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Shoplifting and Organized Retail Crime: Mall Rats

John Talamo of The Limited knows exactly how profitable shoplifting can be. He explains the fight against organized retail crime.

As vice president of loss prevention at Limited Brands in Columbus, Ohio, Talamo has made it his mission to fight organized retail crime—groups of professional shoplifters who can steal $25,000 worth of merchandise from a mall in one fell swoop, then turn around and sell the loot to a fencing operation that offers it to the public at half the retail price. According to one Limited informant, a good "boosting" operation, as these crews of shoplifters are called, can net more than $40,000 in one day—"not bad for a day's worth of shopping," Talamo quips.

No wonder organized retail crime (called ORC here) is a booming business. In the last year, Victoria's Secret—Limited's most popular target—has had more than $2.7 million worth of bras reported stolen, a more than 80 percent increase over the previous year. But Talamo, who is also cochair of the Joint Organized Retail Crime Task Force established by the National Retail Federation, is working to make ORC decidedly less profitable. He does this both by leading an aggressive team of investigators and by working to educate law enforcement, prosecutors and judges about this type of crime.

"Limited Brands and John specifically have really helped put organized retail crime on the map over the last three or four years," says Joseph LaRocca, vice president of loss prevention at the National Retail Federation, a trade group in Washington, D.C. "No case is a good case. A case means that someone got away with something. But Limited has been able to really show the industry what good investigative skills and good collaboration with law enforcement can produce."

Senior Editor Sarah D. Scalet recently spoke to Talamo about how ORC works, how Limited Brands is changing its strategy to focus on fencing operations and victims' rights, and why thieves are so attracted to Victoria's Secret bras.

CSO: How organized is organized retail crime these days?

John Talamo: It's a very big business. Every year the University of Florida conducts a security survey, and in the last results, shrink as a whole was $37.4 billion total. Thirty-three percent of that was external theft, the majority of which is organized retail crime theft. So ORC conservatively is a $12.3 billion problem, but I believe that number is understated because it doesn't include credit card fraud, counterfeiting and receipt fraud. ORC is a bigger problem than auto theft, which is $7.6 billion; burglary, which is $3.5 billion; and larceny, which is $5.15 billion (according to the FBI's uniform crime report of 2004). In 2006, President Bush signed the first-ever organized retail crime legislation, H.R. 3402, which establishes an FBI task force on ORC and also the creation of a national database. The mere fact that we now have federal legislation that crosses over the boundaries of state lines will be a big help. But this [fight] is just in its infancy right now.