Representatives from more than 30 retailers joined a major industry lobbying group on Capitol Hill on Thursday, as they ramped up pressure to pass a law that backers say will curb retail theft.
The National Retail Federation escalated its campaign to rally support for the bill, known as the Combating Organized Retail Crime Act, which would make it easier to prosecute theft as a federal felony and set up a system for governments to share resources on crime. The retail lobby group dubbed its event “Fight Retail Crime Day.”
Before holding individual meetings with retail officials, the bill’s co-sponsors joined NRF CEO Matthew Shay in a press conference outside the Capitol — where they framed the legislation as critical to retailers’ bottom lines and their employees’ safety.
“You also have to recognize, this is not just the theft, but the danger to the employees, the cost to the consumers, and then the impact upon the individual retailer,” one of the bill’s co-sponsors Sen. Chuck Grassley, R-Iowa, said at a press conference. “[Organized retail crime] has to be dealt with in a comprehensive way. And that’s what our legislation is all about.”
Sen. Chuck Grassley, speaking at a press conference for the lobby group’s “Fight Retail Crime Day.”
Courtney Reagan | CNBC
Organized retail crime is different from shoplifting. The NRF defines it as “the large-scale theft of retail merchandise with the intent to resell the items for financial gain.” It usually involves multiple people who steal large amounts of goods from a range of stores, which a so-called fencing operation then sells, according to the group.
The NRF and individual retailers have spoken more than ever in recent months about how retail crime affects their profits, their employees and their customers. Target even cited the trend as it announced it would close nine stores.
Despite those comments, a survey released by the NRF last month found retailers’ losses from theft are largely in line with historical trends, but most respondents reported violence associated with the acts is getting worse. Much of companies’ lost inventory can also come from internal theft or management issues, as William Blair analysts wrote in a research note Thursday.
Even so, the industry has pushed for federal and state laws that aim to crack down on crime. Retailers continued their campaign for policy changes in Washington on Thursday.
The Combating Organized Retail Crime Act was reintroduced earlier this year. It seeks to create a new multi-agency group under the Department of Homeland Security that would pool information and intelligence from many states and local law enforcement sources. Officials want to better detect, track and prosecute members of organized crime rings with new federal standards.
American Eagle Outfitters chief global asset protection officer Scott McBride, who is meeting with lawmakers to rally support for the law, pointed to the collaboration as a major benefit of the proposal.
“That’s one of the main purposes that allows us to have a charter within a federal agency to actually help us create a clearinghouse to aggregate properly to investigate more efficiently and more in depth,” he said.
While retailers say organized retail crime could lead to higher prices for shoppers and store closures, many of the co-sponsors are focused on what retailers have said is escalating violence associated with the theft.
The NRF’s national retail security survey showed two-thirds of retail respondents reported seeing increased levels of violence and aggression from ORC offenders in 2022 compared with 2021. In the 2021 survey, 81% of respondents reported more violence than in the year prior.
McBride noted that some areas of the country have had a harder time hiring and retaining store employees because of the increase in violence. Most retail store employees are instructed not to intervene when theft is taking place because of the risk of violence.
Rep. Dina Titus, D-Nev., told about a recent incident she witnessed in a Walgreens.
“The person came up with a backpack and just started scraping eyelashes into the backpack and walked out,” she said at the press conference. “I said to the sales lady, ‘Did you see what that guy just did?’ She said, ‘Yeah, he comes in here two or three times a week and we can’t do anything about it because management is afraid somebody might get hurt.'”
The industry has also focused on the amount of stolen goods needed to prosecute as a felony depending on the location. Trade groups have said many crime rings know the law, and steal just enough to stay below it in each incident.
National Retail Federation CEO Matthew Shay speaking at a press conference for the lobby group’s “Fight Retail Crime Day.”
Courtney Reagan | CNBC
The bill would establish a new federal felony threshold that is also aggregated over any 12-month period rather than a threshold per incident.
“What this legislation will do, is allow prosecutors in the states, if they choose to, to pursue a federal remedy, instead of, or in addition to, a state remedy, when certain thresholds get met,” Shay told CNBC. “So if the total dollar value of the stolen guards exceeds $5,000 in a single year, local prosecutors can pursue a federal charge.”
Some criminal justice experts have questioned whether lowering the threshold will reduce crime, and said enacting stiffer penalties could potentially hurt marginalized groups.
While the members of Congress at the press conference, along with retail representatives and the NRF, acknowledge there is wide support for the measure, time is ticking on the legislative year to move it forward to committee and beyond.
McBride acknowledges passage of the bill would not be a panacea, but “it just adds another layer … to help the retailer and disincentivize the bad guys from using [organized retail crime] as a means for financing their criminal activities.”
The Combating Organized Retail Crime Act would follow another law known as the INFORM Act that went into effect at the end of June, which requires online marketplaces to verify the identity of their sellers with the goal of deterring the sale of stolen or counterfeit goods. Retailers that don’t comply will face fines.
When asked Thursday, Shay said it’s still too early to tell what the effects of the new legislation will be.
