Is the online marketplace model to blame for the shoplifting spike?
Much of the public discussion about the wave of violent smash-and-grab shoplifting raids in major cities has centered around keeping shoplifters out of stores. Yet much of the pilfered product is sold online via Facebook Marketplace, Amazon, eBay, OfferUp and other marketplaces.
According to a recent USA Today’s Talking Tech podcast, suggestions for consumers to avoid contributing to the problem include avoiding third-party marketplaces, looking up seller information and going direct-to-brand.
On Dec. 9, twenty major retail CEOs, in conjunction with the Retail Industry Leaders Association (RILA), sent Congress a letter in support of the INFORM Consumers Act, which would help verify the identity of high volume, third-party sellers to reduce online sales of counterfeit and stolen goods.
The bill, originally introduced in the Senate in March 2020, would require marketplace sellers to use their real name, verifiable contact information and tax ID numbers. In October 2021, an updated INFORM Consumers Act was introduced in the House of Representatives that reduced some transparency requirements for sellers, including the need for driver’s licenses for ID verification and the display of sellers’ information alongside product listings.
Retailers signing the letter to Congress, including Nordstrom, Best Buy, Target, CVS and Foot Locker, were some of the hardest hit by recent mob theft.
“There is no simple answer to stopping organized retail crime or the sale of counterfeits — but key to stemming the tide of these growing problems is transparency,” the letter stated. “If a customer buys a product from a local retail storefront or ecommerce site and it is broken or otherwise defective, the consumer knows exactly who to contact. There is accountability. In the current environment, criminal networks and unscrupulous businesses have exploited a system that protects their anonymity to sell unsafe, stolen, or counterfeit products with little legal recourse.”
Amazon, Etsy and eBay in recent months have all come out in favor of the House version of the Inform Consumers Act, though Amazon critics, politicians and other backers of the bill said in November that the e-tail juggernaut was working behind the scenes to water down the bill, according to Politico.
- Online marketplaces and retail theft: Talking Tech podcast – USA Today
- How online markets may be contributing to organized retail crime – NPR
- S.3431 – INFORM Consumers Act – Congress.gov
- New INFORM Consumers Act Bill Introduced – eBay Main Street
- CEOs Call on Congress to Address Surge of Retail Crime – RILA
- Schakowsky Introduces Bill to Protect Consumers Making Online Purchases – Jan Schakowsky
- Amazon supports the U.S. House version of the INFORM Act – Amazon
- Inside the drama over INFORM Consumers – Politico
DISCUSSION QUESTIONS: How big of a role are e-commerce marketplaces playing in incentivizing mass shoplifting? Will legislation requiring heightened transparency for third-party marketplace sellers help curtail mass retail theft or are significant steps elsewhere required?