Thefts, always an issue for retailers, become more brazen
By Michael Corkery and Sapna Maheshwari
“Flash mobs” swarm through a Nordstrom in Northern California and two Best Buy stores in Minnesota, running out with armfuls of merchandise. Five thieves steal $20,000 in products from an Ulta Beauty store in Pennsylvania in just 40 seconds. A security guard is fatally shot in Oakland, California, while working with a local television news crew reporting about a recent retail robbery by a group of thieves.
Theft is an ever-present issue for retailers. As much as $68.9 billion of products were stolen from retailers in 2019, according to one industry group. But it has become more visible, brazen and violent in recent months, forcing an industry already buffeted by pandemic lockdowns and fights over mask requirements to deal with a new problem.
“This level of violence has taken it to a whole new level,” said Rachel Michelin, president of the California Retailers Association. “No one has seen this before.”
Luxury retailers in Union Square in San Francisco — the site of several high-profile robberies this year — have boarded up windows to prevent more mayhem. Best Buy warned last week that theft was lowering profit margins and said it was using QR codes for checkout in some areas so employees did not need to unlock items right away. Home Depot has “hardened” its stores, putting power tools and other valuables out of reach and advising employees not to film robberies with their phones because it could escalate the situation.
“It has become second nature to take out your phone and record something when it happens,” said Scott Glenn, vice president of asset protection at Home Depot. “But these people are getting violent.”
Retail executives and security experts link the thefts to a confluence of factors, but primarily the ease with which thieves have been able to resell stolen goods on internet marketplaces like Amazon and Facebook.
But even industry veterans, who have been tracking generations of shoplifters, have been stunned by the methods and mindset of the thieves, saying they reflect a sense of impunity.
Some recent robberies — in which large groups rush into a store, overwhelm employees and flee in cars before the police can respond — recall the looting that occurred across the country amid protests after the murder of George Floyd in May 2020. At that time, people took advantage of police departments stretched by the protests and ransacked hundreds of stores, including the Macy’s in Herald Square in New York City and many smaller retailers, causing millions of dollars in damage.
As tensions flared across the nation, major retailers like Nordstrom and Target would not discuss the extent of damage to their stores or how many they had to close during protests, instead focusing on their empathy for the demonstrators. Designer Marc Jacobs wrote on Instagram: “NEVER let them convince you that broken glass or property is violence,” adding, “Property can be replaced, human lives CANNOT.”
With the unrest subsided, retailers are less reluctant to talk publicly about theft.
“Looting in general started during civil unrest and it has now evolved,” said Ben Dugan, president of the Coalition of Law Enforcement and Retail, a trade group focused on crime at retailers. “Criminal organizations saw during civil unrest that they were able to get their hands on millions of dollars of stolen product very quickly.”
The rise in thefts comes as punishments for retail theft have been broadly eased over the past decade.
Since 2005, 30 states have increased the dollar threshold for theft offenses, which effectively means that fewer people are going to jail for smaller thefts, according to the National Conference of State Legislatures. More than half the states now have a felony theft threshold of $1,000 or more.
The theft laws were changed to help reduce incarceration rates across the country, and some studies have found that the lower penalties have not led to more crime. And many of the most brazen crimes committed around Thanksgiving far exceeded the $1,000 threshold.
Still, the thefts are being politicized, with some leaders saying they show the failure of decriminalization efforts. Others worry that the recent crimes could be used as a pretext to ratchet up penalties and incarceration rates again.
Some industry experts say the problem is not necessarily the laws but the lack of enforcement by police and prosecutors, which emboldens enterprising thieves. A big priority, they say, should be breaking up the criminal organizations directing and profiting the most from the thefts.
Michelin, the head of the California retail trade group, has been meeting with local prosecutors and the governor’s office, which has established a task force on organized retail crime, trying to raise the urgency of prosecuting these cases.
“The level of organized retail theft we are seeing is simply unacceptable,” Gov. Gavin Newsom of California said in a statement. “Businesses and customers should feel safe while doing their holiday shopping.”
Speaking to reporters Friday, Jen Psaki, the White House press secretary, said federal law enforcement officials had been “in contact with jurisdictions where we have seen this high level of retail theft.” She added that the FBI was working with a task force led by the Los Angeles Police Department and that the Justice Department was providing money to hire 50 additional police officers in San Francisco. Both cities have experienced high-profile retail robberies in recent weeks.
Dugan, who has worked with a slew of major retailers and pharmacy chains like Walgreens, said that often, the people snatching items are paid small fees like $500 for each robbery, which then feed larger enterprises that resell the goods online. Typically, these robberies do not involve large groups looting stores but, instead, are smaller thefts that build over time.
Stolen goods used to show up at flea markets and pawnshops, but that has changed in recent years. One of the biggest issues that brick-and-mortar retailers have been grappling with is the rapid growth of online marketplaces where anyone can easily sell goods, often anonymously.
The anonymity reflects yet another instance in which criminals stymied by rules in the physical world can operate freely on the internet — an issue that has surfaced in problems involving misinformation, questionable advertisements and merchandise glorifying crimes.
Pawnshops, for example, are regulated in almost every state, said Richard Rossman, a sergeant with the Broward County Sheriff’s Office in Florida who is also part of the Coalition of Law Enforcement and Retail.
“If you’re going to sell an item to a pawnshop, the seller has to pledge that property is his or hers, it is not stolen, and the pawnshop documents the item appropriately on a state-regulated form and we can hold the seller accountable and the pawnshop accountable,” Rossman said. “There’s no mechanism in place right now that requires the collection of that data on the online marketplaces.”
The coalition has gotten support from industry groups and retailers, including pharmacy chains, Home Depot and Ulta Beauty, on bipartisan legislation known as the INFORM Consumers Act. The bill would require online marketplaces to authenticate the identity of “high-volume third-party sellers,” including their bank account information and tax identification, and allow consumers to see basic identification and contact information for those sellers. The rule would apply to vendors who made 200 or more discrete sales in a year amounting to $5,000 or more.