Retailers and trade associations across the country are pushing for state and federal laws to impose harsher penalties for those engaging in organized retail crime.
Since 2022, at least nine states have passed laws to do just that, six of which have occurred this year, CNBC reported Friday (Aug. 11). Organizations such as the National Retail Federation (NRF) are at the helm of this surge, helping to write bills that increase punishments to deter theft.
There is also activity at the federal level, according to the report. In January, two U.S. senators introduced the Combating Organized Retail Crime Act (CORCA), a bill with 60 bipartisan co-sponsors in the House and five in the Senate.
The proposed legislation calls for lowering the threshold prosecutors must meet before bringing federal theft cases, the report said. It would also impose stiffer penalties and create a mechanism for sharing and publicizing trends in organized retail theft.
Retailers note that organized retail theft causes higher prices and store closures, per the report. Public officials have seen that store closures caused by retail crime disrupts employment, tax revenue and the economic well-being of communities.
The advocates of tougher sanctions on organized retail theft succeeded in gaining support for the Inform Act that took effect in June, according to the report. This new law requires online marketplaces to disclose the identities of high-volume sellers in order to deter sales of stolen goods.
At the same time, these bill have opponents, the report said. They argue that stiff sanctions don’t reduce crime, that these proposals are being pushed by groups on the grounds of their own interests, rather than the public interest, and that retailers could be overstating the amount of theft.
During May, retailers such as Target, Dollar Tree, Home Depot, T.J. Maxx, Kohl’s and Foot Locker collectively identified inventory shrinkage, retail theft or both as contributing factors behind their reduced profits or negative impacts on gross margins.
The NRF said in April that 81% of organized retail crime rings target everyday consumer goods, while only 11% target luxury goods. The groups have found that everyday consumer goods provide them with the right combination of ease of theft, monetary value and ease of resale, NRF said at the time.