Last month Walgreens said it was closing five stores in San Francisco, not because they were unpopular with consumers, but because they were too popular with thieves.
The stealing was brazen — one man repeatedly raided a store astride a bicycle, exiting toting a garbage bag full of stolen goods. Walgreens said the losses made the continued operation of the stores unsustainable.
This kind of organized retail crime is not exactly new. But it is getting worse, according to a new report from the Retail Industry Leaders Association (RILA) and a group called the Buy Safe Coalition. The report estimates that in 2019, as much as $68.9 billion worth of merchandise was stolen from retailers.
Retailers are not the only victims of these crimes, the report contends, estimating that retail crime results in $125.7 billion in lost economic activity and costs federal and state governments nearly $15 billion in lost tax revenues, a figure that doesn’t include lost sales taxes.
The report, “The Impact of Organized Retail Crime and Product Theft in the United States,” says retail workers also suffer, and not just because of the job losses that result when no-longer-viable retail outlets like the Walgreens stores in San Francisco shut their doors.
“The impact on frontline retail workers can no longer be ignored by policy makers,” said Ben Dugan, president of the Coalition of Law Enforcement and Retail (CLEAR). “As these crimes have become more organized and brazen, they have also led to more violence against employees. These crimes are not just property crimes, they impact the safety of everyone in the store.”
Retailers say that organized retail crime is enabled by online marketplaces that provide thieves with a convenient place to sell their stolen goods.
“Professional thieves and organized criminal rings are building a business model by stealing and reselling products, increasingly online through marketplace platforms like Amazon or Facebook,” said Michael Hanson, senior executive vice president of public affairs at RILA. “The lack of transparency online has made it easy to hide behind a screen name and fake business information to peddle stolen products. Washington needs to establish a base level of transparency on e-commerce platforms to make it harder for criminal enterprises to operate in the shadows of the internet.”
RILA and the Buy Safe Coalition say a bipartisan bill called the INFORM Consumers Act would provide that transparency.
Businesses do tend to resist regulations that affect the way they operate, of course, worrying about the costs of compliance and the potential legal liabilities the laws could impose. But the current House version of the INFORM Consumers Act has been endorsed by Amazon and other online sellers, so perhaps the bill has a chance to pass and one unsavory side effect of the internet can be addressed. It would be a start.