Five-finger discounts come out of your pocket

Organized gangs of shoplifters cost U.S. businesses billions each year.

KAI RYSSDAL: Fans of the five-finger discount know all about avoiding in-store detectives and hidden cameras. But retailers and police will soon have a new tool to fight shoplifting.

A national Internet database launches on Monday. Two leading trade groups are collaborating to fight organized retail crime — things like shoplifting, burglaries and counterfeiting. Marketplace's Jeff Tyler reports.


JEFF TYLER: Organized retail crime significantly eats away at the bottom line.

Joseph La Rocca is with the National Retail Federation — one of the trade groups championing the new database.

JOSEPH LA ROCCA: Retailers in 2005 lost $37.5 billion nationwide — about a percent and a half of their inventory. Which ultimately, you and I pay for as consumers. We pay more at the register, and it's almost like a hidden crime tax.

He says about two cents out of every retail dollar you spend goes to off-set the cost of crime.

LA ROCCA: This isn't little Johnny taking a pack of bubble gum. These are very organized, very sophisticated groups that are targeting retailers.

How does organized shoplifting work?

I asked Tim O'Conner with the trade group and co-sponsor, the Retail Industry Leaders Association. He says thieves move quickly along geographic corridors. Then:

TIM O'CONNER: Take the product back to the home base. And fence it, whether online or through a fencing operation that they run. They used to get 10, 20 cents on the dollar. Now they can get 50, 60 cents on the dollar. Because they run their own organization.

Of course, computers and electronics are popular. But O'Conner says they'll steal everything from lingerie and socks to . . .

O'CONNER: The ready-to-serve baby formula. There's a lot, a lot of dollars in that.

That stolen, unrefrigerated baby formula may spoil before it's sold over the Internet.

The new database will help retailers defend against criminal trends, and it will also help law enforcement identify patterns. A year's subscription to the database will cost around $1,200.

I'm Jeff Tyler for Marketplace.

About the author

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau, where he reports on issues related to immigration and Latin America.

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