Brick and mortar retailers are spending millions of dollars to combat organized crime rings from stealing their goods and selling them online.
"We're trying to control it the best we can, but [the problem is] growing every day," Ben Dugan, CVS Health Corp.'s top investigator, recently told The Wall Street Journal.
According to Dugan's trade association, the Coalition of Law Enforcement and Retail, retailers are estimated to lose $45 billion annually compared to the $30 billion they were losing a decade ago. At the start of the pandemic, CVS reported that thefts increased by 30 percent. Since the pandemic, the phenomenon has spiked with criminals often peddling the stolen goods at online stores like Amazon.
Sgt. Ian Ranshaw of the Thornton Police Department in Colorado says Amazon "may be the largest unregulated pawnshop on the face of the planet. It is super hard to deal with them."
But Amazon spokesman Alex Haurek says the company doesn't tolerate the reselling of stolen goods and, in fact, works with law enforcement to combat the issue. Additionally, Amazon spent $700 million last year to prevent fraud on its platform.
Over the years, retailers have pressed Congress for legislation requiring online marketplaces like Amazon, eBay, and the like to verify the details of their third-party sellers while also making certain information public to tamp down such crimes from happening.
But Amazon and other online marketplaces lobbied against such legislation, citing it would violate the sellers' privacy. Haurek argues the legislation would help retailers at the expense of small businesses selling at said online marketplaces.
"We believe the most effective way to stop fraud and abuse is for Congress and the states to increase penalties and provide law enforcement with greater resources," Haurek says.
Last year, Amazon started conducting interviews to verify seller identities and now does so for the "vast majority" of sellers, according to Haurek. As a result of increased security, Haurek added that Amazon prevented six million attempts from "bad actors" to create new seller accounts last year.
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