For small businesses, there's no easy way to fight smash-and-grab robberies

While the recent spate of smash-and-grab robberies has targeted retailers of all sizes, the relative impact on small businesses is substantial. Even a minor robbery can lead to a significant portion of their inventory being stolen, prompting some owners to reconsider whether to even reopen.

“I don’t want to continue. It’s very difficult to make a living right now,” said one business owner, who chose to conceal the identity of herself and her store for fear of reprisal. “I feel terrible. My husband wants to reopen, but I’m tired.”

Her store was robbed of hundreds of thousands of dollars worth of inventory. She’s scared that if she reopens, it may happen again amid increased reports of smash-and-grab incidents in cities across the country.

“It’s not a coincidence that these steps are taking place now. [They’re] trying to get their hands on as much product as they can, specifically during a supply chain crisis,” said Ben Dugan, president of the National Coalition of Law Enforcement and Retail. “Organized retail crime runs the gamut across all retailers...anything with a high resale value is really sought after.”

While current strains on the supply chain and the upcoming holiday season may be contributing to some extent, these types of robberies aren’t new. They happen frequently and have ties to organized crime.

According to the National Retail Federation’s 2020 report on the issue, organized retail crime resulted in an average loss of $719,548 per $1 billion in sales last year. That’s up from $703,320 in 2019, marking the fifth year in a row the figure has surpassed $700,000. In 2015, that number was just over $450,000.

That report noted that three of the top ten cities for organized retail crime are in California: Los Angeles ranks first, San Francisco ranks fifth and Sacramento ranks tenth. In the last week alone, about two dozen arrests were made across California, according to law enforcement officials.

But the real number of incidents may be higher, because it’s unclear how many go unreported. Officials say there are quite a few businesses that wait to contact law enforcement until well after the incident — if at all.

For businesses looking to prevent or recover from such incidents, there are two main options: hiring security and filing an insurance claim. But both can be problematic and inadequate solutions for small businesses, since they’re often prohibitively expensive.

“A lot of small businesses have been contacting us, but they just can’t afford having a guard there,” said Andrew Dimian, CFO of Omni private security services. “About 90 percent of the businesses that ask can’t afford it.”

For those that can, the security is often temporary.

“We try not to do any long-term commitments because they probably won’t be able to keep us. The average duration for small businesses is a couple weeks,” Dimian said. “For a small business it might be one guard, paid $20-23 an hour, for a 12-hour day. Charging a couple hundred dollars extra on their expense is too much.”

Business insurance can provide protections for the premises and property in the event of loss, damage or theft. It can also protect against losses caused by a business interruption and cover the costs to repair broken windows.

But, the owner, who chose to be unnamed, knows all too well that it’s not just a matter of having coverage. It needs to be the right insurance coverage.

“They say they won’t cover it because it’s not during business hours and I only have daytime insurance, not nighttime,” she told NBC News.

She said that because of language barriers, she didn’t realize that the coverage she requested was not the coverage she received. Thus, the initial reassurance she received from thinking insurance would cover her losses was unfounded.

Given the high cost of coverage, it's not uncommon for small businesses to have inadequate protection, according to Loretta Worters, vice president of media relations for the Insurance Information Institute.

“The impact to these businesses depends on whether or not they have business insurance," Worters said. "Insurance professionals know all too well that if a business is underinsured and a loss occurs, it may be impossible to keep the doors open."