The Impact Of Shoplifting

Walmart announced recently that it will be closing its last two stores within the city limits of Portland, Oregon, because the performance of the two stores wasn’t meeting the company’s financial expectations. The decision follows a recent statement by Walmart’s CEO that increasing retail theft was affecting the performance of its stores. The two store closures will affect 600 employees, who will be given the opportunity to transfer to suburban Walmarts in the surrounding area, as well as the people who live nearby and use the store regularly.

Portland evidently has a significant shoplifting problem, and it is making businesses make a difficult choice. Walmart’s CEO noted that the spike in shoplifting means that prices “will be higher and/or stores will close.”  Other businesses, including Nike and Cracker Barrel, have closed Portland locations. Smaller businesses have been hurt, too. The owner of an upscale consignment shop at a Portland-area mall had to close that location because it was hit by shoplifters 19 times in the course of a year. The shoplifters stole $56,000 in merchandise, which was more than the business could absorb. Portland news media reports that the shoplifters often are brazen, stealing even in the view of security cameras, and apparently have little fear of being arrested or prosecuted.

The consignment store’s owner voiced her frustration with the situation in this way: “The amount of work that goes into running a small business, down to the research, tags and training to do this the right way and then someone just steals a day’s worth of all your work, it’s like — ‘What’s the point?'”

Portland’s sad story illustrates the domino effect that occurs when criminals are not caught and punished. If retailers respond to shoplifting losses by raising their prices to cover the cost of the thefts, the impact is borne by shoppers who are actually paying for their goods, as opposed to pilfering them. If stores are closed, jobs are lost, employees are dislocated, storefronts go empty, and the commercial real estate market is hurt. And, because the thieves don’t pay for their crimes, others are incentivized to steal, and entrepreneurs who otherwise might be opening new businesses are discouraged from doing so.

It’s not a positive cycle.

The Scourge Of Shoplifting

One of the uglier recent developments in America is the rise in shoplifting. Many of us have seen videos of incredibly brazen shoplifting and incidents where gangs have smashed into retail establishments and looted their stores. Those videos are symptomatic of a much broader rise in shoplifting that a spokesperson for a retail trade association called “out of control.”

The statistics are shocking. A CVS spokesperson says that the drugstore chain has experienced a 300 percent increase in theft since the COVID pandemic began. A Rite Aid store in Manhattan closed its doors after experiencing $200,000 in shoplifting losses in December and January alone, and New York City grocers are hiring increased security to prevent thefts of steaks and other costly items. And 69 percent of retailers report a significant increase in “organized retail crime.”

Why are we seeing a spike in shoplifting? Retailers think that the lack of a police presence and the failure to seriously prosecute shoplifting are contributing factors and are advocating for a greater police presence and sterner prosecution efforts, but they also contend that the ability to easily sell goods online is helping to spur the surge. Organized shoplifting gangs who want to sell stolen goods don’t need to find a “fence” anymore–they can use on-line marketplaces to sell the boosted items. That’s why some retail groups are pushing for enhanced federal regulation of on-line sellers.

The surge in shoplifting should be of concern to all of us. Brick-and-mortar stores have historically been important parts of their communities and the sources of many jobs–especially starter jobs. Every retail store that is forced to close due to shoplifting reduces employment opportunities. And I don’t want to see an America where the only shopping is on-line shopping, or retail stores become prison-like settings with armed guards and all products kept behind lock and key. Unfortunately, if we don’t do something to stop the spike in theft, that may be where we’re heading.

The SF Shoplifting Surge

If you’ve been on the internet lately, you’ve probably seen one of the two recent San Francisco shoplifting videos that have gone viral. They are shocking, because in both of the videos the thieves are incredibly open and brazen about what they are doing. One video shows a guy on a bicycle, inside a San Francisco area drug store, stuffing stolen merchandise into a garbage bag before cycling out of the store. And just as that video was hitting viral status, another video surfaced of a gang of thieves stealing expensive purses from a high-end department store and sprinting out the door, their arms filled with loot.

This doesn’t appear to be another example of a random video causing an internet frenzy that is hyping something as a huge problem when the problem doesn’t really exist. The stories linked above, from a local San Francisco news station, report an alarming rise in shoplifting–so much so that according to the California Retailers Association, San Francisco is now one of the ten worst cities in America for shoplifting. And retailers are reacting to the alarming surge by shutting down stores or curtailing their hours–although the latter approach might not have an impact given that the thefts in the two videos happened in broad daylight. When retailers close stores or reduce hours of operation, and thereby cut into their revenue streams, you know there is a real problem.

According to one San Francisco official, the increase in shoplifting is the result of a concerted effort by organized criminal gangs, rather than unplanned crimes of opportunity. The S.F. police department and district attorney’s office have been asked to come up with a plan to deal with the problem before it gets worse and more stores close.

The answer to the problem seems pretty obvious: stationing more police, and establishing a more visible police presence, in the retail areas that are experiencing the surge, putting a priority on catching shoplifters, and then prosecuting the apprehended criminals to the fullest extent of the law. The bicycle bandit in one of the viral videos apparently has been caught and is in custody, and that news may help to discourage future theft.

I hope San Francisco takes this effort seriously. I’ve enjoyed my trips to the City by the Bay in the past, but no one wants to go to a place where open criminal activity is occurring. Viral videos like these suggest an atmosphere of lawlessness and insecurity. A would-be visitor’s concern is that if criminals are audaciously engaging in open retail theft, they might be emboldened to engage in other criminal acts, like crimes against people. When people have that perception, they’ll find another place to visit–or live.