[ The National Retail Federation had said that nearly half of the
industry’s $94.5 billion in missing merchandise in 2021 was the
result of organized theft. It was likely closer to 5 percent, experts
say.]
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RETAIL GROUP RETRACTS STARTLING CLAIM ABOUT ‘ORGANIZED’
SHOPLIFTING  
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Eduardo Medina
December 8, 2023
New York Times
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_ The National Retail Federation had said that nearly half of the
industry’s $94.5 billion in missing merchandise in 2021 was the
result of organized theft. It was likely closer to 5 percent, experts
say. _

, Photo by Alex Menendez/AP

 

A national lobbying group has retracted its startling estimate that
“organized retail crime” was responsible for nearly half the $94.5
billion in store merchandise that disappeared in 2021, a figure that
helped amplify claims that the United States was experiencing a
nationwide wave of shoplifting.

The group, the National Retail Federation, edited that claim last week
from a widely cited report issued in April, after the trade
publication Retail Dive
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that faulty data had been used to arrive at the inaccurate figure.

The retraction comes as retail chains like Target
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to claim that they are the victims of large shoplifting operations
that have cut into profits, forcing them to close stores or
inconvenience customers by locking products away.

The claims have been fueled by widely shared videos of a few instances
of brazen shoplifters, including images of masked groups smashing
windows and grabbing high-end purses and cellphones. But the data show
this impression of rampant criminality was a mirage.

In fact, retail theft has been lower this year
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most of the country than it was a few years ago, according to police
data. Some exceptions, including New York City
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exist. But in most major cities, shoplifting incidents have fallen 7
percent since 2019.

Organized retail crime, in which multiple individuals steal products
from several stores to later sell on the black market, is a real
phenomenon, said Trevor Wagener, the chief economist at the Computer &
Communications Industry Association, who has conducted research on
retail data. But he said organized groups were likely responsible for
just about 5 percent of the store merchandise that disappeared from
2016 to 2020.

He emphasized that there’s “a lot of uncertainty and
imprecision” in measuring losses, because it is difficult to parse
out what is shoplifting and what is organized crime.

Mr. Wagener testified in Congress
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June about the discrepancy in the National Retail Federation’s
report.

Even as it retracted the figure and revised the report, the
federation, which has more than 17,000 member companies, insisted in
an emailed statement that its focus on the problem was appropriate.

“We stand behind the widely understood fact that organized retail
crime is a serious problem impacting retailers of all sizes and
communities across our nation,” the statement said. “At the same
time, we recognize the challenges the retail industry and law
enforcement have with gathering and analyzing an accurate and
agreed-upon set of data.”

At issue is “total annual shrink” — the industry term for the
value of merchandise that disappears from stores without being paid
for, through theft, damage and inventory tracking mistakes.

Mary McGinty, a spokeswoman for the federation, said the error was
caused by an analyst from K2 Integrity, an advisory firm that helped
produce the report.

The analyst, who was not named, linked a 2021 National Retail
Federation survey with a quote from Ben Dugan, the former president of
the advocacy group Coalition of Law Enforcement and Retail, who said
in Senate testimony in 2021 that organized retail crime “accounts
for $45 billion in annual losses for retailers.”

Mr. Dugan was citing the federation’s 2016 National Retail Security
Survey, which was actually referring to the overall cost of shrink in
2015 — not the amount lost to just organized retail crime, Ms.
McGinty said.

Alec Karakatsanis, a civil rights lawyer who has studied and critiqued
how the media has covered organized retail crime, said that the
retraction underscored how some news organizations, which have
extensively covered the issue of shoplifting, were “used as a tool
by certain vested interests to gin up a lot of fear about this issue
when, in fact, it was pretty clear all along that the facts didn’t
add up.”

One of the most prominent examples came in October 2021, when
Walgreens said it would close five stores in San Francisco, citing
repeated instances of organized shoplifting. The company’s decision
had come months after a video seen millions of times showed a man,
garbage bag in hand, openly stealing products from a Walgreens as
others watched.

But an October 2021 analysis by The San Francisco Chronicle
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that Police Department data on shoplifting did not support
Walgreen’s explanation for the store closings.

Eventually, Walgreens retreated from its claims. In January
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an executive at the company said that Walgreens might have overstated
the effects on its business, saying: “Maybe we cried too much last
year.”

Mr. Karakatsanis said the exaggerated narrative of widespread
shoplifting was weaponized by the retail industry as it lobbied
Congress to pass bills that would regulate online retailers, which
they claim is where much of the stolen product ends up.

Commentators and politicians have seized on the issue. Earlier this
year, Gov. Gavin Newsom, Democrat of California, responded to reports
of large-scale thefts in the state with a call for tough prosecution
of shoplifters
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plan
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invest millions of dollars to fight “organized retail theft.” Gov.
Ron DeSantis, Republican of Florida, signed a bill last year
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at retail theft, and former President Donald J. Trump called for
violence, telling Republican activists in California this year that
the police should shoot shoplifters as they are leaving a store.
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Mr. Wagener, the chief economist at the Computer & Communications
Industry Association, said that the National Retail Federation’s
report in April immediately stuck out to him as wrong. The error was
troubling, he said, because the federation has long been viewed as a
trusted provider of data for the industry.

What made the federation’s mistake even more surprising, Mr. Wagener
said, was how starkly the figure contrasted to the group’s own
previous findings.

In 2020, the federation said in a report
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organized retail crime cost retailers an average of $719,548 per $1
billion in sales — a number that would point nowhere near the
roughly 50 percent claim made in the April report.

Another National Retail Federation survey showed
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all external theft — including thefts unrelated to organized retail
crime — accounted for 37 percent of shrink, a figure that would
still be billions of dollars less than the incorrect estimate of 50
percent made in April.

“It would be a bit like the census claiming that nearly half of the
U.S. population lives in the state of Rhode Island,” Mr. Wagener
said.

 

* Shoplifters
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* Retailers
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* war on crime
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