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National Report Shows ORC and Return of Stolen Merchandise on the Rise

November 28, 2017   By Ryan Kearney

A report recently released by the National Retail Federation found that organized retail crime (ORC) and return fraud continue to be on the rise across the country. This troubling news for the retail industry and honest consumers came just days after the Massachusetts House of Representatives agreed with the Senate to increase the felony threshold found in a number of the state’s property crimes which are commonly utilized by retailers, law enforcement and prosecutors to curtail such professional criminal behavior. In light of these findings during the holiday shopping season, the Legislature should strongly reconsider finalizing these changes to the felony thresholds.

At the current felony threshold level of $250, Massachusetts retailers already experience significant losses due to theft with an estimated $1 billion in merchandise stolen from their stores annually—a cost ultimately paid for by honest consumers. The majority of these losses are attributed to professional criminals who see theft as a low risk, high reward activity due to weak property crime laws. The proposed increases— $1,500 in the Senate and $1,000 in the House—would further weaken these criminal laws by removing the threat of meaningful criminal penalties from an expanded number of serious theft incidents.

ORC is a wide-spread problem for the retail industry and is growing annually. At 96%, nearly all of the NRF’s survey respondents reported experiencing ORC activity in the past year and 67% reported an increase in such activity over last year. The report also found there to be an increase in return fraud, pointing to the return of stolen merchandise as the most common method of such fraud. At a time when ORC and return of stolen merchandise continue to present significant challenges for retailers of all sizes, Massachusetts is poised to incentivize further growth of such activity by increasing the amount of merchandise an individual may steal before running the risk of facing serious criminal penalties.

While Massachusetts is one of thirty-five states which have adopted criminal laws specifically targeting ORC related activity, our existing larceny, credit card fraud and receipt of stolen property crimes, which are impacted by these legislative proposals, remain the primary tools in the fight against ORC and the theft crimes underlying the most prevalent form of return fraud. The integrity of these laws must be retained to protect our businesses, their workers and all honest consumers.

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MAR. 14, 2016 • BY JON HURST

Maybe crime really does pay. At least it would under legislation recently passed by the Massachusetts Senate which increases the felony threshold contained in a number of our property crime statutes from $250 to $1,500. It allows fraudsters to run up $1,499 in charges on your credit card and thieves to steal or destroy up to $1,499 of your personal property with no risk of receiving meaningful repercussions. It also emboldens professional and sophisticated criminals who treat theft as a low risk, high reward activity due to our already weak criminal laws. It essentially decreases their cost of doing business while increasing the price you pay for consumer goods.

Annually, the Massachusetts retail industry loses an estimated $750 million in stolen merchandise, potentially worth $46.8 million in lost sales tax revenue. A cost shared by you in the form of higher prices—approximately $400 per household. The majority of these losses are attributed to organized crime rings using proceeds to fund other criminal activities including drug trafficking, arms dealing and even terrorism.

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