The CEOs of Target, Kroger, and Best Buy say anonymous online vendors are selling stuff that was stolen from their stores, and they are asking Congress to step in
Several large retailers' leaders sent a letter to Congress asking to address organized retail crime.
Criminal retail rings cost companies like Target and Home Depot billions the past year, the FBI said.
The letter cites "lack of transparency" in third-party marketplaces as enabling the activity.
Leaders in the retail industry are fed up with organized retail crime's effect on their businesses, and they're asking Congress to take action.
Twenty CEOs at major retailers sent a letter addressed to congressional leadership on Thursday asking lawmakers to pass legislation to help curb illegal business activity by anonymous vendors online.
Retailers say they have seen an uptick in organized criminal activity in recent months, including through brazen smash-and-grab thefts, with many stolen products being resold on online marketplaces. The retail industry has lost billions in the past year from the reselling of these "hot" items, according to the FBI and a 2020 survey from the National Retail Federation.
Signatories include the CEOs of Target, CVS Health, Rite Aid, Home Depot, Dollar General, AutoZone, Kroger, Petco, Ulta Beauty, Nordstrom, and Best Buy, as well as the president of the Retail Industry Leaders Association.
In the letter, the business leaders point to the "anonymity of the Internet" and the "failure of certain marketplaces" to verify their sellers as causes for the criminal retail practices.
"In the current environment, criminal networks and unscrupulous businesses have exploited a system that protects their anonymity to sell unsafe, stolen, or counterfeit products with little legal recourse," the letter reads. "This lack of transparency on particular third-party marketplaces has allowed criminal activity to fester."
The CEOs want Congress to support a bipartisan bill that would force online marketplaces to authenticate high-volume third-party sellers.
The bill, called the Integrity Notification and Fairness in Online Retail Marketplaces for Consumers Act, or the INFORM Consumers Act, would make it harder for bad sellers to hide behind fake screen names and false business information when fencing illicit products, the letter said.
But some groups, like the Makers and Merchants Coalition, a trade group representing third-party online sellers, have spoken out against the INFORM Consumers Act, saying it helps eliminate competition to big-box retailers, the coalition previously told Insider.
Online marketplaces already have a host of safety measures in place that protect both shoppers and sellers, including verifying the online sellers that conduct business on their platforms," a spokesperson from the coalition said. "Retail theft needs to be addressed at the brick-and-mortar scene of the crime."
The retail leaders do not explicitly name third-party marketplace platforms in the letter, but multiple e-commerce sites have pushed back on claims that they don't do enough to monitor illegal activity on their platforms.
Amazon introduced a live-video and physical-address-verification method last year, allowing the company to verify sellers' identities with their government-issued IDs, the company told Insider. The company also said it came out in support of the INFORM Consumers Act in October.
"Amazon does not allow third-party sellers to list stolen goods in our store, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making law enforcement referrals," an Amazon spokesperson said in a statement to Insider. "We regularly request invoices, purchase orders, or other proofs of sourcing when we have concerns about how a seller may have obtained particular products that they want to sell."
Facebook Marketplace prohibits the sale of stolen items in accordance with its commerce policies. The platform responds to valid legal requests and may also share information with law enforcement, in line with its terms, and regulators in cases where it could prevent fraud or other types of illegal activity, a Meta spokesperson told Insider.
Online commerce platform, eBay, is "committed to providing a secure online shopping experience to millions of people globally," an eBay spokesperson told Insider. "We have zero-tolerance for criminal activity on our platform," adding it also supports the latest version of the INFORM Consumers Act, and has policies and programs to monitor for stolen items.
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