In the summer of 2022, police got a tip from Shoppers Drug Mart. Security at the pharmacy chain had spotted a pattern in a string of shoplifting incidents at suburban stores outside Toronto.
According to police, Shoppers reported that a group of thieves was repeatedly going into stores and picking out expensive items, like electric toothbrushes, vitamins and breast pumps. They scanned the items through a self-checkout kiosk so none of the staff got suspicious but didn’t actually complete the transaction, they just walked out with the merchandise.
Sgt. Rob Felske, who leads the Halton Police retail theft unit, said his team started looking into the tip and discovered the Shoppers thieves weren’t run-of-the-mill shoplifters. They were part of a larger criminal organization, with foot soldiers and middle managers and a top executive operating out of a warehouse in Brampton. Police allege the group was responsible for the theft of millions of dollars worth of products from big-box stores around the Greater Toronto Area, and they were selling the stolen goods through online marketplaces such as Amazon.
Such crime rings aren’t new to police. Felske said the group wasn’t the only major organized crime ring targeting retailers in the area — it wasn’t even the biggest.
Retailers are reporting a rise in what they call “organized retail crime.” The term sounds like it’s referring to a pack of teenagers filling their pockets at a corner store, not a complex network of professional criminals. But police say organized retail crime rings are real, and worse than you think.
“The organized crime groups have found that this is a way to make money,” Felske said, “and it’s easy to make money.”
Retailers have tried to thwart organized crime with new equipment and tactics at store exits, but those attempts can end up backfiring. Most recently, Loblaw — Canada’s largest retailer and the owner of Shoppers Drug Mart — tested receipt scanners at four grocery stores in Ontario, where shoppers using self-checkouts had to scan a receipt to open a gate and leave the store.
The move sparked a public backlash, with customers complaining they felt Loblaw was treating them like criminals. Resentment against Canada’s big grocers has been bubbling for years, after heightened inflation drove up food prices while Canada’s top grocery chains increased profits. For many, it seemed out of line for the grocers to start cracking down on theft in the middle of an affordability crisis.
But police and retail lobbyists say the crackdown has little to do with regular, cash-strapped people slipping a few items into their bag without paying for them at the self-checkout. ”(Retailers) don’t even call us for those,” Felske said.
Instead, retail lobbyists say the industry’s efforts are focused on a wave of organized criminals across North America that could be costing big-box chains and small businesses billions of dollars a year.
“These are sophisticated organizations,” Loblaw chief financial officer Richard Dufresne said during a quarterly update in November, adding that the thefts are becoming more violent. During that update, Dufresne said a “surge” in thefts dented Loblaw’s profit margin late last year.
Last fall, Toronto Police said organized retail crime has become a lucrative industry in Canada, and warned that consumers would feel the impact through higher prices, as retailers pass on the losses. In the U.S., the problem has gotten to the point that major retailers have been pushing Congress to pass a new law to curb organized retail crime.
It’s difficult to fully capture the size and scope of the problem, since police-reported crime statistics don’t tend to distinguish between thefts carried out by common shoplifters and those carried out by organized crime rings. Retail lobbyists have faced scrutiny over their claims about the size of the problem in the U.S. Late last year, the National Retail Federation walked back its claim that organized crime was responsible for half of the $94.5 billion (U.S.) in merchandise that went missing in the U.S. in 2021. An expert told the New York Times that organized criminals were more likely responsible for five per cent of retail losses. The Times also noted that police-reported instances of shoplifting have declined in most major American cities since 2019.
But retail advocates say stores tend to under-report theft, so the impact of organized retail crime is better illustrated by the ballooning size and value of the thefts, and the violence involved, not necessarily the number of incidents.
In Canada, the Retail Council of Canada lobby group said some retailers reported that violent thefts in their stores rose by 300 per cent in 2023 compared with 2021, according to a survey of 10 retailers which represent a cross-section of the industry. The survey also found theft instances rose by about 30 per cent over the same time period.
“We see more and more (thieves) producing weapons,” said Rui Rodrigues, a veteran retail executive who has worked on loss prevention at major chains, including Staples and Best Buy, and currently serves as executive adviser to the Retail Council.
The rise in violence has pushed retailers into experimenting with controversial equipment at store exits, rather than relying on staff to put themselves in dangerous situations to stop thieves, Rodrigues said.
At the Halton Police retail theft unit, Sgt. Felske said crime rings often enlist people with alcohol and drug addictions, who will steal products from stores and sell them to a middleman, known as a fence, typically for 10 or 20 cents on the dollar.
“They’re just, they’re desperate people,” he said. “They have knives. They have needles. They will use them because at the end of the day, if you’re desperate enough and your mission is to get high again, that’s all you can think about and you’re going to do whatever you need to do to not be sick again.”
A few weeks before Christmas in 2022, months after the tip from Shoppers Drug Mart, Felske’s team traced the thefts back to a suspect who was operating a business called Buynsel out of warehouse in Brampton, according to Halton Police. The ringleader’s associates allegedly delivered stolen goods to the warehouse, where they were sold to unsuspecting customers on platforms like Amazon, usually at a slight discount — but not cheap enough to make shoppers worry the deal was too good to be true, Felske said.
In what Halton police dubbed “Project Kingfisher,” dozens of police officers raided the Brampton warehouse in December 2022. They also raided a series of homes, vehicles and storage lockers around Brampton. Halton Police said the searches recovered more than $3 million in stolen merchandise, along with $700,000 in cash and an estimated $500,000 worth of jewelry. Eleven people are facing charges in connection with the case. The allegations are still before the court, and haven’t been tested.
Felske said the stolen goods filled five police trucks and Halton Police had to rent extra storage space while officers worked to catalogue and return the merchandise to the original owners. It took two officers and a student four months to log and return the stolen goods. Photos provided by police after the raid showed stacks of drill batteries, coffee makers and KitchenAid hand mixers — all apparently brand new, still in the box. Felske said they also found electric razors, pregnancy tests, prenatal vitamins, shoes and thousands of dollars worth of heartworm medication for dogs.
“It was everything you could possibly imagine,” he said.
Amazon didn’t respond to questions about the case, but in a statement, the company said it has “zero tolerance” for stolen goods being sold on its platform and invests $1 billion annually in safeguards to spot organized retail crime. Amazon said its attorneys and investigators have flagged “thousands” of bad actors to police, leading to arrests and product recoveries.
Michael Kempa, a criminologist at the University of Ottawa, said he gets questions about whether these sorts of scams are a symptom of a deeper problem. It’s easy to watch the videos online of smash-and-grab heists and wonder whether the fabric of civilization is starting to fray.
“Are society’s norms breaking down? Is this a sign of an uptick in incivility and so forth?” Kempa said. “I would simply say no.”
The real reason for growing concern about retail theft is more mundane, he said. It’s partly due to shifts in consumer habits during the pandemic. Kempa said the pandemic forced shoppers to get more comfortable buying a wide variety of household goods online. That meant it suddenly became a lot easier and more profitable for organized crime groups to sell stolen goods from drug stores and supermarkets through online marketplaces like Amazon.
“If you were walking down the street and some guy had set up a table and was trying to sell you bottles of ketchup and other random items, you probably wouldn’t buy them because you’d figure they were either stolen or this guy’s nuts,” Kempa said. “But online, you really don’t ask any questions. We’re just used to it. It all looks the same.”
