Congress must address organized retail crime at Big Tech hearing

As the nation navigates the new normal, retailers continue to safely serve our communities across the country. But retailers are confronting an economy that has undergone major shifts during the course of the pandemic, as consumers continue to buy items online in record numbers. This dramatic spike in online shopping makes brick-and-mortar stores even more vulnerable to a problem that has been growing for over a decade: organized retail crime.

Organized retail crime refers to criminal networks that steal merchandise in mass quantities from storefronts and sell those goods online. Retailers have long reported costly problems with organized retail crime, and the Department of Homeland Security recently warned that third-party online marketplaces are facilitating the trafficking of pirated goods. But this year, in the midst of the pandemic, leading retailers say that these networks are becoming even more aggressive, which is consistent with past surges in retail theft during times of economic contractions.

To protect the safety of associates working in retail stores and ensure that consumers shopping online are not at risk of buying stolen or counterfeit products, Congress must intervene. And they should focus on eliminating the ability of criminals to hide behind anonymous selling accounts on online marketplace platforms.

Critical progress was made last week with the introduction of the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act by Representative Jan Schakowsky. Originally introduced in March by Senators Bill Cassidy and Dick Durbin, the INFORM Consumers Act would mandate online marketplaces to verify the identity of high-volume third-party sellers by obtaining their government ID, tax ID, bank account information and contact information.

Big Tech marketplaces, including Amazon, remain fiercely opposed to strong verification and accountability laws that would empower consumers and law enforcement with information and make it harder for unscrupulous sellers and criminals to profit from these illicit transactions.

Reports show that organized retail crime is increasingly pervasive on Amazon. In 2019, a theft ring was busted in Washington state for selling millions of dollars’ worth of stolen goods on Amazon’s platform over a six-year period. In March, it was reported that more than two-dozen people had been charged with being involved in a crime ring that targeted major retail stores from 2014 to 2019 and sold stolen wares on Amazon.

The dubious claim that scale makes solving this problem too difficult, too complicated or too burdensome is unfounded. Big Tech marketplace platforms employ some of the most sophisticated data scientists and logistics professionals in the world, and it is clear that the knowhow exists to identify and crack down on these illegitimate sales.

Let’s face the facts. The real reason for turning a blind eye to this problem undoubtedly lies with the increasing volume of these transactions and the commissions and fees earned every time a stolen, counterfeit or unsafe item is sold on one of these platforms.

Big Tech marketplace platforms have their place in an increasingly diverse and digital economy, connecting legitimate sellers — often small businesses — to a large and growing pool of online shoppers. But their growth should not be a golden ticket for criminal rings targeting legitimate businesses and innocent consumers.

An important next step and show of good faith would be for Big Tech to join leading retailers in supporting the INFORM Consumers Act. Lawmakers should seize the opportunity to ask Amazon CEO Jeff Bezos about his company’s role in solving the organized retail crime problem when he appears before the House Judiciary Subcommittee this week.

The last few months have been a difficult time for all Americans. For our part, retailers and their employees have done everything possible to ensure families have had access to everything they have needed to keep their families secure.

Collectively we have invested billions in training, safety and sanitization measures to safeguard our employees, customers and the communities that have counted on us. But this crisis has also underscored problems that require other industries to step up and do their part. In this case, Big Tech needs to step up to the plate.

—Brian Dodge is the president of the Retail Industry Leaders Association.