NC Newsline – If you’ve ever shopped at a big-box store like Walmart or Home Depot, chances are you’ve noticed merchandise locked away behind glass cases or tightly bound by a security tag. A few years ago, retailers used these tools to deter occasional shoplifting. Now it’s estimated that the average American family pays more than $500 annually in additional costs due to the impact of organized retail theft.
Scott McBride, the chief global asset protection officer for American Eagle Outfitters, told the U.S. Senate Judiciary Committee last week that organized retail crime (ORC) amounts to much more than simple shoplifting. It represents a sophisticated criminal enterprise perpetrating massive thefts and crossing jurisdictional lines to avoid prosecution.
“While ORC is not new, its veracity, sophistication, and frequency and geographic reach have dramatically increased in the post-COVID era,” McBride explained. “These groups use encrypted message apps to recruit thieves, coordinate the consolidation of stolen goods, liquidate them through illicit online tertiary and black market sites, and even exfiltrate stolen products out of the country.”
McBride said American Eagle Outfitters, which operates 23 stores across North Carolina, notes the problem has grown so large with repeatedly victimized retail stores, it has disrupted supply chains.
A recent case involving the federal agency Homeland Security Investigations as well as state and local law enforcement, successfully recovered to almost 2,000 pairs of American Eagle jeans along with other retailer merchandise totaling almost $2 million.
“The retail jeans were valued at $100,000. RFID research revealed that those stolen AEO jeans came from 35 stores in 13 states,” McBride testified.
That one case underscores the urgent need for national level involvement, McBride said, to support local and state government, district attorneys, and state’s attorneys general in prosecuting such cases.
Cargo theft on the rise with technology resulting in more creative schemes
Donna Lemm testified on behalf of the American Trucking Associations that the frequency and sophistication of cargo theft incidents have increased exponentially over the past several years.
A few years ago, cargo theft was barely on her company’s radar.
“In 2021, we had five cargo thefts reported. In 2024, we had 876 cargo thefts reported.”
Lemm explained how last year fraudsters sent work order information using a spoofed email address that appeared to be from a real customer.
“Our team fulfilled the instructions and completed three loads. We did not learn that the customer’s identity had been stolen until we attempted to send them an invoice. Ultimately, IMC Logistics was on the hook for the value of the lost cargo.”
In another incident, fraudsters outfitted a truck with fake placards and printed counterfeit IDs for the drivers. Lemm said IMC Logistics’ vehicles were equipped with GPS units, but the criminals were savvy enough to disable them within 20 minutes of leaving the lot.
“The trucking industry is doing everything right, but we are still vulnerable because Organized Theft Groups (OTGs) know that cargo theft schemes that cross state lines and span multiple law enforcement jurisdictions are unlikely to be investigated or prosecuted in a meaningful way,” said Lemm.
Theft takes a toll on the workforce
Summer Stephan, president of the National District Attorneys Association, said over the past two-year period (2023 and 2024), her office in San Diego County, California filed criminal cases involving organized retail theft against 218 defendants with a loss to stores of $2.6 million.
Stephan said the aggregation of theft amounts is critical because it distinguishes between somebody who maybe shoplifting to feed an addiction versus those who are habitual organized criminals.
“We used to have criminals coming in with the calculators to go right under $950, thus leaving them at a citation misdemeanor level,” explained Stephan. “That’s what caused all our products to become locked up.”
Stephan said she’s especially sympathetic to store employees who are anxious about being victimized by the rise in organized retail theft.
“I went to an Ulta Beauty store where there’s 20-year-olds aspiring to become makeup artists. The way those young clerks looked was very different than the past. They’re looking over their shoulder. They’re waiting for something bad to happen.”
Stephan was talking about employees in California, but the same could be true for workers in North Carolina. In May, four individuals were charged with stealing tens of thousands of dollars’ worth of merchandise at a Ulta Beauty Store in Holly Springs.
Authorities believe that case was part of larger east coast theft ring, with the merchandise easily resold at a lower price.
Stephan testified that an often-overlooked impact of retail crime is the loss of jobs in the retail industry.
“When organized crime becomes rampant within a community, store closures and reduced hours usually follow. Each store closure and reduction of hours directly translates to a loss of jobs or hours for all employees at that location,” she explained.
In 2022, the U.S. Chamber of Commerce reported that more than 650,000 jobs were lost nationwide due to organized retail crime.
Stephan along with Lemm and McBride voiced support for the Combatting Organized Retail Crime (CORCA) Act. The legislation sponsored by Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Sen. Catherine Cortez Masto (D-Nev.) would empower federal agencies to take a leading role in the coordination of enforcement activities while providing law enforcement agencies with the tools necessary to tackle the increasingly complex crimes targeting interstate and international supply chains.
Sen. Ted Budd (R-N.C.) is among a dozen bipartisan co-sponsors of the bill hoping to see its passage in the 119th Congress.
One note of caution
Sen. Dick Durbin (D-Illinois) said while he is not critical of the bill’s intent, he has reservations about the additional authority it would give to the Department of Homeland Security, which has been singularly focused (and in his opinion, overly focused) on deportations under the Trump administration.
“I don’t doubt for a second that what we’ve had described to us today is part of a much bigger network. But to say we’re worried about whether someone who’s cutting grass on a golf course today is undocumented, and we ought to put the resources of the federal government into putting them in a detention facility and deporting them. I don’t think that’s as high a priority as the subject of this hearing today,” said Durbin.
Senator John Cornyn (R-Texas) said Homeland Security has the capacity to do more with $170 billion in new funding recently allocated for Immigration and Customs Enforcement.
As losses mount, states forced to respond
While apparel and electronics top the list of the most stolen items, food and beverages along with infant formula make the list because they are easy to resell and hard to track.
Lemm, the logistics executive, said these cargo thieves are constantly adjusting their schemes to capitalize on consumer demand. During recent nationwide egg shortages, approximately 100,000 eggs were stolen from a semi-trailer in Pennsylvania. That loss alone was estimated at $40,000.
North Carolina lawmakers passed a law three years ago to increase penalties for organized retail theft based on the value of stolen merchandise. The legislation also included a provision to expedite the return of any recovered goods to the retailer or corporation. In the case of perishable items like eggs, the food cannot be resold.
Recent research by Capital One revealed that retailers in North Carolina lost $1.8 billion in revenue to theft in 2022. Return fraud cost North Carolina retailers another $2.4 billion.
Left unchecked, the report projects that shoplifting could cost the nation’s retailers over $53 billion in 2027.
