With just a few clicks, online shoppers on Facebook Marketplace can find pictures of stacks of new, boxed power tools listed for a fraction of their in-store price.
A few clicks more reveal eBay listings for “mystery packages” — where the shopper pays for a box of unknown goods. Other online listings show piles of unopened letters in the back of vans, billed as “unclaimed mail.”
Many of the items are likely stolen from stores or porches, according to Colorado law enforcement. But connecting the stolen goods for sale to the people selling them is difficult in an online environment that allows anonymity, state Attorney General Phil Weiser said. Reselling stolen goods used to involve the inherent risk of showing up in person to make a transaction.
“A theft ring can simply create a fake account, click the option to become a third-party seller, post their stolen items online, and ship stolen products anonymously,” Weiser said. “The ease in which this can be done and the anonymity provided has made retail theft — both shoplifting from retailers as well as porch piracy theft — a much less risky and much more profitable crime.”
Colorado lawmakers want to discourage organized rings of thieves from stealing by making it harder for them to resell their loot via online marketplaces like eBay, Amazon, Craigslist and Facebook. A bipartisan bill pending in the legislature, HB22-1099: Online Marketplaces and Third-Party Sellers, would require people who sell large amounts of new items on the internet to register a slew of personal information with the online marketplaces.
People making more than $5,000 in sales or making more than 200 transactions over a 12-month period will have to register their bank account number, contact information and tax identification number with the marketplace, which will be required to verify the information. Sellers who make more than $20,000 through a marketplace must also disclose their full name, address and contact information to any customer after a purchase.
Rep. Terri Carver, a Colorado Springs Republican sponsoring the bill, compared the measure to the regulations placed on the brick-and-mortar marketplaces that used to be a common place to sell stolen goods: pawn shops.
“This is the modern-day equivalent of those rules,” she said Thursday at a hearing for the bill in the House Business Affairs and Labor Committee, where lawmakers approved it unanimously.
If a seller doesn’t comply, the marketplace must suspend their account. Marketplaces that do not comply with the law’s requirements could face lawsuits from the Colorado Attorney General’s Office.
The bill would not affect people selling used goods or who make infrequent sales, said sponsor Sen. Rob Woodward, a Larimer County Republican.
“We’re trying to find that line where we can identify the big players and separate them from the little guy who has the Dewalt drill from his mom who’d rather have the cash,” he said.
Big-box retailers in Colorado testified that they’re losing millions of dollars due to thefts.
David Ternus, asset protection manager for Walgreens in Colorado, said employees at one Pueblo store watched helplessly as a woman filled a duffel bag with cosmetics and walked out the door. They found the stolen goods on Facebook Marketplace less than an hour later, he said.
About $3.6 million of Colorado Walgreens stores’ losses can be directly attributed to organized retail theft, he said. Some of the chain’s stores are losing about $1,000 a day.
One solution to deter theft is to hire more employees, Ternus said, but retailers have struggled to hire enough staff in the current labor market. Stores that have frequent thefts are often the hardest to staff, compounding the problem.
Jamie Bourne, a corporate organized retail crime manager for Home Depot, said stores in Colorado first had to lock up the portable power tools to keep them from being stolen. Then thieves started taking batteries, so they locked those up, too. Then bulk wires.
“We just can’t operate our business by locking everything up,” he said.
Smaller businesses are impacted as well. Kwame Spearman, CEO and co-owner of Tattered Cover, said the chain’s bookstores have seen an increase in thefts over the last two years. He cited another downtown business that recently implemented a $1 fee per purchase to combat shoplifting losses.
“We’re concerned we might have to take measures like that,” he said.
The bill’s sponsors hope the changes will help law enforcement track down people selling stolen goods online by giving them information with which to begin investigating.
“This bill will allow us to collect small breadcrumbs of evidence before they disappear into the black hole of the internet,” First Judicial District Attorney Alexis King said while testifying Thursday in support of the bill.
Colorado law enforcement officers in recent years have busted several rings worth hundreds of thousands of dollars.
In April, an Arapahoe County grand jury indicted three men on charges alleging they robbed a dozen hardware stores in the region and resold the stolen tools online. The men brandished handguns at store employees during the robberies and several times sprayed employees with pepper spray, according to investigators.
Two months later, investigators in Douglas County arrested seven people accused of making more than $5 million over several years by reselling stolen goods online. The group stole vitamins, cosmetics, birth control, home improvement tools and other merchandise from large retailers across the state and resold it all online, often out of state and sometimes to different countries, police said.
Some Colorado retail stores are losing millions of dollars a year in merchandise and local governments are losing out on sales tax dollars, said Chris Howes, president of the Colorado Retail Council.
“They’ve been able to turn the entire world into an illegal pawn shop,” Howes said.
Nearly identical bills are being considered in at least 30 other state legislatures due to a coordinated push by retailers’ organizations. Arkansas signed a similar bill into law last year.
The bill also mirrors federal legislation under consideration, but Colorado lawmakers said there’s no reason to wait for Congress to act.
Some of the country’s largest international online marketplaces — Amazon, eBay and Etsy — have endorsed the legislation introduced in the U.S. House of Representatives.
Legislators, prosecutors and industry representatives also said the bill was a good first step to combating organized retail theft, though there’s more to be done.
“We’re very confident this is going to pass,” said sponsor Rep. Dylan Roberts, an Avon Democrat.
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