfluger said in a statement ahead of the hearing. “By putting criminals over communities, families, and small business owners, hardworking Americans across the country are being forced to pay the financial and emotional costs of these failed policies.”
“Organized retail crime endangers small businesses, workers, and consumers,” subcommittee ranking member Seth Magaziner (D., R.I.) added. “We must address this issue head-on to protect small businesses and keep communities safe in Rhode Island and across the country.”
The other witnesses, apart from Johnston, who testified in the retail-designated panel included Scott Glenn, vice president of asset protection at Home Depot; Abby Jagoda, vice president of public policy at the International Council of Shopping Centers; and Summer Stephan, district attorney of San Diego County, Calif., who testified on behalf of the National District Attorneys Association.
All four witnesses urged Congress to seriously consider passing the Combating Organized Retail Crime Act to further crack down on organized retail crime. The bipartisan legislation, if implemented, would create an inter-agency organized-retail-crime center within Homeland Security Investigations to coordinate with other federal law-enforcement agencies.
In the first half of the hearing, testimony was given by three federal officials: Michael Krol, special agent in charge of Homeland Security Investigations; Jason Kane, special agent in charge of the U.S. Secret Service; and Jose Perez, deputy assistant director of the FBI’s Criminal Investigative Division.