Nine states pass laws to crack down on theft

This is the final part of a three-part series on organized retail crime. The stories examine the claims retailers make about how theft is impacting their business and the actions companies and policymakers are taking in response to the issue. Read the first story here and the second here.

When Walmart’s CEO, Doug McMillon, was asked what will happen if shoplifters aren’t aggressively prosecuted, he warned it would have a massive impact on consumers.

“If that’s not corrected over time, prices will be higher, and/or stores will close,” the top executive of the country’s largest retailer said during a December interview with CNBC. 

The retail industry is the nation’s largest private sector employer, and it contributes $3.9 trillion to the country’s annual gross domestic product, according to the National Retail Federation. Shutting down a store as large as Walmart can deprive communities of both jobs and a place to buy everyday goods – and lawmakers are paying attention. 

Since 2022, at least nine states – six so far this year – have passed laws to impose harsher penalties for organized retail crime offenses. Similar bills are pending before legislatures across the country and in the U.S. Senate. 

Behind the sweep of legislation are retailers and trade associations, which are using their collective power to get the bills written and past the finish line. They have also seized on a moment when lawmakers in many parts of the country, and from both sides of the aisle, see a political benefit from appearing tough on crime.

The new and proposed laws aim to deter brazen retail crime and go after the so-called kingpins who lead organized theft groups. But critics say the measures may not actually reduce organized retail crime, and could disproportionately harm marginalized groups. 

“The organized interest groups, whether they’re business or organized labor or the NGO sector, have an insane amount of influence on our politics, and much of the policy agenda of these organizations is not driven by careful consideration of policy outcomes and whether they’re good for [the public],” said Adrian Hemond, CEO of political consulting firm Grassroots Midwest. “It’s focused on what’s good for the organization.”

The legislative efforts come as more retailers blame rising crime for higher inventory losses, also known as shrink. But they have not shared data that proves how much it is costing them, nor are they required to do so. Experts told CNBC some companies could be overstating theft’s impact on their profits to deflect from internal flaws. More references to retail crime could soon come as a string of major retailers gear up to report…