Q&A – Florida’s New Porch Pirate Law & How Much More We Pay Because of Them
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Today’s Entry: @brianmuddradio Glad to see the new porch pirate law. How much more do we end up paying because of theft?
Bottom Line: When some people hear the term “shrinkage” they think of George Constanza. When I hear the term shrinkage, I first think of sitting in on my dad’s conference calls as a kid...and then I think of George Constanza. In retail shrinkage is one of the most important terms and statistics that exist. It’s when a company loses inventory from causes other than sales. The difference of even one or two percent can literally make or break a business. The shrinkage rate can also contribute to breaking our wallets. Just as in reality, businesses don’t pay taxes, consumers of businesses pay taxes, as the costs of taxes are factored into what consumers are charged for goods and services, the same is true for shrinkage. When items are stolen, or fraud and/or incompetence occurs, businesses pass along the costs of those losses to consumers in the form of higher prices...or if they can’t because of market competitiveness over prices – they risk going out of business.
My father’s corporate career was in retail which is why I think of my dad’s conference calls when the topic of shrinkage comes up. As a young kid I was interested in learning business and my dad was a great teacher. My favorite lessons were real world lessons. Over the years my father had worked his way up the retail corporate ladder a bit and was responsible for regional operations for a major retailer. He’d hold weekly conference calls in which all stores in the region would report to him their operating results for the prior week. There were two trends he was always looking for... Rising sales and declining shrink. Any reasonably run company that can regularly accomplish those two things will be successful. But of the two numbers he was most concerned with it was actually the rate shrink, not sales. If there’s a brief dip in sales, that can potentially be addressed in several ways. If there’s a rise in shrink, that in his experience, was a sign of a much bigger problem – one had to be identified and addressed immediately. As a society what hasn’t happened is public policy to adequately address the rising shrink situation in recent years. As a result, all non-thieves are paying for it.
The rate of shrinkage has risen in retail every year since 2020, rising by a total of 33% during that time to record high levels. But it’s not just the rate of what’s mostly theft that’s grown exponentially, it’s the size and the impact of the thefts as well. The dollar amount of stolen goods has risen by 47%. Shrinkage losses by retailers rose by greater than 19% just last year.
Most recently approximately 2% of everything a retail business sells is stolen in some form or fashion. On the surface, 2% may not sound like much. In reality it’s huge. Retail businesses operate with some of the slimmest profit margins of any industry. The average profit margin in retail is... 3%. That means with shrink rates nearly as high as profit margins typically are there’s only one thing for businesses to do and that’s to raise prices. We’re currently paying an average of about 3.6% more for consumer staples than we would be without the rise in shrinkage. Some, including President Biden, have tried to blame what he’s called “shrinkflation”, or companies selling smaller quantities of goods for the same price, as the key for lingering retail inflation. In reality, it’s shrinkage that’s the driving force. Every time someone steals merchandise it has an impact on what all other consumers pay for those products. And that takes us to the new law signed by Governor DeSantis yesterday. The Theft bill does the following as explained through the official summary analysis:
In recent years, some retail merchants have experienced an increase in “smash-and-grab” theft, a form of organized retail crime where a group of offenders enter a retail store, overwhelm the merchant’s employees, and steal merchandise. Such offenders have even utilized social media to coordinate this illegal group activity. The bill amends s. 812.015, F.S., to:
- Prohibit a person from acting in concert with five or more other persons within one or more establishments for the purpose of overwhelming the response of a merchant, merchant's employee, or law enforcement officer in order to carry out the offense or avoid detection or apprehension for the offense, punishable as a third degree felony; if the offender solicits the participation of another person in the offense through the use of a social media platform, he or she commits an offense punishable as a second degree felony.
- Enhance the criminal penalty to a first degree felony for specified violations of retail theft, when committed by a person who has two or more prior specified retail theft convictions or who possesses a firearm during the commission of a specified retail theft offense.
In recent years, the rise of e-commerce has led to an increase in “porch piracy”, a crime that occurs when a person or group of persons steal a package or other mail parcel from the owner’s porch or other area near the owner’s home before he or she has the opportunity to retrieve the package. Nearly eight in ten Americans have reported falling victim to such package theft in 2022, totaling an estimated 260 million packages worth $19.5 billion. At least eight states have specifically made package theft a felony
Section s. 810.02, F.S., prohibits a person from committing burglary by:
- Entering a dwelling, structure, or conveyance with the intent to commit an offense therein – unless the premises are at the time open to the public or the person’s entry is licensed or invited; or
- Remaining in a dwelling, structure, or conveyance: Surreptitiously, with the intent to commit an offense therein; After permission to remain is withdrawn, with the intent to commit an offense therein; or To commit or attempt to commit a forcible felony.
A burglary is a felony offense classified according to the offense’s specific circumstances, as follows:
- A burglary or attempted burglary of an unoccupied structure or conveyance is a third degree felony.
- A burglary of a dwelling, an occupied structure or conveyance, or an authorized emergency vehicle is a second degree felony.
- A burglary is a first degree felony when an offender: Commits an assault or a battery; Becomes armed with explosives or a dangerous weapon within the premises he or she is burglarizing; Enters a dwelling or structure and: Causes damage to a dwelling or structure
This new law takes effect October 1st and applies the toughest penalties in the country for burglary and theft. The law is specifically tailored to target organized crime operations and repeat offenders. This law should help stem the tide considerably within Florida for one of two reasons. Steering would-be career criminals out of Florida and/or by longer prison sentences for offenders reducing recidivism rates. Aside from that... It should help cut down on the dreaded porch piracy and has the potential to meaningfully cut down on shrinkage (this side of George Constanza that is).