Retail Theft Has Gotten Very Organized

Sixty-nine percent of respondents to the National Retail Federation’s 2021 survey on retail security said that “organized retail crime” had increased over the past year. Sixty-five percent said that such operations — in which people conspire to steal merchandise in large quantities for resale — had become more aggressive and violent.

Organized retail crime can be dangerous to shoppers and store employees as well as financially damaging to retailers, particularly smaller ones. In addition, it causes stores to raise prices, which harms customers.

Fortunately, there is a solution, and it doesn’t involve turning stores into fortresses or security guards into combatants. The solution is to remove the profit motive by shutting down the resale of stolen goods over the internet. If criminals know they can’t sell the stuff they steal, they won’t steal it in the first place.

Congress is moving in the right direction. On Nov. 17, the House Energy and Commerce Committee approved and sent to the full House a bill that would require online marketplaces to verify the identities of high-volume third-party sellers. “Third party” refers to sellers other than the platform itself. “High volume” is defined as at least 200 sales over the past 12 months with a total value of $5,000 or more.

The bill, which is called the INFORM Consumers Act, is sponsored by Representatives Janice Schakowsky, Democrat of Illinois, and Gus Bilirakis, Republican of Florida. By forcing organized retail criminals to verify who they are, the bill would discourage them from selling and thus exposing themselves to prosecution.

The Schakowsky-Bilirakis bill has earned support from groups including the Coalition to Protect America’s Small Sellers (which includes eBay and Etsy) that had opposed an earlier version of the INFORM Consumers Act sponsored by Senators Dick Durbin, Democrat of Illinois, and Bill Cassidy, Republican of Louisiana. Both versions of the act included verification requirements. But the Schakowsky-Bilirakis bill exempts sellers doing less than $20,000 a year in revenue from having to disclose their identities to customers, whereas the Durbin-Cassidy bill had a disclosure threshold of $5,000 (the same as the threshold for verifying their identity to the platform).

The Schakowsky-Bilirakis bill also gives sellers who do have to disclose their identity the option of doing so only after a sale, whereas the Durbin-Cassidy version didn’t have an option of post-sale disclosure. Durbin and Cassidy have now adopted the House version.

When it comes to third-party sellers, the 800-pound gorilla is Amazon, whose net sales are running at a rate of more than $400 billion a year. The company says that slightly more than half of the items sold on its platform are sold by third parties, not Amazon itself. The Buy Safe America Coalition, which represents retailers and manufacturers, charges that Amazon “has had an alarming history of failing to address counterfeits and stolen products.”

In April, Amazon opposed the Durbin-Cassidy version of the INFORM Consumers Act, claiming that it “favors large brick-and-mortar retailers at the expense of small businesses that sell online, while doing nothing to prevent fraud and abuse or hold bad actors accountable.” In October, though, Amazon supported the Schakowsky-Bilirakis bill, which would pre-empt a patchwork of state laws that are in the works, only saying that “there are a few areas in the bill that could be refined to further minimize burdens on honest sellers.” In a statement for this article, K. Dane Snowden, president of the Internet Association, a trade group that includes Amazon, wrote that “the real motivation” of big brick-and-mortar retailers “has never been protecting or deterring retail theft, but rather stifling competition from small sellers.”

In a congressional hearing last year, Representative Lucy McBath, Democrat of Georgia, seemed to catch Amazon’s founder, Jeff Bezos, off guard by asking him if stolen goods were being sold on Amazon. “Congresswoman, not to my knowledge,” he said, before immediately adding, “although, you know, there are more than a million sellers, so I’m sure there have been stolen goods sold on Amazon.” When McBath asked him how Amazon verifies that information provided by sellers is accurate, he said, “I don’t know the answer to your question.”

Bezos undersold what Amazon is doing. An Amazon representative told me this week that the company spent $700 million in the past year and employed more than 10,000 people to prevent fraud and abuse by sellers and that a “vast majority” of those sellers have had their identities verified in person or via a video call.

I interviewed Stuart Green, a professor at Rutgers Law School in Newark, about the effort in Congress to stamp out organized retail crime by going after complicit resellers — or “fences,” as they’re known. He was all in favor. “It’s a classic cycle where the ability to sell a stolen good creates demand for more stolen goods and gives incentives to the thieves,” he said. “If the thieves don’t have an outlet for the stolen goods, they don’t have any incentive to steal the goods.”

Green said that even though online platforms are working to root out crime, they continue to benefit, however unintentionally, from sales of stolen goods. “To me,” he said, “that’s a classic case of a market failure.”

Green said that it wasn’t until 1962, with the promulgation of the Modern Penal Code by the American Law Institute, that states began to enact laws treating receipt of stolen goods as seriously as the theft itself. The logic, he said, was that “by creating a market for stolen goods, you’re encouraging thieves to steal in the first place.”

Is that entirely fair, though? Someone who receives stolen goods may not know they were stolen. The same goes for platforms on which stolen goods are sold, as Bezos told McBath. The question then becomes how hard you need to try to find out where the goods you’re selling came from. “How much diligence should be required?” Green asks. “That is an important question.”


The wheels on the bus don’t go ’round and ’round if there’s no one behind the wheel. The number of school bus drivers in the United States is down 13 percent from 2019, according to an analysis of payroll data released this week by the ADP Research Institute. More than half of school bus drivers are 55 and older, but their ranks are down only 5 percent. The biggest decline in the ranks of drivers — 30 percent — was among those aged 25 to 34.

Nela Richardson, the institute’s chief economist, writes: “These drivers could be switching jobs to pursue more rewarding opportunities, given the relatively low pay of school bus drivers when compared to national averages. In a world where more people are ordering online, workers with a commercial driver’s license have more options than they did before the pandemic.”

Quote of the day

“Mo money mo problems.”

— The Notorious B.I.G. (1997)

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