Congress held a hearing this week to discuss the escalating impacts of organized retail crime, bringing in experts from the retail and logistics sectors to testify to the hardships that have befallen their businesses and the solutions—including new legislation—that could help curb the issue.
The House Judiciary Subcommittee on Crime and Federal Government Surveillance on Wednesday brought in retail industry stakeholders, cargo transportation leaders and experts in crime prevention to testify to the importance of protecting businesses and consumers as retail crime becomes more prevalent and sophisticated.
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“Organized retail crime is a growing threat to our retailers and their employees, our law enforcement and our communities. The crisis is not going away; in fact, it is on the rise,” said Congressman Andy Biggs (R-Ariz.), the subcommittee’s chairman.
Biggs opened the hearing by speaking to the adverse impacts that retail crime and organized retail theft have had on the commerce sector in recent years. For example, America’s largest big box retailer, Walmart, lost $6.5 billion in revenue due to theft in 2023, and was forced to close 11 stores last year due to the severity of the issue.
“But ORC victims are not only big box stores,” he added. “Eight in 10 retailers have said the violence and aggression associated with or incidents increased in the past year.”
“Additionally, or groups have increasingly engaged in cargo theft, targeting the trucking and railroad industries as lucrative new sources of stolen goods,” Biggs said. According to the American Trucking Association, cargo theft has escalated to a point where it’s costing the United States trucking industry about $7 billion per year in losses.
Overall retail theft cost retailers an estimated $45 billion in 2024, and is projected to exceed $53 billion by 2027, he added, citing National Retail Federation data. Meanwhile, nationwide job losses attributed to the phenomenon rang in at more than 650,000 as merchandise theft and shoplifting jumped 19 percent over the past year.
It’s a trend that continues to grow; 2022 saw a 24 percent increase in retail theft, and 2023 saw incidents rise 18 percent. About half of all American retailers have said theft has increased over the past year, while cargo operators reported a 50 percent increase in cargo theft tied to ORC.
Biggs and other Republicans on the subcommittee blame soft-on-crime policies in certain jurisdictions for emboldening criminals and “fueling a rise in ORC.” Progressive bail reform laws as well as high felony thresholds have removed the teeth from enforcement efforts, he said.
Congressman Jamie Raskin (D-Md.) argued that part of the problem stems from a lack of coordination and alignment between law enforcement and stakeholders. “We need standardized national data utilizing a consistent, widely accepted definition of organized retail crime,” he said. “We cannot dismantle these criminal networks until we have a real understanding of how they operate and how much damage they’re causing.”
“Secondly, we need to see better coordination between federal law enforcement agencies and their state and local counterparts,” he added. “A national task force could be very useful in finding the broader patterns and local incidents and conducting complex investigations across state lines.”
Scott McBride, chief global asset protection officer and chief security officer for American Eagle Inc. told the subcommittee that “ORC is not new—what is new is the ferocity, sophistication, frequency and geographic reach that has escalated dramatically in the last five years.”
McBride pointed to a recent case involving the theft of nearly 2,000 pairs of American Eagle jeans worth about $100,000, along with $2 million in other apparel pieces. Homeland Security Investigations coordinated with state and local police in Texas to “investigate and interdict a consolidation and exfiltration scheme,” he said.
The stolen clothing was being prepared to be packed into a SeaLand container to cross the Mexican borders when HIS recovered the contents. RFID technology revealed that American Eagle merchandise was stolen from 35 stores across 13 states over a period of about a month. The group responsible for the crime was linked to transnational criminal organizations in Mexico, the security officer said.
McBride said American Eagle is now advocating on behalf of legislation it believes could improve the infrastructure for tackling ORC. The Combating Organized Retail Crime Act (CORCA) “is an essential missing layer” to enforcement efforts, as it would bring together federal, state and local law enforcement with private sector experts to share vital information, he said.
The bipartisan and bicameral bill has 230 combined sponsors and primarily proposes the creation of a Retail and Supply Chain Crime Coordination Center bringing together federal, state and local law enforcement in a national effort to share information, track criminals and trends in ORC and provide training and assistance for investigations that cross jurisdictional lines. It includes expansions of certain statutes to address related retail crimes like gift card laundering and the fencing of goods on online marketplaces. It also lowers the threshold for federal intervention to $5,000 or more over the course of a year.
Shane Bennett, principal of cyber defense for theft, fraud and Abuse at Target, agreed that CORCA would help “bridge that gap” between local and federal efforts to combat increasingly transnational and even global instances of ORC.
“I have witnessed firsthand how dangerous and highly coordinated ORC has become, and the impact it has had on both consumers and businesses. This isn’t about the casual shoplifter; organized retail crime is far more advanced,” he said. “No single state or retailer can see the full picture. Retail crime enterprises deliberately operate across jurisdictions to evade detection and prosecution. This makes it very difficult for state and local agencies to investigate their activities without the help of federal partners.”
Bennett pointed to Project Red Hook, an initiative with Homeland Security Investigations that Target took part in, as an example of effective collaboration between elements of law enforcement and retail stakeholders. The project specifically targets gift card money laundering schemes run out of China.
“This collaboration traces illicit financial flows, identifies transnational fraud networks and disrupts organized retail crime operations that span multiple states. In the past two years, there have been 232 arrests with asset seizures totaling approximately $8 million,” Bennet said. “This partnership shows that we can dismantle criminal groups,” he added—and CORCA would strengthen and expand the model by providing more tools for coordination, he added.
Chris Spear, president and CEO of the American Trucking Association spoke to the cargo impacts of ORC.
“Brazen thieves are robbing our industry to the tune of $18 million a day,” he said. “Motor carriers not only have to replace stolen products, but shoulder higher insurance premiums and invest in new security measures.”
According to Spear, these added expenses have not only put trucking jobs and businesses at risk, but they’ve led to elevated costs for consumers. “Plainly, there is a direct connection to rampant cargo theft and what Americans are paying at grocery stores across the supply chain. Cargo theft is estimated to cost up to $35 billion annually,” he said.
In addition to “straight theft,” a newer phenomenon, known as “strategic theft,” has struck the industry in recent years. “Strategic theft involves the use of advanced cyber tactics to trick shippers brokers and carriers to divert and hand over their loads,” the executive explained. “This high-tech form of cargo theft has become a digital Renaissance for thieves, surging 1,500 percent since 2021.”
The trucking trade group leader said 90 percent of businesses in the sector are small ones operating with 10 trucks or fewer. “Yet they are forced to compete in an arms race trying to match the formidable technological capabilities of sophisticated criminals were often based overseas,” he said.
The group is also backing CORCA, too, with Spear saying the legislation would help to “proactively unravel schemes orchestrated by transnational crimes.”
“This legislation would provide law enforcement with the tools and enhance legal frameworks to combat this highly complex national and international threat, rather than ignoring what our economy needs,” he said.
