Retailers blame some fraud on easy resale online

Officials are asking lawmakers to look into organized crime efforts.

LANSING — The Michigan Retailers Association wants to hold online marketplaces accountable in an effort to combat the sale of stolen goods.

One of its top priorities this year is convincing the Legislature to update the state law on organized retail crime.

“There are some people in the profession that say that eBay is the world’s largest fencing operation,” said Robert Hanson, head of the criminal justice department at Northern Michigan University.

“The individual theft is a serious problem in and of itself, but when they become organized, then it really multiplies the damage they can do to a company or to a series of companies. It’s because it takes very little money to organize it, and there’s very little risk,” Hanson said.

William Hallan, president of the retailers group, said that while no legislation has been introduced, the goal is to require the operator of an online marketplace to delist an item if it’s determined to be stolen, and to create a system to report fraudulent items and verify that they were stolen.

“We want to make sure consumers are protected and that consumers are buying goods that aren’t dangerous,” Hallan said.

It would have the benefit of protecting retailers as well, he said. “It won’t be as lucrative to steal property from retailers if it’s not so easy to sell that on the secondary market.”

The National Retail Foundation’s 2019 study of organized retail crime found that the surveyed businesses lost $703,320 on average for every $1 billion in annual sales. One-quarter reported a significant increase in organized retail crime at their companies, while 43% reported a slight increase in the previous 12 months.

The top items stolen by organized retail criminals: designer clothing, 25%; infant formula, 16%; and razors, 16%.

A number of reasons are blamed for the rise in incidents, including no-receipt return policies that enable criminals to return stolen goods and get a gift card that can then be sold online. Advancements in technology also make it easier to organize the theft and sale of stolen goods, according to Media Sonar Technologies, based in London, Ontario.

“The folks that are engaged in organized retail crime — they are not your opportunistic teenager that they’re stealing a shirt because it’s cool with their friends,” Hallan said. “What these people are doing, it’s a professional enterprise and it is often tied into other forms of criminal activity.”

Last November in Mecosta County, deputy sheriffs investigating a case of retail fraud arrested three suspects on separate charges after finding meth in a residence along with $1,000 worth of stolen goods.

Current Michigan law makes it a crime to receive, buy or possess retail merchandise for sale knowing or believing it was stolen from a retailer. It carries a maximum penalty of five years in prison and a $5,000 fine.

The Michigan Organized Retail Crime Advisory Board met last month at the State Police headquarters.

The board has representatives from the Retailers Association, county prosecutors, local police agencies and the public. It discusses organized retail crime and actions that might reduce it.

 

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