A DHL warehouse employee was arrested last week for stealing $60,000 of Nike products from the Memphis, Tenn. facility where she worked.
Chamon Davis was arrested after printing duplicated tracking numbers for items she did not purchase, and then sending those items to different addresses, WREG Memphis reported. Nike’s investigators recovered $10,000 of merchandise that was set to be delivered Monday.
The theft is the latest in a crime spree plaguing retailers and their supply chains this holiday, driving the industry to take action and seek solutions.
A series of smash-and-grab robberies rocked California retailers leading into the Thanksgiving holidays, stripping Louis Vuitton and Burberry in San Francisco’s Union Square of merchandise within minutes. About 80 thieves targeted a Bay Area Nordstrom location, swarming the store and assaulting four associates while bagging thousands of dollars of goods for resale.
The issue has lawmakers on high alert. On Tuesday, California Attorney General Rob Bonta hosted a group of big-box retailers, online platforms, and law enforcement agencies in Los Angeles to discuss strategies to combat organized retail crime. Amazon, eBay and Facebook Marketplace met with representatives from CVS, Home Depot, Lowe’s, Target, the California Highway Patrol’s Organized Retail Crime Task Force, the California State Sheriffs’ Association, and the California Police Chiefs Association to discuss the uptick in “flash mob thefts” taking place across California and nationwide. Connecticut Attorney General William Tong is similarly calling on Big Tech to help crack down on rising organized retail crime, NBC Connecticut reported Wednesday.
During Tuesday’s meeting, retailers and law enforcement agencies shared best practices to combat crime, and highlighted the need to improve collaboration through the detection and investigation process. Retailers shared their experiences in working with law enforcement to arrest and prosecute perpetrators, while online platforms revealed how they detect illicit goods sold on their sites.
An Amazon spokesperson told Sourcing Journal after the meeting that the company is committed to working closely with law enforcement, retailers and brands to curb organized retail crime. The company’s efforts include “withholding funds, terminating accounts, and making law enforcement referrals” when it detects illicit selling on the marketplace.
“Beyond what we do as a company, we believe collaboration between companies and those who enforce the law is the best and most expedient way we can stop these bad actors,” the spokesperson said. “We participate in and have supported the formation of Attorney General-led task forces in California, Arizona, Utah, and Illinois and are look forward to actively participating in this most recent effort led by Attorney General Bonta.”
“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,” Bonta said Tuesday, “and it’s going to take an organized strategy to put a stop to it.”
“We will do our part to ensure our communities feel safe, and protect from organized crime the workers, businesses, and consumers who drive our economy,” he added.
Earlier this month, Bonta said a group arrested in September 2020 was sentenced for the theft of approximately $8 million of merchandise from Bay Area retailers. Law enforcement seized goods from retailers like CVS, Target and Walgreens—as well as $85,000 in cash—from the defendants’ warehouses, residences and storage facilities. Five individuals pleaded guilty to felony charges including conspiracy to commit organized retail theft, receiving stolen property, money laundering, and a special allegation for aggravated white-collar crime enhancement over $500,000.
The consequences of such crimes reverberate beyond monetary losses, the attorney general’s office said. In many cases, money made by reselling stolen items is used to fund violent crimes and human trafficking. Consumers are unwittingly buying into such schemes, especially when they purchase goods through shady businesses online.
Members of the Retail Industry Leadership Association (RILA)—including chief executives from Nordstrom, Neiman Marcus, Foot Locker, VF. Corp, Levi’s, Target and Dick’s Sporting Goods—urged House and Senate leaders to quickly pass the Integrity, Notification and Fairness in Online Retail Marketplaces (INFORM) Consumers Act. The legislation would enhance consumer protection laws to keep shoppers from purchasing stolen goods online.
“As millions of Americans have undoubtedly seen on the news in recent weeks and months, retail establishments of all kinds have seen a significant uptick in organized crime in communities across the nation,” RILA wrote. “This trend has made retail businesses a target for increasing theft, hurt legitimate businesses who are forced to compete against unscrupulous sellers, and has greatly increased consumer exposure to unsafe and dangerous counterfeit products.”
While the industry continuously invests in “people, policies and innovative technology to deter theft,” criminals have found a safe haven in the anonymity offered online, RILA said.
While there is no simple answer to stopping organized retail crime or preventing the sale of counterfeits, the lack of transparency afforded by third-party sites has allowed bad actors to thrive, it added. “If a customer buys a product from a local retail storefront or e-commerce site and it is broken or otherwise defective, the consumer knows exactly who to contact,” RILA’s members wrote. Criminal networks operating online often face little recourse, they added.
The rise in online shopping will only exacerbate the problem. About 69 percent of National Retail Federation (NRF) members saw an increase in organized retail crimes in 2020, costing an average of $700,000 for every $1 billion in sales.
The INFORM Consumers Act would require website operators to collect, verify and disclose information from high-volume third-party sellers. Under the legislation, marketplaces would be required to obtain bank account numbers, government-issued IDs, tax identification numbers and contact information for any entity that conducts 200 or more transactions totaling at least $5,000 over a 12-month period. The sites must also make those sellers’ names and contact information available to shoppers, and provide consumers with straightforward avenues to report suspicious activity.
The measures would “make it harder for criminal elements to hide behind fake screen names and false business information to fence illicit products,” RILA wrote, noting broad retail, consumer group and law enforcement support for the legislation.
Amazon supports the passage of the INFORM Consumers Act, the company’s spokesperson said, noting that it would “prevent an unworkable patchwork of state-level regulations.” The current legislation “also includes improvements over previous bills, including greater privacy safeguards for small businesses and more flexibility in what types of documents are acceptable.”
“Criminals will continue these brazen thefts as long as they are able to anonymously sell their stolen goods via online marketplaces,” RILA president Brian Dodge wrote, adding that the bill “is an important and appropriate step to stemming the tide.”
“Deterring these crimes starts with making it harder for thieves to sell stolen goods online,” he added. “We urge Congress to seize this opportunity to help protect communities, families, and consumers.”