Revolutionary New Technology Helps Food Retailers Identify and Prevent Organized Retail Theft

WASHINGTON, DC — September 25, 2001 — The Food Marketing Institute (FMI), in cooperation with Las Vegas-based Digital Data Development (DDD), announces the introduction of a new anti-fraud technology to analyze and identify the depth and breadth of organized retail theft, or ORT: Non-Obvious Relationship Awareness(NORA).

“Organized retail theft has long been a multi-billion dollar problem for the food retail industry,” said Chuck Miller, vice president of loss prevention services at FMI. “The difficulty in shutting down these rings has been that the individual thefts have been relatively small, and the resulting transactions have been difficult to identify and track – until now. We look forward to a swift rollout of the NORA system to retailers nationwide.”

Miller notes that ORT rings differ substantially from individual stealing. Their operations are centered on professional shoplifters known as “boosters,” who work in highly organized teams stealing low-weight, high-value and easily marketable products such as razor blades, film, baby formula and clothing. The boosters target specific retail establishments and hit them repeatedly in a short amount of time, quickly accumulating substantial merchandise. The stolen merchandise is then stored in large warehouses until it can be sold through dishonest distributors — in some cases back to the very retail establishments from which the merchandise was stolen.

Data collected by the NORA system helps retailers to:

• Identify boosters who share common addresses, phone numbers or identification numbers.

• Identify preferred items targeted by boosters for theft.

• Identify geographic markets and patterns where ORT is occurring.
  

In a trial demonstration of the NORA system, FMI members submitted shoplifting data and other operational information for analysis by DDD and another group, CDO Solutions. Key findings, now under investigation, include:

• Approximately 960 physical addresses were identified where two or more convicted shoplifters committed their crimes across multiple stores on multiple dates.

• The clear presence of a “Fagin” operation targeting GuessTM Jeans. The term is derived from Oliver Twist, the Charles Dicken’s novel in which five minors, under the command of an adult (Fagin), commit daily organized thefts.
  

“We took FMI’s data and developed theft trending models that produced a view of shared criminal facilities – an important first step in fighting ORT,” said Jeff Jonas, president and CEO of DDD. “Additional data from FMI members will further assist us in detecting potential fraudulent relationships between theft rings and dishonest product distributors who prey on legitimate businesses.”

The first phase was deemed so successful that FMI has commissioned a more extensive follow-up study to include many additional data sources that could produce quantitative data to help develop a variety of solutions to ORT problems.

FMI’s Miller added, “In addition to reducing the frequency and losses to ORT, our ultimate goal is to raise awareness of ORT and get manufacturers, retailers and law enforcement officials to help enact legislative changes if and where appropriate. Until more attention is brought to these critical issues, the general public will not understand the immense retail losses caused by ORT.”