UPDATE 1-Organized theft up against retailers - US study

Wed Jun 10, 2009 6:17pm EDT

Related Topics

 * 6 in 10 retailers found stolen goods on Internet
 * 61 percent of retailers say police don't understand
 * 73 percent of retailers have seen increased crime
 (Adds comment by eBay, other details in paragraphs 9-11)
 By Ian Sherr
 CHICAGO, June 10 (Reuters) - More than nine out of 10 U.S.
retailers say they have had merchandise stolen by well-organized
crime rings, according to a new report from a leading trade
group.
 The National Retail Federation said 92 percent of retailers
said they had been a victim of organized crime over the past
year, up from 84 percent in last year's survey.
 The survey found that 73 percent of the 115 retail companies
surveyed had seen increased criminal activity over the past
year, up from 62 percent last year and 46 percent when the study
began in 2005.
 The retail sector has suffered from the recession as a drop
in customers has forced businesses to lay off workers, cut
employee pay and suspend benefits just to survive. At the same
time, retailers are seeing a spike in crime.
 "Organized retail crime rings have realized that tough
economic times present new business opportunities by stealing
valuable items from retailers and turning around to sell the
merchandise to consumers looking for bargains," Joe LaRocca, the
trade group's senior asset protection adviser, said in a
statement.
 Advanced retail thieves work in groups to steal thousands of
dollars worth of in-demand designer clothing, over-the-counter
medicines, infant formula, gift cards and electronics through
tactics ranging from sophisticated UPC code swapping to blatant
grab-and-run attacks, the study says.
 These thieves then conspire to warehouse the stolen
merchandise and then resell it at near-market value at swap
meets, flea markets, pawn shops and temporary stores.
 Six out of 10 retailers say they have identified stolen
merchandise and gift cards in those places. The same percentage
also found them at online auction and sales sites, such as
Craigslist and eBay (EBAY.O).
 The popular online auction company disagrees with that
assessment, however, citing a zero-tolerance policy for criminal
activity, and its record-keeping practices which it says help
police in their investigations.
 "It simply doesn't make sense to blame online marketplaces
for a problem that has existed since well before the Internet
was invented," said eBay's vice president and deputy general
counsel for government relations, Tod Cohen, in a statement.
 Craigslist has also fought back against such assertions in
the past, citing work with law enforcement, and similar
electronic trails that are easily traceable.
 However, the study still warns that half of "new in box" and
"new with tags" merchandise for sale in these places has, in
fact, been stolen. This is problematic because online shoppers
often prefer these "new" items, thinking defective merchandise
could still be repaired by or returned to the manufacturer even
if they bought the product from a stranger.
 As for law enforcement, 61 percent of the NRF survey
respondents said they did not believe the police understood the
complexity or seriousness of such crimes.
 (Reporting by Ian Sherr; Editing by Lisa Von Ahn and Matthew
Lewis)

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