The National Retail Federation (NRF) has revised its highly anticipated report on organized retail crime, uncovering a web of errors and misinformation that has sent shockwaves through the industry. The original report, released in April, claimed that nearly half of the industry’s shrinkage was attributed to organized retail crime, but a recent analysis by Retail Dive has exposed the flaws in the data.
The NRF’s report, conducted in partnership with financial crimes risk management firm K2, erroneously cited U.S. Senate testimony from Ben Dugan, the former president of the Coalition of Law Enforcement and Retail (CLEAR), as the basis for their claim. Dugan had stated that organized retail crime accounted for $45 billion in annual losses, but the NRF mistakenly linked this figure to their own security survey results.
David Johnston, the NRF’s vice president of asset protection and retail operations, admitted that they had missed the inaccurate inference and couldn’t confirm the source of CLEAR’s $45 billion estimate. The revised report has now removed any mention of organized retail crime’s impact in dollars and has distanced itself from CLEAR.
The true extent of the problem remains unclear, as retailers continue to grapple with rising theft and its impact on their profits. High-profile incidents such as smash-and-grab retail thefts and flash mob robberies have captured national media attention, prompting retailers like Dick’s Sporting Goods and Ulta Beauty to highlight the growing issue. Target even went as far as closing several stores due to the threat posed by organized retail crime.
However, a recent shoplifting report by the nonpartisan Council on Criminal Justice paints a different picture. The report, based on police data from 24 major U.S. cities, reveals that shoplifting incidents have increased by 16% compared to pre-pandemic levels. Interestingly, excluding New York City, reported incidents actually decreased by 7% during the same period.
Ernesto Lopez, a representative from the Council on Criminal Justice, emphasized the need for more comprehensive data to fully understand the shoplifting problem. The report highlights the lack of information regarding retailers’ reporting practices to the police and the impact of anti-theft measures on theft levels.
While the NRF stands by the fact that organized retail crime is a serious problem affecting retailers nationwide, they acknowledge the challenges in gathering accurate data to measure theft incidents. The revised report serves as a wake-up call for the industry, urging retailers and law enforcement to collaborate and develop a more reliable system for tracking and combating organized retail crime.