The rampant rise in organized retail crime is a major, ongoing problem in the United States that has hurt consumers and retail businesses alike. Videos of brazen thefts at national retailers have garnered significant attention in many cities, but small retail businesses are also targeted. In fact, these small businesses are often doubly victimized: First by the crime in and around their stores, and then by fraudulent activity in many competitive online marketplaces where stolen merchandise is peddled by criminals masquerading as merchants.
As a final version of the Bipartisan Innovation Act continues to be negotiated, Congress must ensure that H.R. 5502, the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act — the most common-sense option available to address this crisis — is included in the final package.
Organized retail crime costs retailers more than $720,000 for every $1 billion in sales on average, according to the National Retail Federation’s 2020 Organized Retail Crime Survey, and 69 percent of retailers surveyed in 2021 said they had seen a rise in ORC during the previous year. Products stolen in stores are ending up online, which poses a problem for both the consumer and honest online sellers. Online marketplaces have already instituted enhanced programs and partnerships with law enforcement to combat this, but more resources and increased penalties for criminals online only stand to help.
Retail contributes $3.9 trillion to annual GDP and supports one in four U.S. jobs. To continue powering the U.S. economy, 78 percent of retailers say federal law is essential to combat the onslaught of organized retail crime that continues to terrorize their storefronts. Without federal support, this thriving industry and the businesses and consumers that rely on it will continue fighting an uphill battle against nefarious actors online.
Everyone stands to benefit from solutions that increase protections for consumers, no matter where or how they’re shopping. The INFORM Consumers Act is the most pragmatic step Congress can take to address organized retail crime without sacrificing the success of small businesses selling in online marketplaces.
As written, the federal INFORM Consumers Act would help disincentivize organized retail crime networks by verifying basic identification and contact information for high-volume sellers, making it more difficult to sell stolen merchandise online.
These are not victimless crimes; they jeopardize employee and customer safety and disrupt store operations. They are also in some cases violent — customers, employees and community members are traumatized by these incidents. News headlines around “smash and grab” thefts at national retailers in major cities show that organized retail crime continues to be a serious problem.
Consumers’ shopping experience would become increasingly transparent under the INFORM Consumers Act — protecting them from unintended and unsafe purchases — and bricks-and-mortar retailers could see a reprieve from the constant threat of theft.
H.R. 5502 has garnered overwhelming bipartisan support as well as support from industry and law enforcement, as it addresses both retail and consumer safety concerns. Likewise, the bill will ensure that small businesses can continue to operate online without an undue burden of compliance regulations that will vary state by state without the implementation of a federal, uniform standard.
Organized retail crime is an ongoing issue impacting all Americans in every community. We’re all consumers, and millions of Americans depend on some form of retail to make a living. In a day and age where divisiveness seemingly continues to conquer cohesion, the retail industry implores Congress to include H.R. 5502, the INFORM Consumers Act, in the final Bipartisan Innovation package. It must pass this year. We cannot afford to wait.
