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The Honolulu Advertiser
Posted on: Tuesday, August 1, 2006

Merchants unite against organized retail theft

By Anne D'Innocenzio
Associated Press

Gillette razors, like this one in a Little Rock, Ark., Wal-Mart store, are a popular item among organized retail thieves. Industry sources estimate that shoppers pay almost 2 cents of every dollar to cover theft costs.

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NEW YORK Stores are worrying less about teens stealing CDs than about sophisticated criminals like Samih Fadl Jamal of Mesa, Ariz., the ringleader of a major organized-theft operation that stole and resold millions of dollars of baby formula throughout the country.

Such highly sophisticated groups have been targeting retailers for several years, but merchants are just starting to come together to fight organized retail theft, developing crime databases and establishing crime squads.

Organized theft costs the industry an estimated $30 billion annually and rising. Customers also pay a hefty price too. The National Retail Federation, the industry's largest trade group, estimates that shoppers pay almost 2 cents on every dollar they spend to cover the cost of retail theft.

The increased focus on this issue was underscored earlier in July, when news broke that Wal-Mart Stores Inc., the world's largest retailer, will no longer prosecute one-time thieves unless they are between ages 18 and 65 and steal at least $25 worth of merchandise.

Wal-Mart, which had a zero-tolerance policy, joins a number of retailers who are putting more of their energy into bigger shoplifting crimes.

But that doesn't mean that the nation's retailers are giving a free pass to petty shoplifters. They emphasize they are still going to catch and stop such thieves.

"This is not an invitation to petty theft," said Sharon Weber, a Wal-Mart spokeswoman. "We are hard targets for crime, and we intend to stay that way." In fact, Weber warned that the new policy is only a guideline for stores, and petty thieves will still be detained and prosecuted in many cases.

Unlike average shoplifters, who steal for themselves, those who are involved in organized crime steal the goods and resell them to flea markets, pawn shops or on the Internet. They typically focus on specific brands and products that carry a high resale value, are in constant demand and have a high profit margin, such as Gillette razors.

Both the NRF and the Retail Industry Leaders Association launched password-protected national crime databases online, which let retailers share information about thefts to detect whether they've been a target of organized crime. In the past, merchants had never shared information, so rings could hit various stores in one area without being detected.

Meanwhile, retailers like Gap Inc., Sears Holdings Corp. and Wal-Mart all of which are participating in these databases also have their own organized- crime squads.

This year, Congress authorized an organized retail crime task force run by the FBI. According to Eric Ives, the FBI's unit chief for the major theft division, the agency will develop its own crime database that may combine those of both retail associations.

Ives said that violent gangs, particularly one called MS-13 which has its roots in South and Central America, have become a growing force behind organized retail theft.

Thieves could also be criminals like Jamal, who employed more than 20 others to steal infant formula at stores around the country from 1997 to 2003.

Jamal was convicted last year of 20 charges and sentenced to 10 years in prison, the FBI said.