Retail Crime Costing US Consumers Billions

Organized retail crime rings are elevating shoplifting to a new level, costing stores — and ultimately everyday consumers through higher prices — billions, NBC reports.

In 2022, retail theft, or inventory shrinkage as a percentage of total retail sales, accounted for $112.1 billion in losses, up from $93.9 billion in 2021, according to the National Retail Foundation.

Lowe’s alone had $997 million worth of goods stolen in fiscal 2022. Target saw $219.5 million of goods stolen and Dick’s Sporting Goods, $27.1 million, in the three months through July 2023.

The rampant “smash and grabs” are why Target recently said it is closing nine major stores in big cities, including New York and San Francisco. Locking up goods, including mundane items like toothpaste; hiring security guards; and lobbying local and state lawmakers for stricter regulations, have all failed to stop retail theft from plaguing the United States.

The problem, experts say, is that the police and district attorneys view store theft as much less important than homicides, shootings and narcotics crimes.

The lapse in policing and prosecuting these crimes is emboldening the criminals, now organized and professional.

“We’re talking about operations that have fleets of trucks, 18-wheelers that have palletized loads of stolen goods, that have cleaning crews that actually clean the goods to make them look brand new,” says Adam Parks, assistant special agent in charge at Homeland Security Investigations.

“Just like any business, they’ve invested their capital into business assets like shrink wrap machines, forklifts,” says Parks, based out of HSI’s Baton Rouge, Louisiana, office. “That is what organized theft looks like — and it actually is indistinguishable from other e-commerce distribution centers.”

An example of one such crime lord is Michelle Mack of San Diego, who police say built an empire by having her minions steal a fortune of cosmetics from Ulta and Sephora stores around the country, which she then resold on Amazon.

Foot soldiers for such crime rings may dress like upstanding citizens. They’ll quickly and efficiently clear out entire shelves of merchandise before stuffing them, for instance, in Louis Vuitton bags and surreptitiously leaving.

“It can be anybody,” says Scott Robles, assistant special agent in charge of arresting thieves at the HIS office in New Orleans, Louisiana. “It could be a mom with five kids just looking for extra money.

“It can be somebody that’s part of a team,” Robles continues. “They may be getting paid with food. They may be getting paid with beer or drugs. Some people get paid cash or they’re trying to work off a debt.”

CNBC spent eight months embedded with various law enforcement agencies in the U.S. to understand how the thefts are handled. In most cases, the thieves are homeless, transients, or mentally ill people.

However, CNBC witnessed firsthand takedowns by groups that police allege are organized rings, including the Mack gang.

Further proof of the scourge of retail theft is the fact that local and federal government agencies have stepped up their enforcement of laws against organized retail crime. In 2021, HSI brought 59 cases against this type of theft. In fiscal 2023, that had grown to 199, including 386 arrests and 284 indictments.

Just as the people recruited in the organized crime rings can look innocent, so can the places where they store their stolen goods. In November, California Highway Patrol found 20,000 items worth $550,000 from just one ring stored in homes and containers in five locations in the San Jose, Calif., area.

Crates contained everything from jugs of Gain and Tide detergent, to Allegra allergy pills, to Huggies, to sparkly T.J. Maxx silver boots in sizes 8, 9, and 10.

Stores fed up with the crime are leaving cities, like New York, Chicago, Washington, D.C., and San Francisco, which erodes the fabric of the communities and, experts say, leads to more crime.

One hope is that if the big box store chains cannot get the government and the police to do a better job of stopping retail crime, the public will.

“There’s certain crimes that come up where the public reaches a point where they’re like, ‘We have had enough of this,’ right?” reasons Lt. Michael Ball, who helped take down the operation in the San Jose.

“And this is one of those that’s reached the level where people are saying widely and shouting it all the way up to our governor’s office, that they have had enough of this.”