Ohio consumers may face more locked goods as stores try to crack down on Christmas theft
Back in May, Target CEO Brian Cornell railed about the damage to the retailer's stores caused by thieves, estimating losses this year at a staggering $500 million.
"The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm's way," said Cornell, who's been open about the theft issues that have hurt the industry. "The unfortunate fact is, violent incidents are increasing at our stores and across the entire retail industry. And when products are stolen, simply put, they're no longer available for guests who depend on them."
Last month, the retailer closed nine stores in four markets — none of them in Ohio — because of theft.
"In this case, we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance," the retailer said. "We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all."
Going into the holiday shopping season, theft and the violence that goes along with it are among the issues facing retailers in what is the busiest and supposed to be the most profitable time of year for them.
"We need to do something. We're losing customers. We're losing merchandise," said former U.S. Attorney David DeVillers, tabbed by the Ohio Chamber over the summer to head a crime task force to examine retail theft and other crime across Ohio that the chamber says can throttle commercial growth.
Shrink, the measurement of losses calculated by a retailer during a specific period of time, hit $112.1 billion in 2022, up from $93.9 billion 2021, according to a report from the National Retail Federation. That represents 1.6% of sales last year, up from 1.4% in 2021.
Of those losses, about two-thirds can be blamed on theft, but in some sectors, it can be more than 70%, the report said.
Gordon Gough, president and CEO of the Ohio Council of Retail Merchants, estimates that theft translates into losses of $2 billion to $3 billion for Ohio retailers.
"It's a big deal," he said.
A September 2022 survey by the Ohio Chamber found that 62% of Ohio businesses say rising crime has kept them from expanding.
“While most Ohioans acknowledge that crime is on the rise, Ohio’s business owners feel the impact in two ways: not only to the safety of their family, friends and neighbors, but also the impact crime has on their businesses,” B.J. Martino, president and CEO of The Tarrance Group, which conducted the survey, said in a statement when the report was released.
It's not just the stealing
The shoplifting that is plaguing retailers is one thing, but videos of gangs of thieves storming into stores, smashing display cases and making off with thousands of dollars of handbags, jewelry, makeup, diapers, electronics, clothes, home furnishings and other products is another.
The retail federation report says 88% of retailers acknowledge that shoplifters have become more aggressive and violent compared with the prior year.
"While theft has an undeniable impact on retailer margins and profitability, retailers are highly concerned about the heightened levels of violence and threat of violence associated with theft and crime," the report said. "Retailers’ top priority remains providing a safe workplace for associates and a safe shopping experience for customers."
Devillers said organized gangs of five or six people typically are behind the thefts. The items often then are resold online or to other stores.
"A big problem is that it is so easy to resell this stuff," he said.
Of course, shoplifting is not the only crime that retailers face. They also reported increases in ecommerce fraud, phone scams to solicit gift cards or cash, and other kinds of crime including stolen goods being sold on third-party sites.
What are retailers doing to combat theft?
Generally, retailers take a hands-off approach when it comes to shoplifters out of concern for employee and customer safety.
"We look at the well-being of our customers and our store associates," Gough said.
More retailers participating in the National Retail Federation say no workers are authorized to intervene in a shoplifting.
Instead, retailers are spending more on personnel and technology in an effort to prevent theft and fraud, according to the report.
More items are being kept locked up, meaning customers have to ask workers to get them. Other stores have reduced operating hours, reduced the availability of products in stores, increased surveillance in store parking lots and hired off-duty police officers to provide security.
Target's Cornell said after the company released its most recent earnings report that customers appreciate having everyday products such as body wash and toothpaste available even if it means asking for workers to retrieve the products for them behind a locked glass panel. The retailer has boosted staffing to greet customers and get products for customers, something he says has not hurt sales.
The city of Columbus has introduced a program meant to reduce shoplifting by helping those who steal out of need. The City Attorney's Prosecution Division will identify low-level offenders whose crimes stem from quality-of-life factors like homelessness, poverty, mental illness or substance use. The aim is to connect individuals with community resources that can help improve their lives and lead them to forego stealing again.
The Ohio Council of Retail Merchants has been studying the issue and collaborating with the chamber committee.
Both groups are talking about criminal justice reforms that include new or enhanced penalties. Among the ideas: aggregation of multiple thefts across more than one county that could increase penalties of those who are convicted.
In the Ohio House, state Rep. Harz Ghanbari, R-Perrysburg, has announced plans to introduce the Fight Organized Retail Crime & Empower Law Enforcement Act, which is meant to protect retailers and consumers while targeting theft rings. Similar legislation is planned for the Senate.
Gough said in some cases, thieves try to keep the thefts below a certain amount so that any charges would be misdemeanors. The proposed legislation could, for example, aggregate the thefts so that the charges and penalties could be increased.
"The hope of this legislation is that prosecutors and law enforcement have more tool to go after these criminals," he said.
mawilliams@dispatch.com
@BizMarkWilliams
This article originally appeared on The Columbus Dispatch: Ohio retailers lock up merchandise in effort to curb shoplifting
