California Highway Patrol’s Organized Retail Crime Taskforce has recovered more than $41 million worth of stolen goods since the program launched in 2019.
The task force is just one of many that have been launched across the country in the last few months as part of an aggressive crackdown on organized retail crime. The issue has been splashed across social media through videos of flash-mob robberies and multi-million-dollar raids on stolen goods.
The beauty and wellness industries have avoided much of the attention until recently, when a string of multi-million-dollar beauty busts in California put the issue on full display. While firm statistics are scant, the California Highway Patrol told Glossy that beauty, wellness and fashion items rank in the top 10 categories of goods stolen in organized retail crime rings through L.A. County.
According to the National Retail Federation, organized retail crime is defined as “large-scale theft of retail merchandise with the intent to resell the items for financial gain.” It “typically involves a criminal enterprise employing a group of individuals who steal large quantities of merchandise from a number of stores and a fencing operation that converts the stolen goods into cash,” as stated by the company.
In short, the leader of a “fencing operation” never enters a retail store and instead hires often young and disenfranchised individuals, called “boosters” to steal specific items. The items are taken from retail stores or through vulnerable breaks in the supply chain, like from a truck or factory, for immediate cash.
One recent investigation that allegedly follows this organizational structure includes a Los Angeles brick-and-mortar cosmetics business called The Makeup Store. The owner allegedly paid young women to steal cosmetics from Ulta Beauty, CVS, Sephora, Rite Aid, Nordstrom and the 99 Cents Only Store. These items were then allegedly resold in The Makeup Store and to other retailers through an online wholesale business called Yanez Liquidators.
On December 19, the CHP served an arrest warrant for the owner, Brenda Yanez, at The Makeup Store. More than $1 million worth of cosmetics and associated products were recovered, according to the CHP.
In the weeks leading up to the bust, the administrator of The Makeup Store and Yanez Liquidators’ social media accounts posted photos and videos of their wares, which included brands like Rimmel, Covergirl, Clinique, Victoria’s Secret and OPI. Some of the products were still adorned with loss prevention tags from Rite Aid and CVS. Messaging on the site encourages shoppers to get in touch via WhatsApp to purchase bulk boxes of the products.
At the time of this story’s publication, Maybelline Tinted Moisturizer, for example, was available in boxes of 24 assorted shades for $96, or $4 each unit, and Nyx Shine Loud Lip Color in 24 assorted shades was selling for $144, or $6 each. E.l.f. products were also offered, including the brand’s cult Poreless Putty Primer, which has a $10 MSRP but was being offered for $5 per unit or a box of 24 for $120.
On its site, Yanez Liquidators claims it procures its products from shuttering retail stores and warns buyers that dents and dings can be expected from goods once on a retail floor. Google reviews of Yanez Liquidators feature scathing reviews from buyers who allegedly ordered the bulk boxes, only to be disappointed in nearly every part of the transaction. Several reviews claim to have received broken or unexpected products or partial orders, while some reviewers simply never got their shipment.
Certainly flagrant in their dealings, alleged multi-brand fencing operations such as this beg the question of who is responsible, when it comes to forming cases against them.
While the CHP declined to share which brands and retailers hired the private investigators — also referred to as “brand investigators” — that assisted the CHP with its investigation into The Makeup Store and Yanez Liquidators, a representative shared that “loss prevention investigators from various retailers were on-scene to assist in identifying the stolen merchandise” during the December raid.
It’s just one case in a slew of new investigations that put beauty- and fashion-focused fencing operations at the heart of this ongoing issue.
Last month, CNBC released a months-long video investigation into an alleged fencing operation accused of selling items stolen from Sephora, Ulta Beauty, TJ Maxx and Walgreens. CNBC reporters rode along with CHP to a raid on a 4,500-square-foot mansion in San Diego at the center of an alleged growing crime ring to find $8 million worth of allegedly stolen goods.
The group of alleged boosters, called the “California Girls,” are accused of stealing beauty, wellness and fashion goods from stores across the West under the direction of a woman named Michelle Mack, who allegedly resold the goods on Amazon.
In the investigation, Ulta Beauty CEO Dave Kimbell told CNBC that he’s seen organized retail crime get worse. “Retail crime has been part of the retail industry forever and certainly something we’ve been focused on at Ulta Beauty, and as an industry,” he said. “But what we’ve seen the last couple of years is a significant elevation.”
Kimbell went on to share that one factor driving this, among many, is the ease with which stolen products can be resold on marketplace sites.
“We’ve seen an influx in organized retail crime, and we’ve been working to combat that,” California Highway Patrol Officer April Elliott told Glossy. “We’re ramping up our efforts and taking retail crime very seriously.”
But skeptics question whether organized retail crime has increased over the past few years or if it’s simply more visible thanks to social media.
In December, the National Retail Federation retracted a claim that organized retail crime accounted for half of the $94.5 billion in inventory losses reported by retailers in a 2021 survey. It’s currently unclear what percentage of this loss is from coordinated theft and what percent is from everyday shoplifters, who seek to use the goods instead of sell them.
Still, the U.S. Chamber of Commerce reported a 43% increase in mentions of organized retail crime on earnings calls of public companies from January 2023 to August 2023. In the same period, 53% of small businesses reported their theft issue had gotten worse.
It’s one factor that’s driven more businesses to partner with law enforcement or bring on private investigators who are normally former law enforcement officers and now privately offer services to brands and retailers.
“We often work with investigators from brands as our partners,” CHP Officer Elliot told Glossy. “One of the roles of the Organized Retail Crime Task Force is to provide law enforcement’s logistical [support, including] resources, personnel and equipment to brand investigators]. … Most of the time, we get tips or insights from either the stores or these brand investigators.”
So far, the program’s been successful for California, which launched it in 2019. “As of the end of February, we’ve had over 2,400 investigations and over 2,400 arrests [of] organized retail crimes from our task force,” CHP Officer Elliott told Glossy. “We’ve recovered over 763,000 assets with a [total] value of over $41 million.”
Other states have also recently established their own organized retail crime task forces: Florida’s, which is called FORCE, was established in 2021. In September of 2023, the Texas comptroller announced the state’s first dedicated ORC task force, which already has support from the H-E-B grocery chain, eBay and Amazon. Meanwhile, Illinois’s attorney general announced its program in March of 2023, and New York Governor Kathy Hochul rolled out her plan to fight organized retail crime, which has a budget of $45 million, in February of this year.
For retailers that need support with organized crime but aren’t ready to hire an investigator, working groups can help to bridge the gap around education, crime ring tracking and industry support.
For example, retailers like Target, TJ Maxx, Bloomingdale’s, Gucci, Dollar General, Walmart and CVS are members of The Loss Prevention Research Council, which was founded in 2000 by Dr. Read Hayes, a University of Florida research scientist. For a $6,000 annual fee, members have access to emerging technology and data, regular video conferences to discuss findings and best practices, access to experts through meetings and summits, and other collaborative support.
Over the past year, the group has seen a 30% increase in memberships, which now surpass 100. “Over 35 retail corporations in the last 12 months that have come into the community,” Dr. Hayes told Glossy.
He credited the uptick in law enforcement raids to an increase in private investigations carried out by retailers with industry support. “To my understanding, there are more [private investigation] teams conducting more investigations, so that’s gonna lead to more arrests and raids,” he told Glossy. “ORC investigators are trained to work very closely with local state and federal law enforcement agencies to coordinate their efforts to make sure it’s professionally done.”
Officer Elliott confirmed that much of CHP’s leads, and the evidence collection that supports its processes, are provided by the brands and retailers themselves. Evidence includes video footage and credible witnesses collected in the proper way.
Dr. Hayes told Glossy that technology that’s particularly useful today includes RFID tags seamlessly embedded into price tags that can sync with CCTV footage. When the stolen goods are eventually recovered, the tag will be linked to an easily accessible video showing footage of when the tag was removed from a store. This means easier evidence collection by law enforcement.
New GPS-like tracking tags are also being trialed by brands. Dr. Hayes told Glossy a story about working with Florida Law Enforcement to successfully recover a theft simply because one Gucci fragrance taken in the robbery had a tracker. That allowed the store to share corresponding information with law enforcement. If it seems futuristic, it is: Dr. Hayes told Glossy he watched the stolen merchandise soar down the freeway at 127 miles per hour from the screen in his office before law enforcement caught up to the alleged thief and made an arrest.
Other emerging tech to better protect retail stores includes AI-powered CCTV technology. At this stage, it acts as a “heads-up,” Dr. Hayes said. For example, “If there’s a vehicle that’s being used to steal from multiple places, you can enter the vehicle characteristics — not just the tag’s state and number, but the actual vehicle description. That creates an AI model, so that, if that vehicle shows up in an area [with thefts happening], the police can then say, ‘Hey, this vehicle’s been used before’.”
AI-powered technology can also be used to detect online chatter around various crimes before they happen, helping loss prevention teams prepare for organized thefts or violence in stores.
“Early detection and notification is vital,” CHP Officer Elliott told Glossy. “Store security usually knows what’s going on. … When we work together, we can be more successful.”
Update: Michelle Mack, the alleged leader of the $8 million dollar cosmetics crime ring in California, has pled guilty to charges.
