The Retired Investor: The Cost of Retail Theft in America

The facts are that retail theft is a drag on the U.S. economy. Organized retail theft, smash-and-grab robberies, carjacking, and cargo pilferage are just some of the crimes committed hour by hour throughout the country. Estimates of costs vary but are well above $100 billion per year.

 

There is no definitive source that calculates the actual dollar cost of stealing, but several organizations such as the U.S. Chamber of Commerce and the National Retail Federation have provided guesstimates. The Chamber believes organized retail crime has cost the economy more than $125.7 billion. But there are add-on costs such as $39.2 billion in lost wages, 685,374 in job losses and $14.9 billion in lost federal, state, and local taxes.

 

We have all watched as images of criminals invading retail stores pop up on the evening news. In some cases, a dozen or more brazen criminals overwhelm local businesses carrying off tens of thousands of dollars' worth of merchandise while leaving a path of smashed glass, broken counters, and bruised customers. What we fail to realize is that these criminal acts are part of a highly organized effort conducted by anonymous professional crime players. 

 

Organized retail theft, according to most definitions, is the coordinated theft of merchandise by individuals and groups with the intent to resell these goods by passing them off as legitimate goods to unsuspecting buyers, typically online. The overall masterminds behind these crimes know and exploit local laws. They make sure to steal less than the dollar-amount threshold considered to be felony theft in most jurisdictions.

 

These bosses recruit and employ gangs of individuals to commit numerous thefts, making sure that total stolen remains below that felony threshold. And these are not victimless crimes. Consumers, employees, communities and business owners are caught in the crossfire of these crimes where eight out of 10 retailers report increased incidents of aggression and violence.

 

Car theft is also on the increase across the nation. The price tag for this form of theft totals around $25 billion. More than one million cars were stolen in 2022. This year that number is expected to increase yet again. For carjackers, hot wiring is passe and keyless theft is all the rage. Given the rising prices of both new and used cars, thanks to inflation and supply chain issues, thieves have a super-charged incentive to boost cars.

 

The number of stolen vehicles varies by where you live. Car thefts in 30 major cities have a 59 percent increase between 2019 and last year.

 

California tops the list of states with the most stolen vehicles followed by Texas, Washington, Florida, Colorado, Illinois, Ohio, Missouri, New York, and Georgia (in that order). Vermont has the distinction of least number of cars stolen to date.

 

Some of the more popular models to steal include the Chevrolet Silverado, Kia Soul, Hyundai Elantra, Subaru Legacy, and the Subaru Forester. Other brands include the Honda Civic, Honda Accord, and the Toyota Camry.

 

Next week, I will examine the fastest growing segment of theft in the U.S. — cargo theft. I will also examine what can be done to stop this epidemic of thievery. The answer is at best complex and as usual chock full of politics.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.