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Resale of stolen goods from retailers now a federal crime in the US

National Retail Federation (NRF) : 16 July, 2008  (Technical Article)
Retailers are celebrating a victory in the criminalisation of thefts for resale from retail premises in effort to combat $30 billion per year losses
The National Retail Federation has welcomed the introduction of legislation that would make organised retail crime a federal offence in an attempt to stop a growing problem that costs retailers and consumers as much as $30 billion a year and threatens public safety through the sale of tainted goods.

“The introduction of this bill shows that Congress realises organized retail crime is more than just shoplifting,” NRF Vice President for Loss Prevention Joseph LaRocca said. “Organised retail crime is a large and growing national issue with dollar losses bigger than robbery, larceny, burglary and auto theft combined. It also threatens public health and safety when thieves tamper with items like baby food or over-the-counter medications before offering them for sale. This legislation will make organised retail crime part of our federal criminal statutes, and give law enforcement officers and prosecutors the tools they need to put these criminals behind bars.”

“A significant portion of this bill deals with on-line fencing of stolen goods,” LaRocca said. “On-line auctions and other markets on the Internet provide a Wild West environment where thieves can re-sell stolen property to customers on a national or even international level with virtually no questions asked. Requiring Internet marketplaces to live up to their responsibility to block the sale of obviously stolen merchandise is not unreasonable. We’ve seen from this week’s ruling on the sale of counterfeit goods that current laws are not adequate to police these sites. It’s time for Congress to bring on-line crime under control.”

H.R. 6491, the Organised Retail Crime Act of 2008 was introduced by Representative Brad Ellsworth, D-Ind, with Representative Jim Jordan, R-Ohio, as the lead co-sponsor.

The bill would define organised retail crime as “the acquiring of retail merchandise by illegal means for the purpose of reselling the items” and make such activity – including transportation, sale or receipt of stolen retail goods, – a federal crime. Among other provisions, sale of stolen or counterfeit gift cards, or items with faked Universal Product Codes or Radio Frequency Identification chips would be considered fraud. Those found guilty of committing or facilitating organised retail crimes would be subject to appropriate existing fines, prison terms and forfeiture, and the legislation would require the US Sentencing Commission to review its guidelines for cases involving such crimes.
The bill would also establish that operation of on-line marketplaces such as auction sites can be considered “facilitation” of organised 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. Site operators would be required to “expeditiously” investigate complaints that stolen items are being sold, maintain records of the names and physical addresses of high-volume sellers, and require high-volume sellers to either post that information along with merchandise offerings or make it available upon request to any business with a reasonable suspicion about the merchandise. Operators of on-line marketplaces could also be sued by any business whose stolen goods were sold.

Retailers lose between $15 and $30 billion to organized retail crime each year, according to the FBI and retail loss prevention experts. The figure compares to the $18 billion for robbery, larceny, burglary and auto theft combined reported by the FBI Uniform Crime Report. In addition, a record 85 percent of retailers reported that they were victims of organized retail crime in the past year, according to NRF’s annual survey on the issue.

Organised retail crime rings typically target everyday consumer products that are in high demand and easy to steal such as infant food, razor blades, batteries, analgesics, cosmetics and gift cards. More expensive products such as DVDs, CDs, video games, designer clothing and electronics are also highly prized. Once stolen, the goods are resold at pawn shops, flea markets, swap meets and the Internet. The thefts force retailers to increase prices to cover the losses, and threaten public health when crime rings tamper with items such as infant formula or medication by extending expiration dates or repackaging and relabelling the items.
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