NRF Welcomes Organized Retail Crime Bill
Washington D.C. The National Retail Federation (NRF) and the Food Marketing Institute welcomed Tuesday’s introduction of legislation that would make organized retail crime a federal offense. The bill is an attempt to stop this growing problem that costs retailers and consumers as much as $30 billion a year, and threatens public safety through the sale of tainted goods.
Organized retail crime rings typically target consumer products that are in high demand, such as infant formula, razor blades, batteries, analgesics, cosmetics and gift cards, as well as DVDs, CDs, video games, designer clothing and electronics. Stolen goods are often resold at pawnshops, flea markets, swap meets and on the Internet—a growing source to move fenced merchandise.
Besides forcing retailers to increase prices to cover the losses, these thefts threaten public health when crime rings tamper with consumable items’ expiration dates, packaging or labels.
Rep. Brad Ellsworth, D-Ind., and co-sponsor Rep. Jim Jordan, R-Ohio, introduced the Organized Retail Crime Act of 2008 to fight these thefts. The bill defines organized retail crime as “the acquiring of retail merchandise by illegal means for the purpose of reselling the items.” And it makes such activity, including transportation, sale or receipt of stolen retail goods, a federal crime.
The bill has thorough provisions. For example, sale of stolen or counterfeit gift cards, or items with fake Universal Product Codes or Radio Frequency Identification (RFID) chips would be considered fraud.
It also claims that operation of online marketplaces, such as auction sites, can be considered “facilitation” of organized retail crime unless the operator can show that specific steps had been taken to ensure that goods being sold were not obtained by theft or fraud. Online marketplace operators could also be sued by any business whose stolen goods were sold.
Those found guilty of committing or facilitating organized retail crimes would be subject to appropriate existing fines, prison terms and forfeiture, and the legislation would require the U.S. Sentencing Commission to review its guidelines for cases involving such crimes.
Currently, retailers lose between $15 and $30 billion to organized retail crime each year, compared to the $18 billion in losses linked to robbery, larceny, burglary and auto theft, according to the FBI Uniform Crime Report. In addition, 85% of retailers reported that they were victims of organized retail crime in the past year, according to the NRF.