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Retailers Confront Credit, Gift Card Fraud
WASHINGTON -- Savvy, confident organized retail crime gangs who steal billions of dollars in merchandise each year so they can sell that merchandise online or fence it tests retailers to the core, the National Retail Federation says. Over the past year, 93% of retailers say they've been victims of organized retail crime.
For the past three years, more than 90% of the retailers surveyed in the federation's annual survey of organized retail crime report they’ve been victims. Equally disturbing to the federation is that 81.3% of its members believe such activity has increased over the past three years.
“We are extremely concerned by the organized patterns that are taking place in the retail industry right now as these crime gangs continue to find ways to maneuver the system,” said Rich Mellor, federation vice president of loss prevention,in a prepared statement. “Although retailers continue to make great strides in their fight against organized retail crime, savvy, unconscionable criminals are selling stolen merchandise for a profit that doesn’t belong to them."
For the first time, the federation has asked the senior loss prevention executives surveyed about their experience with store credit merchandise/gift card fraud, and found the results “troubling”: When asked specifically if they’ve experienced boosters who return stolen merchandise without a receipt for the sole purpose of receiving store credit via a gift card, who then turn around and sell that merchandise credit for cash to secondary markets that include kiosks, pawn shops and check cashing stores, 77.8% said they have experienced this.
One of the most distressing trends, the federation says, is thieves resorting to violence to avoid being apprehended, putting store personnel, law enforcement and customers at risk. In the survey, retailers say on average 18.3% apprehensions lead to some level of violence, up from 15.2% last year and 13% in 2011.
Individuals connected to “gateway crimes,” or crimes that lead to more seriois crimes, such as the use of or sale of drugs and weapons, are often found to be associated with organized crime gangs. According to the survey, retailers say on average 44.8% of those apprehended are involved in gateway crimes.
Thanks to better communication between retailers and law enforcement, awareness among law enforcement officials is at an all-time high, the fedreation says. Nearly half of the retailers say they believe law enforcement understands the complexity and severity of organized credit card fraud, up from 40% last year and the highest percentage reported in the five years of asking this question.
Published by The Business Journal, Youngstown, Ohio.
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