With just a few clicks, online shoppers can use Facebook Marketplace to find images of stacks of new, boxed power tools at a fraction of their retail price.
A few more clicks reveal eBay listings for “Surprise Packages” – where the buyer pays for a box of unknown goods. Other online listings show stacks of unopened letters in the back of vans being billed for “Uncollected mail.”
According to Colorado law enforcement, many of the items are likely stolen from stores or porches. But in an online environment that allows for anonymity, it’s difficult to link the stolen goods for sale to the people selling them, Attorney General Phil Weiser said. The resale of stolen goods used to come with the inherent risk of appearing in person to complete a transaction.
“A theft ring can simply create a fake account, click the option to become a third party, post their stolen items online, and ship stolen products anonymously,” Weiser said. “The ease with which this can be done and the anonymity afforded has made retail theft — both retail shoplifting and front porch piracy — a much less risky and much more profitable crime.”
Colorado lawmakers want to deter organized thieves from stealing by making it harder for them to resell their loot through online marketplaces like eBay, Amazon, Craigslist, and Facebook. A bipartisan bill pending before the legislature HB22-1099: Online Marketplaces and Third-Party Providerswould require people selling large quantities of new items on the Internet to register a lot of personal information with the online marketplaces.
Individuals who make more than $5,000 in sales or make more than 200 transactions over a 12-month period are required to register their bank account number, contact information, and tax identification number with the marketplace, which is necessary to verify the information. Sellers making more than $20,000 from a marketplace are also required to provide each customer with their full name, address, and contact information after a purchase.
Rep. Terri Carver, a Colorado Springs Republican who supported the bill, compared the measure to regulations governing the brick-and-mortar marketplaces that used to be a common place for selling stolen goods: pawn shops.
“This is the modern equivalent of those rules,” she said Thursday at a hearing for the bill in the House Business Affairs and Labor Committee, where lawmakers unanimously approved it.
If a seller does not comply, the marketplace must block his account. Marketplaces that fail to comply with legal requirements could face lawsuits from the Colorado Attorney General’s Office.
The bill would not affect people who sell used goods or make rare sales, said sponsor Sen. Rob Woodward, a Larimer County Republican.
“We’re trying to find the line where we can identify the big players and separate them from the little guy who has the Dewalt drill from his mother who would rather have the money,” he said.
Major retailers in Colorado said they lose millions of dollars to theft.
David Ternus, asset protection manager at Walgreens in Colorado, said employees at a Pueblo store watched helplessly as a woman filled a holdall 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 the losses at Colorado Walgreens stores 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 preventing theft is to hire more staff, Ternus said, but retailers are struggling to hire enough staff in the current job market. Stores with frequent theft are often the most difficult to staff, compounding the problem.
Jamie Bourne, an organized retail crime manager at Home Depot, said Colorado stores first had to lock up the portable power tools to prevent them from being stolen. Then thieves started stealing batteries, so they locked those up too. Then bulk wires.
“We just can’t run our business by locking everything up,” he said.
Smaller businesses are also affected. Kwame Spearman, CEO and co-owner of Tattered Cover, said the chain’s bookstores have seen a spike in thefts over the past two years. He recently cited another downtown store introduced a $1 per purchase fee to combat shoplifting losses.
“We fear that we will have to take such measures,” he said.
The bill’s sponsors hope the changes will help law enforcement track down people who are selling stolen goods online by giving them information to start their investigation.
“This bill will allow us to collect little breadcrumbs of evidence before it disappears into the black hole of the internet,” said Alexis King, prosecutor for the First Circuit while testifying Thursday in support of the bill.
Colorado law enforcement officers have busted several rings worth hundreds of thousands of dollars in recent years.
A grand jury in Arapahoe County in April has accused three men They claimed they robbed a dozen hardware stores in the area and resold the stolen tools online. During the robberies, the men pulled out handguns on store employees and, according to investigators, sprayed the employees several times with pepper spray.
Two months later, Douglas County investigators arrested seven people accused of making more than $5 million over a number of years from reselling stolen goods online. The group stole vitamins, cosmetics, birth control, home improvement tools and other merchandise from major retailers across the state and resold everything online, often out of state and sometimes to different countries, police said.
Some Colorado retail stores lose millions of dollars in merchandise every year, and local governments lose sales tax money, said Chris Howes, president of the Colorado Retail Council.
“They managed to turn the whole world into an illegal pawn shop,” Howes said.
Nearly identical bills are under consideration in at least 30 other state legislatures as a result of a coordinated push by retailer associations. Arkansas signed a similar law into law last year.
The bill also reflects federal legislation being considered, but Colorado lawmakers said there was no reason to wait for Congress to act.
Some of the largest international online marketplaces in the country – Amazon, eBay and Etsy – have approved legislation introduced in the US House of Representatives.
Lawmakers, prosecutors and industry officials also said the law was a good first step in tackling organized retail theft, although more needs to be done.
“We’re very confident that this will happen,” said sponsor Rep. Dylan Roberts, an Avon Democrat.