- Leaders of several large retailers sent a letter to Congress to ask it to address organized retail crime.
- Criminal retail rings have cost companies like Target, CVS Health, and Home Depot billions of dollars a year in stolen merchandise.
- The letter cites “lack of transparency” in third-party marketplaces as a main factor enabling the criminal retail activity.
Leaders in the
retail industry
are fed-up with organized retail crime’s impact on their businesses, and they’re asking Congress to take action.
Twenty CEOs at major retailers sent a letter addressed to Congressional leadership on Thursday, asking lawmakers to pass legislation to help curb illegal business activity by anonymous vendors online.
Retailers say they have seen an uptick in organized criminal activity over the past months, including through brazen smash and grab thefts, and many stolen brick-and-mortar products being resold on online marketplace platforms. The retail industry has lost billions in the past year from the reselling of these “hot” items, according to the FBI and a 2020 survey from the National Retail Federation.
Signatories include the CEOs of Target, CVS Health, Rite Aid, Home Depot, Dollar General, AutoZone, Kroger Co., Petco, Ulta Beauty, Nordstrom, Best Buy, as well as the president of the Retail Industry Leaders Association.
In the letter, the business leaders point to the “anonymity of the Internet” and the “failure of certain marketplaces” to verify their sellers as causes for the criminal retail practices.
“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,” the letter reads. “This lack of transparency on particular third-party marketplaces has allowed criminal activity to fester.”
The CEOs want Congress to support a bipartisan bill that would force online marketplaces to authenticate “high-volume third-party sellers.”
The bill, called the Integrity Notification and Fairness in Online Retail Marketplaces (INFORM) for Consumers Act, would make it harder for bad sellers to hide behind fake screen names and false business information when fencing illicit products, the letter said.
However, some groups, like the Makers and Merchants Coalition, a trade group representing third-party online sellers, have spoken out against the INFORM Act, saying the act helps eliminate competition from big-box retailers, a spokesperson for the coalition previously told Insider.
The retail leaders do not explicitly name third-party marketplace platforms in the letter, but multiple ecommerce sites have pushed back on claims that they don’t do enough to monitor illegal activity on their platforms.
Amazon introduced a live video and physical address verification method last year, allowing the company to verify sellers’ identities with their government-issued IDs, the company told Insider. The company also said it came out in support for the INFORM for Consumers Act in October.
“Amazon does not allow third-party sellers to list stolen goods in our store, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making law enforcement referrals,” an Amazon spokesperson said in a statement to Insider. “We regularly request invoices, purchase orders, or other proofs of sourcing when we have concerns about how a seller may have obtained particular products that they want to sell.”
Facebook Marketplace prohibits the sale of stolen items in accordance to their Commerce Policies. The platform responds to valid legal requests and may also share information with law enforcement, in line with its terms, and regulators in cases where it may prevent fraud or other types of illegal activity, a Meta spokesperson told Insider.
Insider also reached out to eBay for comment, but the online commerce platform has not yet responded.