Organized retail theft leads to higher prices in the long run
Sep 27, 2023, 5:15 PM | Updated: 6:13 pm
(Photo by Scott Olson/Getty Images)
Retail theft is a booming criminal business and Target is far from the only company that’s being hit.
This week, Target announced it would be closing nine stores in several major cities, including two in Seattle. The retailer said theft and organized retail crime threaten the safety of its workers and customers.
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Herb Weisbaum, contributing editor at Checkbook, said this type of crime affects you even if you never encounter a shoplifter.
“It hurts legitimate retailers, legitimate businesses, and we, the customer, wind up paying for it in the long run in the former of higher prices,” Weisbaum said.
He stated retail theft is also why people are seeing more items at their local stores kept under lock and key.
Retailers and law enforcement claimed retail theft is being driven by large, organized crime rings that have found a lucrative place to sell their pilfered products.
“When criminals steal stuff from a store or create counterfeit merchandise, they have to sell it somewhere,” Weisbaum said. “That used to be on a street corner but now, thanks to the internet, they can sell it on online marketplaces and make a lot of money doing this.”
He said the Prosecutors Alliance of California estimates more than $500 billion in stolen and counterfeit products are sold online worldwide annually.
The federal government is trying to crack down by passing new rules for those online marketplaces, including Amazon and eBay.
“Under the INFORM Consumer Act all online marketplaces are required to collect and verify very specific personal and financial information from most high-volume third-party vendors that sell new consumer products on their site,” Weisbaum said, adding, “if they don’t do this they face a penalty of $50,000 per violation. This statute really has teeth in it.”
The reasoning behind the law is that someone who is selling large amounts of laundry detergent or baby formula legally can produce the appropriate documents. Someone who’s operating a retail theft or counterfeit operation likely can’t.
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Weisbaum stressed the INFORM Consumers Act, which took effect over the summer, is not targeting a relative who’s downsizing and selling collected goods. It’s going after people who are selling high volumes of new products.
But Weisbaum said consumers also need to be careful when they shop online.
“If you see one person who’s supposedly moving and is trying to sell 12 pairs of Nike shoes and they’re all brand new and in the box and all have the price tags, well, that may make you think, ‘I wonder if these are stolen?'” Weisbaum said.