Target executive warns House panel on rise of organized retail theft rings

WASHINGTON A Target Corp. executive warned Congressional lawmakers today that U.S. retail companies are increasingly plagued by powerful and highly organized syndicates that steal inventory on a large scale, and use sophisticated inventory control systems and online shopping techniques to traffic in stolen merchandise.

Brad Brekke, vice president of assets protection for Target, testified on behalf of the Coalition Against Organized Retail Crime before the U.S. House of Representatives Judiciary Subcommittee on Crime, Terrorism and Homeland Security Thursday. The panel’s hearing was titled “Organized Retail Theft Prevention: Fostering a Comprehensive Public-Private Response.”

The House panel is examining options for federal legislation to prevent organized retail crime, which accounts for an estimated $30 billion in retail losses annually. In his testimony, Brekke discussed the nature of retail crime, industry efforts to combat it and the role of online auction sites in fueling the dramatic growth of ORC.

“These criminal commercial enterprises are of a different nature and a different scale from what we have come to understand as ‘shoplifting’,” said Brekke. “Today, commercial ORC gangs exhibit modern practices of inventory management to help them meet the growing demand for the entire range of stolen merchandise.”

Along those lines, he said, “the Internet has transformed their ability to resell their stolen goods” by creating “a world-wide market for stolen goods in which the sellers are anonymous and there is an enormous universe of buyers who are generally unaware of the nature of the goods sold.”

Given those conditions, Brekke told lawmakers, a comprehensive response involving a partnership of government and private enterprise needs to be taken to stem the organized-crime theft trade. “In the most recent year, Target alone made approximately 75,000 theft apprehensions in its stores,” he said. “The growth in organized retail crime, fueled by technology and Internet fencing, has reached such a scale that retail and law enformement cannot successfully fight this problem one booster and one fence at a time.”

The solution proposed by Brekke and other coalition members, including the National Association of Chain Drug Stores, is to enforce transparency in Internet auction sites. “We need to have responsible Internet auction sites make modest changes to their sites to help reduce sales of stolen property…by applying traditional models of stolen property regulation to the Internet and inject some needed transparency to these transactions,” said Brekke.

Injecting transparency, he added, involves identifying sellers and providing serial numbers on goods being sold online, and enforcing Internet sales requirements at the federal rather than simply the state level.

NACDS president and chief executive officer Steve Anderson praised the House committee and its chairman, Rep. Robert Scott, D-Ohio, for their work in addressing the issue. “Organized retail crime drains businesses, penalizes consumers, and sustains illegal activities that threaten communities,” he said.