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Online marketplaces have created a black market business model for thieves, driving the surge in smash-and-grab robberies that have been on the rise throughout the United States in recent months and years, retail industry leaders told FOX Business.
Ben Dugan, the head of the Coalition of Law Enforcement and Retail, estimates that retail theft is now responsible for $68 billion in annual losses, a number that has gone up during the coronavirus pandemic.
"It really is a growing problem and COVID was kind of the tipping point," Dugan told FOX Business.
"During COVID, everybody is shopping online. So it created this huge new demand, or increase in demand, which is fueling all this additional crime to get that product available for resale online."
20 looters stormed a Nordstrom store in Los Angeles during a smash-and-grab theft. (KTTV)
More than half of retailers nationwide, 57%, said that there has been more organized retail crime since the pandemic began, according to a survey conducted last year by the National Retail Federation.
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The forces that have led to the increase in thefts were put in place about a decade ago, according to Jason Brewer, the executive vice president at Retail Industry Leaders Association.
"The difference between today and 10 years ago is the rise in online marketplaces and the ease of anonymously selling stolen products," Brewer told FOX Business.
"It has put the problem of stolen goods on steroids and it has created, unfortunately, a business model for some criminals to steal and very quickly and anonymously resell stolen products."
The California Attorney General's Office released this photo that shows stolen items from Bay Area retailers, recovered in a warehouse in Concord, Calif., where a search warrant was executed by California law enforcement authorities. (California Atto
The surge in retail theft has prompted some law enforcement agencies to convene task forces and operations targeting the criminals responsible.
California Attorney General Rob Bonta announced last month the arrests and sentencing of five people who stole more than $8 million of merchandise from retailers throughout California.
"The coordinated criminal activity we’ve seen in retail stores and online through the resale of stolen goods isn’t shoplifting or petty crime, it’s organized crime, and it’s going to take an organized strategy to put a stop to it," Bonta said last month.
23, 2021: A security guard patrols the front entrance of Nordstrom as shoppers enter after an organized group of thieves attempted a smash-and-grab robbery late Monday night at The Grove location November 23, 20201 in Los Angeles, California. (Gina F
Retail industry leaders said that the problem won't go away until online marketplaces tighten up security and transparency around peer-to-peer transactions.
"Today, there’s really no limit to how much can be sold," Brewer said. "You're hiding behind a platform, probably using a fake name, fake business information. And unfortunately, platforms like Facebook are doing very little to identify who these individuals are."
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The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Act) has been introduced in both chambers of Congress with bipartisan co-sponsors.
The bill would require online platforms to verify the identities of high-volume third-party sellers and require sellers to give contact information upfront.
A passerby photographs a smashed Dolce and Gabbana store window in the SoHo neighborhood of New York. (AP Photo/Mark Lennihan)
Facebook declined to comment on the INFORM ACT, but told FOX Business that it prohibits stolen goods from being sold on Facebook Marketplace.
Amazon said it supports the House version of the bill, which was introduced in October and scaled back some of the transparency requirements in the Senate version.
"We strongly support legislative efforts to stop bad actors from harming consumers, including increasing penalties against online criminals and providing greater resources for law enforcement," Amazon said.
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Last month, 20 CEOs from several sectors sent a letter to Congressional leaders urging them to pass the INFORM Act, writing that "criminal networks and unscrupulous businesses have exploited a system that protects their anonymity."