RILA Execs Talk Leading the Push for Organized Retail Crime Legislation

In the LP Magazine January 2022 ORC BLITZ virtual event, three executives from the Retail Industry Leaders Association (RILA) explained how their organization is working with their retail members to push for federal and state legislation that would increase penalties for organized retail crime (ORC) as well as force online marketplaces to be more transparent with who is selling goods on their platforms. Following are excerpts from their presentation.

Jason Brewer, Senior EVP, Communications and Marketing

Theft is something that’s not new to retail, but about a year before the pandemic, many retailers saw an uptick in ORC, and it was having an impact not only on their bottom lines, but on their employees. They were starting to see increasing violence in stores, and the brazenness with which thieves were coming into stores was getting out of hand.

This started us thinking about how to tackle this challenge. In our conversations with RILA’s asset protection community and other stakeholders, we identified three areas that contributed to the situation:

• First, felony thresholds at the state level had been raised in several places. This resulted in retail theft crimes not treated as seriously as in the past.
• Second, in many cases, police were no longer responding in many jurisdictions to what they perceived as simple petty theft.
• Third, the rise in online marketplaces as a place to very quickly, and anonymously, fence large quantities of stolen goods.

The selling of stolen goods on online marketplaces was one area that our members have seen a huge uptick over the last several years, and during the pandemic, the problem got exponentially worse. They consistently see product of theirs that they suspect has been stolen from their stores showing up on these platforms. That is the main problem that we have sought to address through a coalition of different business groups and companies. Together we created the Buy Safe America coalition to shine a spotlight on the problem and to help policymakers understand what was happening.

We are trying to address it from multiple angles. We want to work with law enforcement on smarter laws at the state and local level. We want better collaboration at the state and local level both with retailers, the FBI, and other law enforcement agencies. But the big thing we’re focusing on is the need for more transparency online. It’s way too easy to hide behind a screen name and fence stolen product. That’s something that we think Congress needs to address.

Michael Hanson, Senior EVP, Public Affairs

As we had conversations with members of Congress about stopping ORC, they really focused in on creating more transparency and accountability on third-party marketplaces, which eventually led to the introduction of the INFORM Consumers Act. The bill does a couple of things. It requires online marketplaces to verify certain third-party sellers by confirming certain business information, such as tax identification number, bank account information, name, email, address, and phone number, which doesn’t happen on all marketplaces right now.

The second part is the seller must provide contact information to the customer so the consumer can make a more informed choice of who they’re buying from. And if there’s a problem with that good, they can contact that seller and either get a refund or exchange the good. From a retail perspective, we all know that if you go into a brick-and-mortar store and buy a product that you’re unhappy with, you know exactly where to go. You can talk to the salesperson or to the manager and get your problem fixed. Consumers deserve that same right whether they buy a consumer product in a brick‑and‑mortar retail store or if they buy it on a third-party marketplace.

The simple act of verification and disclosure has gained tremendous momentum across all sectors of the business community. When the Buy Safe America coalition was first set up it was just retailers. Now, we have close to sixty different companies, associations, and others who have joined, because the legislation not only helps to stop ORC, but it also helps to mitigate the sale of counterfeit goods.

One of the reasons we’ve been so successful at the federal level is the direct engagement of retailers, brands, law enforcement, and trade associations. Because of this, members of Congress have been active in their support. Rep. Jan Schakowsky (D-IL), chair of the House Energy and Commerce Subcommittee on Consumer Protection held a hearing and on the Senate side the chairman of the Senate Judiciary Committee, Dick Durbin, invited a host of panelists to testify as well, including Ben Dugan from CVS. Hearing about ORC firsthand from retailers really resonated with the members of the committees and highlighted the need for legislation to help solve this growing problem.

Hearings like this and the recent press stories about ORC and counterfeits has really brought lawmakers together because they see not only all the dangerous counterfeit products that are harming consumers, but they have come to understand what ORC means to the community and retail workers. As they have seen both of these crimes grow, the support for the INFORM Consumers Act has also grown.

In fact, there’s a bill in the US House called the Competes Act, and the INFORM Consumers Act is part of that bill. Our hope is that through the negotiations between the House and Senate on this legislation, the INFORM Consumers Act may become law, hopefully within the next few months.

Lisa LaBruno Esq., Senior EVP, Retail Operations

In retail operations, we’re leveraging our AP community, particularly our Asset Protection Leaders Council and our Crimes Against Business Committee to lead initiatives that are focused on collaboration among key stakeholders—retailers, law enforcement, prosecutors, and online marketplaces.

Online Marketplaces. A couple of years ago, we invited online marketplaces to Washington, DC, to meet with a group of retailers to talk about the growing problem of stolen product being offered for sale on online platforms. We hoped to persuade online marketplaces like Amazon to partner with retailers, share information, and put steps in place to proactively identify stolen goods.

Since that in-person meeting, RILA has hosted a regular cadence of calls with Amazon, Facebook, OfferUp, and others. Retailers told the online marketplaces about the persistent challenges they were experiencing and shared suggestions for how the parties could work more cooperatively to combat ORC. Candidly, we were met with a lot of resistance on the part of the online marketplaces and there was minimal progress. They were unwilling to voluntarily make enhancements to their platforms that would slow down the sale of stolen product on their platforms. So, we needed to compel them—via legislation—to do what we were asking them to do voluntarily.

Retailers. We are driving several initiatives with RILA member companies to improve ORC information sharing among retailers. One that I am really excited about is our partnership with IBM to develop a retail theft information sharing platform. Nine RILA member retailers participated in the proof of concept. Results were very promising, and we’ve invited several more retailers to participate and help refine things. We’re aiming to publicly launch the platform in the spring.

Federal Law Enforcement. I’m energized by the recent launch by Homeland Security Investigations of its ORC task force. RILA is supporting their effort, giving them a platform to share progress with retailers and connecting them to retail ORC teams. We’re also working closely with the FBI on an ORC threat assessment. RILA member companies are sharing case data with the FBI to help the agency understand the scope of the problem so they can identify resource needs.

Prosecutors. RILA is engaging with prosecutors on several levels. More broadly, we are hosting an industry-first Retailer-District Attorney Retail Theft Roundtable in June. RILA partnered with the National District Attorneys Association to bring retailers and DAs from across the country together to address the problem of persistent habitual offenders and the escalation of violence in stores. And we are working closely with attorneys general (AG) and commanders of their offices’ ORC task forces. I’m excited that AGs and their teams will be well represented at RILA’s Retail AP Conference in April. Their participation is reflective of the partnerships we’ve formed.

Finally, we’re partnering with county DAs in the most challenging environments to tackle retail theft in a way that is sustainable and will have long-term impact. For example, last summer we brokered a meeting with the Manhattan DA’s office given the rise in theft and violence in city stores. Since then, we’re driving parallel initiatives with the office’s top prosecutors as well as with their investigation unit. We’re hoping to replicate this in other DA’s offices across the country.

I’ve been involved in ORC work since my days as a prosecutor thirty years ago. Not much has changed over the years—until recently. I feel like there’s a real sense of urgency to tackle the problem of persistent and organized retail theft and the violence that comes along with it. And it’s not just the retailers who are talking about it—law enforcement, prosecutors, politicians all have skin in the game. We’re starting to see real progress, and I’m optimistic that it’s just the beginning.

This article includes excerpts from a presentation by these three executives in a January virtual event. View their entire presentation or listen to the podcast version here. 

This story is a part of LPM‘s Special ORC Issue. Download the full issue for free here.