Imagine you’re a retailer with a major theft problem of a product at one of your stores (probably not hard to do). You start to poke around and discover the product is not only disappearing from one store, but it’s going missing across an entire region. You analyze theft data from store locations and by times of day. You study incident reports and other relevant information. Before long, your investigation points to a troubling realization—an organized ring of thieves is hitting your stores and your dollar losses are mounting. What now?
Identifying the bad guys is perhaps the easiest part of the process for loss prevention departments and retailers—successful civil recovery is typically more elusive. In one recent study citing liability, administrative burden, and the potential for bad publicity, several retailers admitted they don’t bother with recovery. Even some involved in civil recovery said they perceive limitations. “It’s not worth it,” said one retailer flatly (Retail Loss Prevention in Perspective, Gill, PCRI, 2016).But you’ve got a million-dollar case on your hands and you want your money back. You’ve got to do something.
Less experienced loss prevention departments may not know where to start, others are just learning to deal with organized retail crime (ORC), and others handle cases in any number of unique ways. But since recovery tends not to be a core competency, all retailers face significant obstacles to success.
It’s common for even the most competent loss prevention departments to lack skill in navigating the intricacies of the judicial system, and to lack confidence in knowing to which agency they should direct their case. They may be unsure who to engage to undertake related work, and they often lack the time and manpower to follow up on judgments. And while a retailer’s legal department may be masterful at negotiating leases, it is often not as comfortable working criminal cases, and may lack an understanding of the range of powerful legal tools that can be used to pursue civil recovery.
Whether you will be successful in recouping losses in your million-dollar ORC case depends on a complex series of interrelated activities. One of the first is to assess whether your investigation is sufficiently complete to pitch the case to an agency, according to William Ramos, director of ORC recovery, a new service from The Zellman Group, a leader in civil recovery and loss prevention investigations. “We look to see if they have any missing information, fill in the blanks, and work with clients to put a complete case together,” he said.
A critical aspect of information gathering in this initial stage is to obtain details on the assets of persons of interest—before arrests are made. As a vetted authorized user of Thomson Reuter’s CLEAR, an invaluable yet costly intelligence tool, Ramos says they’re able to identify co-conspirators and get a clear picture of what recovery might be possible. This benefits a retailer in future restitution negotiations because it demonstrates upfront that the retailer is fully aware of the money that is available to be recouped—and that it intends to go after it. “It puts the retailer in a better position when they take the case to law enforcement and beyond,” said Ramos.
Also paramount to successful recovery is a retailer’s ability to navigate the complex legal environment that surrounds ORC cases. The ORC recovery service assists with documentation for presentation to law enforcement, prosecutors, and courts, and helps guide retailers to select the most effective path forward, such as whether to pursue the case on a local, state, or federal level, or whether to pursue civil litigation. The program also frees loss prevention departments to get back to conducting investigations rather than having to track cases and enforce court orders.
One essential document for successful civil recovery is a victim impact statement, according to Stuart Levine, President and CEO of The Zellman Group. “It’s a tool to make sure the retailer’s interests are represented as the case moves forward, so that judges are aware that they need to make the retail victim whole again,” he said. “We identify at the outset that the real victim in the case is our client and that we want our money back.”
An overlooked piece of a recovery effort—but perhaps one of the most important of all—are relationships. Although law enforcement and judicial system connections aren’t typically an important part of ordinary civil recovery cases, they are vital in cases of organized retail theft, according to Levine. Just about every case will come up against a brick wall—or several of them—and having experienced people that can break them down is vital, adds Lauren Bridgeo, vice president of operations at The Zellman Group. ORC recovery has a big hitter on its team in the form of John Shanks, Zellman’s manager of law enforcement relations. With 30 years of experience in civilian and military law enforcement, Shanks has forged relationships with a variety of stakeholders that prove priceless in ORC recovery cases.
As the above discussion suggests, successful civil recovery requires overcoming obstacles and jumping through hoops. However, there are some encouraging signs for retailers. The 27th Annual Retail Theft Survey by Jack L. Hayes International, of large retailers showed that they recovered 7.5 percent more from shoplifters in 2014 than the year before. And that retailers now have for the first time a service to help them manage ORC cases—ORC recovery—suggests that the retail industry no longer needs to cede the proceeds from seizures to law enforcement agencies and provides retail victims a much-needed voice in the recovery process.