Retailers Want Online Auction Info to Fight Crime

Discussion
Oct 31, 2007

By George Anderson

Retail theft rings have done a great deal of damage to retail stores and while many steps have been taken by merchants and law enforcement agencies to combat this crime, many believe Congressional action is required to curtail online fencing of stolen goods through legitimate auction sites, such as eBay and others, according to The Washington Times.

“The internet has created a worldwide market for stolen goods in which the sellers are anonymous and there is an enormous universe of buyers who are generally unaware of the nature of the goods sold,” said Brad Brekke, vice president of assets protection at Target.

Tim Hammonds, president and CEO of the Food Marketing Institute (FMI), estimates that retailers lose up to $30 billion a year to organized theft rings. He said consumers who ultimately buy stolen items may face health risks.

“They (retail theft rings) endanger public health by adulterating products such as infant formula and cold medicines and selling them to unsuspecting consumers often through illegitimate retail outlets,” Mr. Hammonds said.

Last week, retailers appearing before the House Judiciary Committee’s subcommittee on crime, terrorism and homeland security painted a picture of increasing criminal activity.

According to FMI’s numbers, 60 percent of retailers report that organized retail theft has become more of a problem this year.

Retailers are looking for Congress to require online auction sites to share information on high-volume sellers to determine if they are engaged in illegal activity. The retailers are also looking for Congress to make organized retail theft a federal felony. Many contend that when thieves that are part of a ring are caught, they receive little more than a slap on the wrist based on local shoplifting laws.

The largest online auctioneer, eBay, defended its practices and sees little reason for Congressional action.

“When any retailer has concrete evidence to the effect that stolen property is on our site, we will work with them and law enforcement to address the problem, including sharing information about a targeted seller with the appropriate enforcement agency,” Robert Chesnut, senior vice president of rules, trust and safety at eBay, told The Washington Times.

Discussion Questions: Is Congressional action needed that would compel online auction sites to reveal information about high-volume sellers? Is there a need to create a felony offense for those involved in organized retail theft? Are there other solutions that you believe would work as well or better than those discussed before the House Judiciary Committee last week?

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8 Comments on "Retailers Want Online Auction Info to Fight Crime"


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Odonna Mathews
Guest
Odonna Mathews
14 years 6 months ago

Congressional action may not make a significant difference here. Retailers and online companies who suspect illegal activity need to report it.

Eliott Olson
Guest
Eliott Olson
14 years 6 months ago

Believing that small merchant has 500 Victoria Secret bras for sale because his wife bought too many is the real suspension of disbelief. Criminal behavior can be pattern-matched and it is no more of an infringement of basic rights to require proof of purchase than requiring a receipt with a return or having title registrations on automobiles. One would think that some RetailWire readers prefer to buy their Rolexes in parking lots….

David Biernbaum
Guest
14 years 6 months ago

The creation of a felony offense for those involved in organized retail theft rings probably would help to discourage a certain per cent of participants, but otherwise I’m not too sure that congress has the answers. I would not really want to see more and more regulation on online auctions because government involvement predictably will eventually get out of hand. Let’s enforce the laws we have or add teeth to those that cannot stand on their own, but otherwise let’s not give politicians a new toy to play with.

Tony Orlando
Guest
14 years 6 months ago

Ditto! We need to protect the nation’s interests first. Let the retailers stop crying wolf, because once it leaves the store, it’s impossible to track it….

Eliott Olson
Guest
Eliott Olson
14 years 6 months ago

Terrorists finance their operations with cigarette smuggling and shoplifting. If I want to bring more than $10,000 into or out of the country I have to declare it. A bank also has to report large cash deposits. A small enterprise selling large quantities of name brand goods should be flagged and required to post proof of purchase with the auction house. That ought to be the law.

George Anderson
Guest
George Anderson
14 years 6 months ago

Let retailers get some type of evidence a vendor on eBay or other auction site is selling stolen goods and then let law enforcement get a warrant based on probable cause. Asking merchants to turn over information on high-volume sellers based on nothing more than suspicion sounds like an infringement of basic rights.

Ryan Mathews
Guest
14 years 6 months ago
First of all, did I wake up in a different country? In the America I know Congressional action is an oxymoron! Secondly, I share David’s concerns; once the door to Internet regulation is cracked, (any more than it already has been,) we’ll find ourselves on a slippery slope to federal intervention of content, spying, etc., etc. I’m not sure how FMI arrived at such concrete numbers about a problem that, at best, still lives in the shadows, but let’s suspend disbelief for a moment and assume they’re spot on. Is it a significant problem? Of course! Does it have the real potential to threaten lives and health? Without doubt! Is the answer more government? I find it difficult to believe. The current Consumer Products Safety Council employs one–that’s right one–individual to inspect the billions of dollars of toys that enter the U.S. every year. That’s why little Billy and Susie are teething on lead. Is this the same government we want to trust to stop fraudulent auctions? I can just see that poor toy inspector… Read more »
Mark Lilien
Guest
14 years 6 months ago

Organized crime doesn’t need eBay to sell their inventory. Organized crime can sell stolen goods to bricks and mortar stores. If eBay merchants are required to prove legit provenance of their inventory, why shouldn’t every bricks and mortar store?

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