Retail crime threatens to steal holiday spirit, but Congress can fix that

For many retailers, the holiday spirit is once again being soured by an uptick in organized retail crime — professional-scale robberies involving multiple bad actors that can span cities or even states. While shops across the country are bulking up security measures in anticipation of increased activity, it’s already a longstanding issue for many merchants. 

Take a look at companies such as Rite Aid, which lost an additional $5 million last year to retail theft. Or Target, which just revealed that inventory shrinkage has reduced its gross profit margin by $400 million so far in 2022 compared to 2021— a number that is likely to escalate to $600 million, according to its chief financial officer Michael Fiddelke. 

Unfortunately, they aren’t alone. According to a recent report from the National Retail Federation, U.S. businesses experienced a 26.5 percent increase in organized retail crime incidents in 2021, resulting in $94.5 billion in losses — up from $90.8 billion in 2020. But not only retail theft is making a severe financial impact; eight in 10 stores reported that violence and aggression associated with incidents increased in the past year as well, thrusting the safety of both retail employees and customers into the spotlight. The concern is even greater for small businesses, which have fewer resources to cope with theft. 

These crime rings are getting more sophisticated and increasingly turning to the internet to sell their high volume of stolen goods, expanding their access to an unsuspecting consumer community that spans the globe. 

A pervasive problem such as this warrants a speedy, federal solution that can halt organized retail crime in its tracks. Thankfully, the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act could help deliver meaningful retail relief for consumers and businesses alike before the end of this year. 

If passed, the INFORM Consumers Act would ensure that online platforms universally verify the identity of high-volume, third-party sellers to prevent nefarious actors from operating online. By authenticating the seller’s name, tax ID number, bank account information and contact information, online marketplaces would institute an additional layer of seller transparency that could effectively kick organized retail crime rings off the internet, while still empowering honest entrepreneurs to reach new markets and customers via e-commerce.

A political rarity in Washington, the INFORM Consumers Act is a bipartisan bill that just passed the House by an overwhelming majority. Although that shouldn’t come as a surprise, the legislation has garnered praise from unlikely bedfellows, including online marketplaces, brick-and-mortar retailers, law enforcement agencies and consumer advocacy groups. Among a flurry of other controversial or partisan legislation up for a vote during this lame-duck session, the INFORM Consumers Act stands out as an effective policy with unparalleled support. 

It’s time to stand up for retailers — big and small — and their patrons. We can’t let the threat of organized theft overshadow a shopping season that’s supposed to be brimming with peace and joy. Congress can fulfill an item on everyone’s wish list and pass the INFORM Consumer Act before the end of the session.      

Justin Harris is president of the Arizona Police Association and the Glendale Law Enforcement Association.