Rising Retail Theft: Here’s What Business Owners Need to Know

Story by Kaitlyn Ridel, U.S. Chamber of Commerce

Communities and businesses large and small across the United States are facing a significant increase in retail theft and organized retail crime that requires the swift response of policymakers.

Why does this matter?

These crimes are not victimless. In addition to the growing number of thefts that turn violent, innocent consumers, employees, local communities, and business owners and shareholders bear the costs of rising retail theft. Twenty-five percent of small businesses report raising prices as a result of shoplifting. Some retailers have been forced to shutter locations in response to rampant theft.

Numbers to know:

• 54% – A recent survey of small business owners found that a majority (54%) experienced an increase in shoplifting in 2021.

• $700K – Organized retail crime cost stores an average of over $700,000 per $1 billion in sales in 2020, up more than 50% in the last five years, according to a survey of larger retailers by the National Retail Federation.

“The retail industry – already struggling from the impacts of the pandemic, labor shortages and supply chain problems – is now faced with large-scale theft and looting, much of it stemming from organized crime,” said Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce. “Retail theft is becoming a national crisis, hurting businesses in every state and the communities they serve. We call on policymakers to tackle this problem head-on before it gets further out of control. No store should have to close because of theft.”

What’s next?

We have sent a letter to Congress, the National Governor’s Association, the National Conference of State Legislators, and the National District Attorney Association urging policymakers to take the following steps to address theft and organized retail crime:

• Congress should pass legislation to stop the sale of stolen goods on online marketplaces: The bipartisan H.R. 5502, “Integrity, Notification, and Fairness in Online Retail Marketplaces for (INFORM) Consumers Act,” would increase transparency and identity verification of high-volume third-party sellers in online retail marketplaces while protecting the privacy of small sellers and establishing a uniform federal standard that would provide certainty and consistency for the business community. This legislation would deter retail crime by closing off a prominent avenue by which criminals seek to profit by selling stolen goods, often to unsuspecting customers.

• Update the definition of organized retail crime and increase criminal penalties: States should act to define the crime of “organized retail theft” in criminal law to specify those thefts involving two or more participants and an intention of resale and include increased penalties for those specific violations.

• The law and prosecutors must hold those who engage in organized and significant retail theft accountable: Since 2000, at least 40 states have raised the thresholds for the value of stolen goods to trigger a felony charge. In some instances, criminals are taking advantage of these increased higher thresholds to engage in repeated thefts and avoid prosecution. States should reconsider these thresholds and prosecutors should avoid adopting broad non-prosecution policies.