Shoplifting is more than a spur-of-the-moment crime, it's a criminal enterprise with cash rewards and scores of people are doing it because it's low risk, making recruitment easy.
Today in Volusia and Flagler counties, entire criminal networks are being funded by the spoils from shoplifting.
There is big money in stealing from big box stores. At the lowest level the "boosters" or in-store thieves are usually drug abusers getting their fix while the organizers of the theft rings, in some cases pawn shop owners, are getting rich, experts have said.
Retailers are losing tens of billions of dollars per year from widespread shoplifting and they are passing down those losses to their customers, according to industry research. Meanwhile, law enforcement agencies are either too overwhelmed to take on the epidemic or still in the dark about how serious the problem is, said retired detective Scott Frantz, who for years headed the organized retail crime unit at the Daytona Beach Police Department.
Solutions aren't being pursued with the appropriate urgency. That's because the problem, Frantz said, is so monumental.
"The tentacles from this go out in every direction," he said. "It's just incredible."
Volusia and Flagler law enforcement agencies saw a steady increase in retail theft calls from 2010 to 2016. That six-year span saw annual totals jump from 2,837 to 4,184, according to data collected by The News-Journal.
Capt. Brian Henderson, commander of investigations at the Volusia County Sheriff's Office, also thinks the problem has been overlooked for too long.
"I don't think there's an easy answer to fixing this," he said. "Criminals have been exploiting these big retailers."
The driving force behind the problem, according to law enforcement, is the opioid epidemic.
"Ninety-nine percent of this is tied to drugs," Frantz said.
Those who steal have addictions to satisfy. Store employees who catch them in the act are under strict orders not to intervene or else they lose their jobs. Law enforcement, meanwhile, usually doesn't show up quickly enough. Even those who wind up getting caught don't face significant punishment.
"Penalties are low if you do get caught, but there is a good chance you won't get caught," Frantz said.
'Shrink' keeps growing
Shoplifting is big business for criminals and it is a scourge for retailers. In 2016, the U.S. retail economy suffered $48.9 billion in losses as a result of retail theft, according to the National Retail Federation.
The lingo retailers use for losses due to shoplifting is "shrink." It keeps increasing year after year even while retailers allocate fewer and fewer resources to loss prevention, studies show. The average shrink rate for retailers in 2016 was 1.44 percent. Nearly one out of every four retailers had shrink rates of 2 percent or greater. Those numbers keep ratcheting upward, according to the federation's study.
The same study revealed that 65 percent of retailers either reduced their loss-prevention budgets from the previous year or declined to raise them.
The modus operandi for thieves and their handlers is simple: steal one or more items from a major retailer and then go back to the store, or to another location, and return the merchandise. Because it is a non-receipted return, instead of receiving cash, the thief is handed a store credit, which comes in the form of a card. The thieves go to pawn dealers or second-hand dealers to sell the card. Oftentimes those cards are sold to the dealers in bulk. The dealers, meanwhile, sell the gift cards to national exchanges, which sell the cards to online shoppers. It's an endless cycle of supply and demand.
"You have regular people who go in and steal," Volusia County Sheriff Mike Chitwood said. "They get cash for their drug problem and the top dog gets the lion's share."
Retailers shrinking away?
Retailers don't like to talk about shrink. The News-Journal sent questions to 12 major retailers that have locations throughout Volusia and Flagler counties. Only a few responded. None would disclose how much money it loses each year to shrink nor would it discuss its loss-prevention strategies in any great detail.
Casey Staheli, a spokesman for Wal-Mart, said the retail chain keeps an eye on return fraud.
"We have policies and procedures in place to identify abusers of our return policies," he said.
"We're always evaluating shopping patterns as well as shrink patterns ... and we're responding in a manner that's appropriate."
The retailer that was the most forthcoming was home improvement supplies giant The Home Depot.
"Return fraud is something we don't mind talking about because it is a problem that all retailers are facing," said Matt Harrigan, a Home Depot spokesman.
Harrigan said his company has put policies into place aimed to thwart the sale of store credits.
The Atlanta-based home-improvement supply chain doesn't issue garden-variety gift cards. Instead, they issue store credits to non-receipted returns. The credits are issued through cards, but they are distinguishable from gift cards and they can only be used for in-store purchases. Proof of identification is needed each time one is used and the cards are not transferable, Hanigan said.
There have been instances where Home Depot has initiated calls to law enforcement to report thefts whenever there are indications of a presence of a criminal enterprise.
That happened most recently in May when the Volusia County Sheriff's Office arrested seven people, including a South Daytona pawn shop owner, on suspicion of stealing $1 million in power drills from local Home Depot stores and selling them on eBay.
Chitwood said the ringleader, Richard Hill, had two teams of "boosters" who stole the drills from the stores, brought them to Hill who then sold them online.
Hill, who was charged with racketeering and dealing in stolen property, has been out on bail since shortly after his arrest. He told The News-Journal on Friday that he wouldn't talk about his open case because his attorney advised him not to, but he still maintains his innocence.
In that case, Chitwood praised Home Depot for its assistance.
In December 2016, Home Depot endured a very public backlash. The Palm Coast store fired four of its employees after they tried to catch a suspected shoplifter in the act. The suspect attempted to walk out of the store with $1,000 worth of tools, but a cashier refused to let him leave without a receipt. The other employees intervened when it appeared the suspect was trying to ram the cashier with a shopping cart. In the end, the suspect was arrested, but the employees wound up getting fired for violating store policy.
"Pursuing shoplifters in the store or in the parking lot is extremely dangerous and risks the safety of everyone, which is why we only allow trained security personnel to do so," a Home Depot spokesman said at the time.
The story made national news and the chain came under fire for terminating the employment of those who were performing a civic duty, according to critics who posted their grievances on social media.
Frantz said the Home Depot firings were a sign of the times.
"(Thieves) just keep walking when they hear someone call out to them to stop," he said. "They know no one's going to lay a hand on them. (Retailers) are so liability-conscious right now. The attitude is like, 'Hey, it's more fiscally responsible to take the loss.'"
Those losses are passed down to the customer.
"That's why we have to pay $10 for a light bulb," Henderson said.
Very few busts
The largest local gift card fraud sting took place in December 2015.
Dale Chester Holcombe and his son, James Dale Holcombe, were the accused ringleaders of a million-dollar criminal enterprise run out of their storefront. The sting resulted in a total of 21 arrests. Florida Attorney General Pam Bondi made an appearance at the media conference.
Thirty-one months later, father and son are still awaiting trial.
The investigation took nine months — it was dubbed Operation Plastic Paradise — and detectives said the Holcombes earned about $2 million from the gift card ring. They said they had bank records to prove it.
Then-sheriff Ben Johnson said at the time that the Holcombes bought the cards at half price, so it was estimated that the theft ring resulted in $4 million in property losses. The retailers that were affected included Wal-Mart, Target, Lowes, Toys "R" Us and Publix, authorities said.
Since that high-profile sting, no other major arrests have been made.
The criminals who do it are not stopping, Frantz said.
Meanwhile, police agencies aren't staffing enough investigators to take on the epidemic.
Frantz left Daytona Beach police a few years ago. Since then, the organized retail crime unit has fallen by the wayside, he said. He was one of 37 detectives and he was the only one assigned to retail theft. His caseload was the largest by far, he said.
Daytona Beach police spokeswoman Lyda Longa said two detectives are dedicated to working shoplifting cases.
Either way, Frantz said all agencies need to dedicate more resources to organized retail theft or else it will continue to get worse.
"It's a job that has an enormous workload," Frantz said. "For a chief or a sheriff ... they have other issues to deal with that are sexier. The public is pressuring them to do other things. This is way down the priority list."
Henderson, who was actively involved in the December 2015 sting, said he doesn't have nearly enough people dedicated to the problem.
"If I had the resources for it, I'd hire a sergeant and five detectives," he said. "We could literally work racketeering cases around the clock."
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