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14 Security Dealer & Integrator / www.SecurityInfoWatch.com January 2018 Stay up to date on retail security: www.securityinfowatch.com/retail 2012. Following in order were: New York City, Houston, Miami, Atlanta, Chicago, Orlando, San Francisco/ Oakland, Orange County, Calif., and Northern New Jersey. Return Fraud Continues to Rise Return fraud continues to pose a serious challenge for the retail indus- try; in fact, retailers expect 11 percent of purchases to be returned this year, and more than 10 percent of those returns are likely to be fraudulent. The return rate for items pur- chased online but returned to a store is the same, but with a lower fraud rate of 9 percent. Of items returned without a receipt, 17 percent are believed to be fraudulent. During the holiday season, 13 percent of pur- chases will be returned, with 11 per- cent thought to be fraudulent. Of retailers that have experienced return fraud, the most common method is the return of stolen mer- chandise (68 percent), followed by employee return fraud (65 percent), returns of merchandise purchased on fraudulent or stolen tender (57 percent), returns made by ORC groups (54 percent), wardrobing (40 percent), returns using counter- feit receipts (29 percent) and returns using e-receipts (19 percent). ■ According to the National Retail Federation's 13th annual Organized Retail Crime (ORC) study, ORC continues to impact retail at ever-increasing rates; in fact, 67 percent of loss prevention exec- utives surveyed reported seeing an increase in the crime in the past year. The survey of 63 loss prevention retailers representing department, big-box, discount, drug, grocery and specialty stores, found that a whop- ping 96 percent of companies had experienced ORC in the past year – with losses attributed to ORC averag- ing $726,351 per $1 billion in sales, an increase from $700,259 previously. "ORC continues to be one of the biggest challenges to retailers of all sizes," NRF's Bob Moraca, VP for Loss Prevention, said in a statement. "These crimes happen every day, with criminals getting smarter, more brazen, more aggressive and some- times even attacking store employ- ees and shoppers. "Fighting ORC is a full-time job," Moraca added, "and retailers must learn how to stay a step ahead of these thieves." The survey also found that six in 10 retailers had recovered merchandise from physical fencing locations – Survey: Organized Retail Crime again on the Rise Two-thirds of retailers say they have seen an increase in ORC activity in the past year including pawn shops, flea markets kiosks and temporary "pop-up" stores – about the same as last year. Criminals often turn to the inter- net to fence stolen items due to the anonymity it provides, however; only 56 percent of retailers polled in this year's survey reported finding stolen goods online, down from 75 percent. 28 percent said they had found their stolen merchandise exported illegally outside the U.S. Among the top items stolen by ORC thieves this year include: designer clothes, denim pants, razors and designer handbags. Additionally, the survey found that 40 percent of retailers were victims of cargo theft – merchandise stolen on its way from distribution centers to stores or elsewhere along the supply chain — down from 44 percent last year. Los Angeles continued to be the hardest-hit area for ORC in the nation, a position it has held since Market Report / News from key verticals SECURITY WATCH BY JOEL GRIFFIN, EDITOR, SECURITYINFOWATCH.COM ■ 67 percent of loss prevention executives surveyed by the National Retail Federation reported seeing an increase in Organized Retail Crime in the past year. The top items stolen by ORC thieves include designer clothes, denim pants, razors and designer handbags.