The nasty rise of ‘flash mob robbers’

Market Watch – by Catey Hill

In just 90 seconds, they’d made off with over $10,000 in cosmetics.

Groups known as “flash-mob robbers” storm a store, steal thousands in merchandise in minutes and bolt as quickly as they arrive. Among the most notorious are the Rainbow Girls — a group of female thieves, named for their brightly hued hair — who’ve hit dozens of stores in the Bay Area. Their high-stakes heists have included Ulta ULTA, +1.21% where the beauty burglars stole an estimated $11,000 worth of goods in less than two minutes. The mostly girl gang has also walked off with a combined more than $130,000 worth of luxury goods from Ferragamo, Louis Vuitton LVMUY, -2.57% Christian Dior and Sunglass Hut LUX, -0.37% , according to charges filed against a dozen members of the Rainbow Girls in the Bay Area in October.   

Often in groups of up to 15 people, the bandits burst into a store, make a beeline to the lucrative goodies and quickly pillage the shelves. (High-end jeans and cosmetics are favorite items, experts say.) Sometimes even before the store employees or security realizes what is happening, the mob has dispersed, goods in tow. “The longest I saw it take them was two minutes,” says San Francisco police officer Carlos Manfredi, who has been working to arrest the robbers and their copycats. Depending on the target, each shoplifter can pocket more than a dozen items each. Manfredi estimates the Rainbow Girls have stolen more than a million dollars in merchandise over the years.

Across the country in Massachusetts, law enforcement officers are battling a similar problem. In September, a hoodie-clad gang of men mobbed an Apple AAPL, -0.93% store in Hingham, stealing 22 phones in minutes; one month later in Natick, a similar-looking crew made off with $13,000 of phones in under a minute. Incidents have also happened in a 7-Eleven 3382, +0.94%  in Kansas City with a mob of 50 and a Diesel store in Washington D.C., with more than 20 people.

The rise of flash-mob robbers over the past seven years is one of the most “significant, emerging trends in retail,” says Ernie Deyle, a retail industry consultant and co-author of the Checkpoint Systems’ Retail Holiday Season Global Forecast. “These events have become more in vogue and popular via ‘viral-spread,’” he says, referring to how quickly surveillance videos of the heists are shared across social media.

Sometimes these robberies happen spontaneously, other times, they’re organized by criminals. The robbers “can get $40,000 in under two minutes…it’s like a dance routine, it’s very coordinated,” says Robert Moraca, the vice president of loss prevention at the National Retail Federation. Sometimes the thieves sell the goods — iPhones, for example, get two to three times their value when sold internationally, he says. Other times, they exchange the goods for gift cards, then sell those gift cards for cash. The benefit of working in a group is if one gets caught, others in the mob still walk away with plenty of stolen merchandise.

Not only can flash mob robberies cost retailers millions, says Manfredi, they also hurt consumers, who ultimately get charged higher prices for goods to make up for these kinds of losses, says Moraca. A survey from Checkpoint Systems found that shrink — the industry term used to describe a company’s lost inventory due in part to losses from shoplifting, theft and internal fraud — will cost the average consumer $50, just within this holiday season, though of course, only a small part of this is due to flash mob robberies.

To combat this, stores are investing in better security cameras and training specific to these incidents, experts say. Moraca notes that some stores even have advanced security systems that alert staff to unusual foot traffic patterns before an actual heist is in progress. Still, businesses are in a bind: many retailers still have fewer staff than before the recession, and the word of these incidents spreads quickly. The Rainbow Girls, for example, now have lots of copycats, says Manfredi: “They tell their friends, ‘it’s so easy.’”

http://www.marketwatch.com/story/the-nasty-rise-of-flash-mob-robbers-2016-11-23