NRF Welcomes Legislation Making Organized Retail Crime a Violation of Federal Law

WASHINGTON--(Business Wire)--
The National Retail Federation welcomed today's introduction of
legislation that would make organized retail crime a federal offense
in an attempt to stop a growing problem that costs retailers and
consumers as much as $30 billion a year and threatens public safety
through the sale of tainted goods.

"The introduction of this bill shows that Congress realizes
organized retail crime is more than just shoplifting," NRF Vice
President for Loss Prevention Joseph LaRocca said. "Organized retail
crime is a large and growing national issue with dollar losses bigger
than robbery, larceny, burglary and auto theft combined. It also
threatens public health and safety when thieves tamper with items like
baby formula or over-the-counter medications before offering them for
sale. This legislation will make organized retail crime part of our
federal criminal statutes, and give law enforcement officers and
prosecutors the tools they need to put these criminals behind bars."

"A significant portion of this bill deals with on-line fencing of
stolen goods," LaRocca said. "On-line auctions and other markets on
the Internet provide a Wild West environment where thieves can re-sell
stolen property to customers on a national or even international level
with virtually no questions asked. Requiring Internet marketplaces to
live up to their responsibility to block the sale of obviously stolen
merchandise is not unreasonable. We've seen from this week's ruling on
the sale of counterfeit goods that current laws are not adequate to
police these sites. It's time for Congress to bring on-line crime
under control."

H.R. 6491, the Organized Retail Crime Act of 2008 was introduced
today by Representative Brad Ellsworth, D-Ind., with Representative
Jim Jordan, R-Ohio, as the lead co-sponsor.

The bill would define organized retail crime as "the acquiring of
retail merchandise by illegal means for the purpose of reselling the
items" and make such activity - including transportation, sale or
receipt of stolen retail goods, - a federal crime. Among other
provisions, sale of stolen or counterfeit gift cards, or items with
faked Universal Product Codes or Radio Frequency Identification chips
would be considered fraud. Those found guilty of committing or
facilitating organized retail crimes would be subject to appropriate
existing fines, prison terms and forfeiture, and the legislation would
require the U.S. Sentencing Commission to review its guidelines for
cases involving such crimes.

The bill would also establish that operation of on-line
marketplaces such as auction sites can be considered "facilitation" of
organized retail crime unless the operator can show that specific
steps had been taken to ensure that goods being sold were not obtained
by theft or fraud. Site operators would be required to "expeditiously"
investigate complaints that stolen items are being sold, maintain
records of the names and physical addresses of high-volume sellers,
and require high-volume sellers to either post that information along
with merchandise offerings or make it available upon request to any
business with a reasonable suspicion about the merchandise. Operators
of on-line marketplaces could also be sued by any business whose
stolen goods were sold.

Retailers lose between $15 and $30 billion to organized retail
crime each year, according to the FBI and retail loss prevention
experts. The figure compares to the $18 billion for robbery, larceny,
burglary and auto theft combined reported by the FBI Uniform Crime
Report. In addition, a record 85 percent of retailers reported that
they were victims of organized retail crime in the past year,
according to NRF's annual survey on the issue.

Organized retail crime rings typically target everyday consumer
products that are in high demand and easy to steal such as infant
formula, razor blades, batteries, analgesics, cosmetics and gift
cards. More expensive products such as DVDs, CDs, video games,
designer clothing and electronics are also highly prized. Once stolen,
the goods are resold at pawn shops, flea markets, swap meets and the
Internet. The thefts force retailers to increase prices to cover the
losses, and threaten public health when crime rings tamper with items
such as infant formula or medication by extending expiration dates or
repackaging and relabeling the items.

The National Retail Federation is the world's largest retail trade
association, with membership that comprises all retail formats and
channels of distribution including department, specialty, discount,
catalog, Internet, independent stores, chain restaurants, drug stores
and grocery stores as well as the industry's key trading partners of
retail goods and services. NRF represents an industry with more than
1.6 million U.S. retail companies, more than 25 million employees -
about one in five American workers - and 2007 sales of $4.5 trillion.
As the industry umbrella group, NRF also represents over 100 state,
national and international retail associations. www.nrf.com

National Retail Federation
J. Craig Shearman, 202-626-8134
shearmanc@nrf.com

Copyright Business Wire 2008