The "Organized Retail Crime" Panic [TEASER]

Michael. Peter.
What do you know about organized retail crime? I think it's time that we finally bring the focus back to the real victims. Someone who has to ask a retail employee to unlock the Gillette Mach 3.
Before we get going, I'm gonna send you a YouTube clip. Oh.
This is from Good Morning America. Oh, no.
From a couple months ago. Okay.
We're just going to watch the first minute and a half or so of this. So let me know when you want to count it down.
Vibe setters. My YouTube settings are all on 2x speed, so I have to make sure it's on normal.
It's ruined. It's absolutely fucking ruined human interaction for me.
I need you to go faster and speak in a bizarre, frantic monotone. Okay.
Back now with a new warning about a surge in organized retail crime. Stores are losing big money, raising prices to cover it.
And the greatest cost could be to the safety of workers arraship here with the details good morning good morning to you george retailers we talked to are losing billions of dollars to organize retail crime and authorities are warning that this has become an absolute threat to public safety with violent gangs dangerous international crime rings and even groups with suspected ties to terrorism increasingly getting involved. Peter.
You've seen the videos of brazen smash and grabs at many different retailers across the country, and federal authorities are now sounding the alarm about coordinated robberies like these. It's an absolute threat.
It's called organized retail crime, where groups of criminals steal high-value items to then sell online or elsewhere. They know exactly what stores to hit, when and where.
Obviously, the profitability is the key here. Retailers say this type of crime is reaching unprecedented levels, forcing the average family to pay an estimated $500 more each year on goods.
Are you seeing a dramatic rise in this type of crime?

Absolutely.

It's growing double-digit year over year.

Double-digit year over year.

And Homeland Security officials tell ABC News they now see violent gangs and dangerous

international groups getting involved, organizations suspected of ties to drug trafficking or even

terrorism financing.

These criminal networks, they may be full-time drug traffickers that see an opportunity to work with a crew that's already stealing. A crew.
Oh, man. The amount of facts in that minute and a half of good morning, America, objectively made up.
Yeah. We need to do like a frame by frame analysis.
This is like a narrative that is all over the place in our sort of media ecosystem. Right.
There is sort of like this underlying, very simple narrative. Right.
Shoplifting is out of control. Yes.
And the heart of the problem is organized retail crime. There's a ton of discourse around San Francisco as like the epicenter of it.
In May of 2021, the New York Times ran an article titled San Francisco's shoplifting surge. And then later in the year, the Wall Street Journal ran one titled San Francisco has become a shoplifter's paradise.
Walgreens announced that they were closing locations in San Francisco due to the issue. Target made public statements to investors about their concerns about theft across the country.
The New York Post published a story titled The Shoplifting Epidemic Taking Over America. Police departments are making statements.
And to really heighten the drama, there has been like a consistent stream of viral surveillance footage videos of groups of people, usually teenagers, doing smash and grab robberies, meaning they bust into a store all at once, ransack the place, grab everything they can, run out. It was very funny in this clip where they're like, they know exactly when to hit the stores.
First of all, it's not even clear that that's like true. And secondly, it doesn't take a lot of coordination to do that.
It's just like, yeah, you'd probably go during the day when there are fewer employees. Yeah, like after school.
Yeah, it doesn't mean you're like a criminal mastermind. So you have all of this reporting that's sort of about shoplifting.
And then it's also about these smash and grab robberies. Yeah.
And then they just sort of speculate about organized retail crime, meaning like organized crime rings that target retailers. Could it be Al-Qaeda? Unclear.
We don't know. The weird thing about this whole like organized retail crime shoplifting out of control narrative is that there is basically no real evidence that any of it is true.
So let's look at the stats here and let's start with basic shoplifting. Right.
Everyone everywhere seems to be saying that shoplifting, especially in California, is out of control. In late 2021, CNN published an article that said, quote, San Francisco has seen a surge in crime since it reopened in the pandemic.
In the Central District, for example, larceny and theft incidents are up almost 88 percent from a year earlier. Oh, during the pandemic when everyone was fucking inside? Am I stealing your did I did I spoil? No no i no i paused so that you could basically piece together okay okay you knew i was gonna have a little outburst there what has to be the most obvious conclusion you could draw yeah from looking at that data it's may 2021 and you're like larceny is up 88 yeah of course it's up yeah's up.
Stores weren't open a year ago. Bar fights were probably up like a thousand percent because people could go to bars for a year.
The comparison you need to make is between 2021 and 2019. Yeah, yeah, yeah.
And if you look at those numbers in that same central district in San Francisco, larceny was down 14%. Right.
It increased in 2022, but the number is still below where it was in 2019, which is itself below where it was in 2018. And the same is true across San Francisco.
Now, the 2021 shoplifting rates in all of California were well below the pre-pandemic rates. There was a 29% spike in 2022 as like reopening continued, but it's still below pre-pandemic levels.
But if you look at just San Francisco itself, there actually is an increase. The raw number of shoplifting reports in 2022 is about 19% higher than it was in 2019.
It's actually pretty significant. It is.
So I saw that and I thought, OK, simple enough. The New York Times wrote their piece about the shoplifting surge in May 2021.
That was basically fictional. But a year later or so, they have somehow stumbled into the truth, right? The fears of a widespread shoplifting epidemic might be bullshit.
But if you look at San Francisco, there is a noticeable spike, right? Open and shut, or so I thought until I started digging in further. The average number of monthly reported shoplifting incidents in San Francisco collapsed during the pandemic, of course, starts steadily rising as things open up in 2021.
But then in September 2021, the number doubles. So a reporter for the San Francisco Chronicle takes a look at the data and they realize that nearly all of that increase comes from a single target downtown.
In August of 2021, it reported 13 shoplifting incidents in September 154, which was about 40% of the total shoplifting incidents in San Francisco that month. So what happened, right? Was there one massive incident where they hit by a ring? No, what happened was that that target changed their reporting system to one that resulted in more reports to police.
Yeah, makes sense. So a blogger poked around and found at least one other instance of this where a single Safeway in November of 2021 jumped from one shoplifting incident per month to 120.
Oh, wow. So if you control for these outlier stores, the spike in shoplifting in San Francisco that began in late 2021 and has carried through to the present actually goes away.
Yeah. We'll talk in a bit about like what data we can rely on and can't if there's anything concrete.
Yeah. But I think it's safe to say two things.
One, the police data is trash. Yes.
Two, to the extent you can rely on it, there's no reason to believe that there's been a shoplifting spike in San Francisco or anywhere else. Right.
At the most basic level, it's like this isn't based on like an actual credible spike in shoplifting. It's based mostly on vibes.
Yeah. It's also pretty funny that that Safeway only had one incident of shoplifting before they changed their reporting thing.
It just shows the whole thing is fucking fake. The 150 numbers also fake.
The whole thing is fake. We just don't know.
So despite all of the media coverage, police, corporate executives, all saying theft is up, there's really no data showing that theft is up. And the most reliable data that we have indicates that it's not.
Not only that, but the media panic started at a time when shoplifting was demonstrably down, not up. So like, what is going on here? I think the easiest explanation is social media, right? We get these viral videos of these smash and grab robberies, creates the sensation that there is something unusual happening.
That's probably part of it. And I think that's probably a big part of why this sort of messaging has been effective.
But it doesn't really explain why the messaging exists to begin with. When I was researching this, one organization kept popping up, the National Retail Federation.
I mentioned that once earlier. This is the country's largest retail trade association.
They conduct annual surveys of retailers that encompass all sorts of issues, but they are very focused on security. They are also a major lobbying organization.
They lobby for corporate tax cuts. They lobby against minimum wage increases.
Right. And they lobby for aggressive law enforcement.
Right. So if you notice, we haven't even really talked about organized retail crime.
Right. This is sort of two mysteries wrapped up in one.
First, why is everyone freaking out about shoplifting when there's no real evidence that it's getting worse? And second, why does every article about shoplifting also mention organized retail crime? And I think the answer to all of this is retail lobbying. So the term organized retail crime has been around for a while, but it seems to have been popularized by the National Retail Federation.
Every year they put out a report on organized retail crime and almost all of the data about it that you read about in the media comes from those reports. So I read the latest report and Mike, buckle up.
Okay. So they do define organized retail crime, which unfortunately I am going to start calling ORC.
The study defines ORC as the systemic large-scale theft of retail goods from manufacturers, logistics and transportation providers, distributors or retailers, and the subsequent resale of stolen goods for financial gain to wholesalers, retailers or individual consumers, typically for a fraction of the retail cost. I have some comments, but I'll let you go.
I do think that these criminal operations exist. Yeah.
It's the kind of thing that they are presenting as new and novel. But like, yes, any sort of like profitable little crime will have a more sophisticated variant.
Sure. There's also this weird thing of kind of the focus on the resale.
I feel like people have this narrative like, oh, they're stealing things to resell them. But like, that's most stealing.
Right. I mean, people, somebody steals your car stereo.
They're not putting it in their car. When people steal jewelry, they're reselling it.
So like most theft is resold. The fact that it's resold and that people are doing this to resell it and get money isn't like exotic in any way.
Right. And like, I know people online can get like somewhat overboard with the sort of like poor people stealing a loaf of bread.
Right, right. The lame is narrative.
Yeah, I do actually think that like you don't have to like steel man the kind of shoplifting that's going on because like poor people also steal things to resell them them and like because they're poor. Like crimes of poverty do not have to be like I'm stealing food to feed my starving children.
It can be like I'm stealing a car stereo to sell it for 300 bucks to pay my rent. Like that's also a crime of poverty.
The fact that you've resold something doesn't like invalidate the fact that it's partly driven by poverty. And I think increasingly addiction.
I mean, we have a huge like opioid meth everything epidemic in like most cities at this point. Yeah.
Later in the Good Morning America segment, they started talking about fentanyl. And that's when I was like, all right, we've gotten too far afield.
I'm not going to show Mike this part. Touch candy bars.
Don't touch fentanyl. Okay.
I'm going through the report, and one of the first things you'll see is that the gaps in their understanding here are massive. They say, quote, national crime data on ORC does not exist, and most law enforcement authorities do not specifically track ORC as a specific category of crime.
Yes, they did use specific twice in a row in this report. And the report is just sort of like riddled with like mediocre writing in a way that I'm not used to for like an official looking report.
Are you not used to that, Peter, considering this whole podcast? I feel like when you open a big fancy like report that's like 50 pages long in a, you know, professionally graphically designed PDF, you sort of expect a certain level of quality. And this one is on the lower end, to put it that way.
They say that ORC incidents are up, but their only data about the prevalence of it comes from retailers themselves. And there are a couple of very large problems with that data.
First, there's not a clean definition of it to begin with, right? And retailers are each working with their own definitions. So some retailers will consider any group of shoplifters to technically be organized.
And I've seen some indications that some will base it purely on the amount stolen, basically assuming like if you're

stealing X amount, you're reselling it, which they then count as organized retail crime. But there's no consistent standard.
The second problem here is that as organized retail crime has gotten more attention, retailers have invested more in stopping it. So the report shows that increasing percentages of retailers have dedicated ORC teams within their loss prevention departments or whatever.
So, yes, they're finding more instances of it, but that could very easily be because they're now looking for it. Right.
Some of their stats are also just plainly wrong. God, this is a wild one.
They claim that nearly half of all retail shrink is through organized retail crime. Organized, okay.
That jumped out to me because numbers from their own surveys have reported that external theft, including organized retail crime, was about 37% of all shrink. and now they're saying that organized retail crime alone is nearly half so i was like well what the fuck is this right they get it by taking their own estimate of annual retail shrink which you might remember was 94 billion dollars and then they compare it to the testimony of ben dugan.
Ben Dugan is a CVS executive and a retail security guy. He testified to Congress that ORC costs $45 billion a year.
Oh. They then compare that to $94 billion and they're saying nearly half, right? Right.
But here's the thing. Where is Ben Dugan getting that number? Yeah, yeah.
When he gets asked by the Los Angeles Times where they got that number, he said he got it from the National Retail Federation. Nice, nice, nice.
So they're saying their source is Dugan. Dugan says his source is them.
Yeah. Turns out Dugan was using the total shrink number that the National Retail Federation supplied.
Right. Except for some reason, he was using the number from 2015.
In 2015, total shrink was $45 billion. Right.
Now it's $94, right? So if you're following, this CVS executive is basically perjuring himself before Congress in two distinct ways. First, he's attributing all shrink to organized retail crime, which he knows is not true.
Yeah. To attribute it all to shoplifting would be nuts.
But then to attribute it all to organized shoplifting is like double nuts. Right.
Yeah. And then second, he's using the wrong year's data.
Yeah. And I assume he's doing that because he's just been using that same talking point for years and years on end or something along those lines.
Then the National Retail Federation uses his number to say that half of all shrink is organized crime, not realizing that what they're actually doing is just comparing their own total shrink number from 2015 to their total shrink number from 2021. A whirlwind Ouroboros.
Yeah. Absolute bullshit.
Mike, this is the kind of circular thing that would cause like a computer program to like blow up your laptop. I also feel like there's a thing where journalists are reluctant to like conclude things.
It's not it's not like this is a coincidence or like some sort of honest mistake. Like, it very clear that the retailers and the cops are like trying to put out a narrative.
So Ben Dugan, aside from being a CVS executive, works for another trade association called the Coalition of Law Enforcement and Retail. Right.
And that just goes to show how tightly these organizations are operating with fucking cops.

Right. It actually is cops at the top of like these, you know, large corporation security divisions.
It's just like former cops. Right.
Right. It's not uncommon that these retail organizations are just like making these blatant misrepresentations.
A couple of years ago, the head of the California Retailers

Association said that businesses in San Francisco and Oakland alone lose $3.6 billion annually to

organized retail crime. The Los Angeles Times was looking at this and they pointed out that would be

25% of all sales in San Francisco and Oakland. So no.
No. No.
Journalists should be looking at this as if like the Westboro Baptist Church is like, there are teachers molesting kids everywhere. Like you wouldn't just report that.
You'd be like, well, these people are obviously fucking full of shit. We're going to wait until there's actual evidence of this, right? Yeah.
And the Westboro Baptist Church has never lied to Congress. You would want people to, like, conclude something from this.
Right. And be like, look, maybe this is happening, maybe it's not.
But, like, there's huge bad faith actors at the very center of this. And they need to come with actual facts to us before we're going to believe them.
And until they do, the story is the retail lobby is trying to push a narrative for which

there's no evidence.

We're partway through the most serious report in the business about organized retail crime,

and it is nonsense.

Yeah.

In the report, they say, quote, the lack of quality data has stymied efforts to raise

public awareness about the scale and consequences of ORC. No, it hasn't.
Well, first of all, that's one way of putting it, right? Yeah. Like,

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like, like, like, Well, first of all, that's one way of putting it, right? Yeah. Like the lack of quality data is why you don't know the scale or consequences of organized retail crime.
They're literally just working backwards from their conclusion that this is all really happening. And it hasn't stopped you from- The fucking opposite is true.
Right, exactly. Yeah, it hasn't stopped you from doing a moral panic about it.
Like literally the opposite is true. You you're winning they're winning because of these fucking surveillance videos like i swear that's it yeah for the next portion i'm going to send you the entire report don't worry um you don't have to read it unless you in full unless you want to i love reading pds it's always a risk sending you the full report because now i know in two days time you're going to just get bored and read it and then text me something that like I missed that I should have included in this episode.

OK, the funniest part of this report is not the awful data. It's when they scour social media for evidence of organized retail crime.
Yes. At one point they say, quote, as of November 2022, a sub community on Reddit contained discussions about retail theft, best practices, retailer loss prevention strategies, and tips on the circumvention of anti-theft technologies.
Fuck yes. And then they cite to the subreddit r slash illegal life pro tips.
Which does sound like it was set up by the FBI, honestly. So, okay, go to page 18.
Oh my God, they're literally listing fucking Reddit posts. It's literally just screenshots of posts from Reddit, dude.
Oh my fucking God. It says these screenshots from the popular social media website Reddit indicate thieves are aware of retailer security practices.
Although posts such as these are generally aimed at amateur shoplifters, org booster operations also benefit from the availability of this information. So they're even acknowledging that it's just like, it's just random people.
They're literally being like, look, look, this is, uh, this is screenshots of the posts of seven teenagers. But professionals might benefit from the insight that these teenagers are spreading on the Internet.
Again, this is the most like this is like the number one report. Like this is this is the best they have.
That's just the same as the videos. It's like we now have the technology to do this.
But 20 years ago, shoplifters also would have been sharing like this store is easy, this store is hard, whatever. Right.
But cops were too old to know how to go on message boards 20 years ago. OK, go to page 29 of the PDF.
29. Oh, this one says orc likely to expand in scale, comma, sophistication.
That's right. Oh, yeah.
It's always, this is another moral panic thing. It's always just around the corner that, like, there's going to be evidence for it soon, we swear.
Right, right, right. So if you look at the top right of this page is a screenshot from Tumblr.
Oh, fuck off. Fuck off.
A user on Tumblr. It even says it.
Oh, yeah. Can you read that? a user on tumblr presented justifications for retail theft based on anti-capitalist views and arguments that theft does not cause financial harm to large retailers got them 4k they're admitting it some someone on tumblr says shoplifting is against capitalism and then and and below that, there's a screenshot from a search on TikTok for like shoplifting tips.
Tips for borrow from stores. Dude, the Tumblr guy says that $6 pair of shades they stuffed in their bra from Old Navy.
No one's going to miss it. Dude.
Damn. It's a fucking screenshot of a Tumblr post.
It's a screenshot of Tumblr. Behind this is just like a child.
Yeah, yeah, yeah, yeah, yeah, yeah. Like a kid, a kid who's stealing like $140 worth of shit from Abercrombie or whatever.
You can tell they're just so desperate to gin up evidence for this. Like if I was writing a report about like the problem of school shootings in America, I would have like dates and times of actual school shootings, right? Like actual problems in America.
You don't resort to this thing of like people think it's good online. Look, this is the industry's big serious report, right? Everything you've ever heard or read about organized retail crime originates with this organization and they are screenshotting Tumblr.
This is I love how you keep coming back to this. This is a lobbyist led effort to drive public attention to retail crime.
Right. The evidence that there's like a huge surge in organized retail crime.
It's just not there. Like they have a whole report that doesn't show it.
Right. Yet they are telling the media that it's a fact.
I love that doing this show is bringing you to the same level of radicalization as me, where it's like, Mike, your journalism is like so robust. And you're like, I read the PDF.
Right. I didn't do anything.
All I fucking did was read like the basic primary documents. I had a lot more respect for your researching skills before I started doing this.
And I was like, yes, you are good, but it's not that hard. Literally just reading.
Scroll down to page 33 of the PDF. 33.
Further research needed on effects of higher felony thresholds and bail reform on larceny crime rates. Okay, so we need to research whether like all the shoplifters know that there's like a woke

prosecutor now.

We can just like do crimes.

So this is the end game, right?

They are telling the media that this is happening.

They send out press releases.

They push it to retailers.

They lie about it to Congress.

And this is why. Yeah, they're looking for public investment in their private security.
And that means literal money, but it also means opposition to progressive criminal justice reforms. What they're saying is, hey, the bulk of the research shows that bail reform and higher felony thresholds don't increase theft.
But that research was conducted before the pandemic. So we need more research.
Okay, yeah. So keep looking at it till we get the result we want.
Envision research that agreed with me. Now it's now the picture is not so clear, is it? Also, shoplifting is way down in like a 30 year time span.
I mean, the numbers are always garbage. But it's like, if you look at 90s, it was way higher.
So were criminal penalties lower than property crime since has been falling since the 80s as a general rule. And yes, you can look at the last several years and it starts you start to see spikes in various different types of crime.
I mentioned vehicle thefts. They're up.
They're like demonstrably up over the last several years.

And the data on that is relatively reliable because people report their car stolen. But

we're working from a very low baseline, right? Numbers that are historically very low. And even

after the spikes, a lot of these figures are still lower than what the rates were in the mid-aughts,

for example. I want to be clear that this has been like an incredibly fruitful lobbying effort.
Nine states have implemented laws targeting organized retail crime. More than a dozen states have created task forces.
There is now a proposed federal law being considered that would make it way easier to bring federal theft charges against shoplifters. Of course.
This is the culmination of a very extensive lobbying effort. And all of this media coverage, these bullshit reports, the goal is to drive government resources toward a retailer security.
And it's working. It's working extremely well.
Yeah. Yeah.
And the whole like myth of organization, we've seen this over and over again. Like me and Sarah did an episode on street gangs for You're Wrong About, which was genuinely like very radicalizing to me.
We saw the same kinds of messaging around gangs in the 1990s. Like they're about to come to the suburbs.
It's like so bad. And you look into it and it's like three teenagers, you know, these international criminal syndicates, that stuff never materialized.
And the purpose of this myth of organization is to distract ordinary people from like the obvious drivers of petty crime, which is mostly poverty and other sort of larger structural factors that we can do something about. You see this rhetoric starting to show up, right, of like repeat offenders and like longer prison sentences, higher bails, et cetera.
And it's like, this is the stuff that drove mass incarceration in the 1990s. We're just doing it again.
And like, we're basically getting a resurgence of like three strikes type of rhetoric. The thing that always like strikes me about this is like countries with much less petty crime than America, is that because they have larger prison populations than we do? And like harsher punishments for low level misdemeanors? If locking people up worked, we wouldn't have shoplifting in this country.
Right. People vastly underestimate how aggressively prosecutions proceed in the United States.
People think that like these guys are getting like picked up for shoplifting and then just waltzing out of the jail and like spitting in the cop's face and being like, I do what I want. No, a lot of people are just getting fucking buried under the jail for minor offenses, right? The sort of media narrative always revolves around this like general abstract permissiveness that we are not brutal enough.
You know, you look at that Good Morning America segment. What are they actually doing there? Like, what is it accomplishing? It is fostering a sense of fear that creates a permission structure for law enforcement to do whatever the fuck they want with criminals right right one of the last things i want to mention is i heard the good morning america segment and i was like the terrorism thing threw me right yeah come on man i was i did a little control F for terrorists and terrorism because I was like, whoa, is this in here somewhere?

Osama.

Publicly available information regarding the involvement of traditional transnational organized crime groups, such as those involved in drug trafficking, weapons smuggling, trafficking in persons, cybercrime or corruption networks, or transnationalnational terrorist organizations in ORC is speculative and lacks specificity.

Long pause.

Oh!

It is plausible some of these groups may have some involvement in ORC given their operational

sophistication and the potentially lucrative income stream ORC offers, according to a federal law enforcement investigator and an investigative journalist.

Like, who? They don't even fucking cite it.

Who?

They don't even cite it.

Oh, my God. It's Matt Taibbi.

It's Matt Taibbi.

So there is so much rank speculation in these sorts of reports

that just gets laundered onto fucking good morning America.

Like your mom is watching that at 7 a.m.