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Is organized crime taking advantage of online marketplaces?
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5 min read

Is Organized Crime Taking Advantage of Online Marketplaces?

In the new eCommerce economy, many online brand protection professionals can and do play a large role in the fight against offline theft and crime. For criminals, retail crime is easier than ever, and gone are the days of shoplifters turning to an old school ‘Fence’ to offload stolen products. All you need is an online identity and a smartphone and your online marketplace operation are up and running.

Last month the Business section of the Wall Street Journal featured a story about retailers’ efforts to stop organized crime rings from stealing products from their stores and reselling those products online using popular eCommerce platforms such as Amazon and eBay. The article cited a report from the Coalition of Law Enforcement and Retail which estimated that retail theft amounts to $45B in losses, annually. Complicating matters for the retailers are eCommerce platform providers themselves who do not always vet their sellers and are slow to provide investigators with information about the sellers’ identities.

To battle organized retail crime, brand owners need a different set of tools than the ones used for anti-counterfeit operations. Retailers need to focus on the seller identities, not the product listings and consider hiring a private investigator to monitor suspected criminal “boosters” or shoplifting activities and report thefts to local authorities.

Anti-counterfeiting tools and technologies often focus on detecting fake product listings on eCommerce websites. After scanning and identifying counterfeit products, many of these tools enable brand owners to submit complaint notices to eCommerce platform providers requesting takedown actions against an unauthorized seller. Yet, when dealing with organized retail crime, products are genuine and not fakes, so your brand protection strategy must focus not on product detection, but rather on scanning for, and learning, the seller’s true identities and then tracking their activities online and offline and when possible, correlating online sellers with physical incidents of theft or product loss.

By monitoring online seller behavior on platforms like Amazon, it is possible to aggregate which sellers have large unexplained quantities of products for sale - the same products targeted in the theft or loss your company is reporting. While shipping costs for lightweight stolen products, such as OTC medications, can be inexpensive for interstate shipping, heavier stolen merchandise (think, detergent, small medical devices, etc) cost more to ship. So the online seller's physical location and vicinity to the theft incident is also very relevant.

Upon identification of unauthorized sellers, brand owners should set up a “test buy” to receive the products for inspection. Often, brand owners place identifying tags on their products for manufacturer identification. UPC’s can be cross-referenced with your inventory of stolen products. If not yet already known, this information helps track down the location of the stolen item's warehouse or store.

To catch suspected “boosters,” retailers should employ the services of a private investigator to track down the location of the shoplifter. There are many private investigators that specialize in brand protection work. Before hiring a private investigator, retailers should do some due diligence and:

  • Confirm that the investigator is properly licensed in the jurisdiction in which the investigator works and if possible, also where the suspected counterfeiter operates;
  • Confirm that the investigator carries insurance so that you are not financially responsible for damages or injuries sustained by the investigator while conducting the investigation;
  • Ask for examples of previous work products – Reports, photos, investigation notes, etc. so you can evaluate the quality of the investigator’s work product; and
  • Request references and follow up with an investigator’s current or former clients to get comfortable with the investigator’s methods and the likelihood of success.

Curbing organized retail crime takes effort and close coordination and communication between brand protection experts, retail employees, investigators, and law enforcement. These efforts begin with having the right eCommerce platform scanning tools to find unauthorized sellers, learn their identities and where they operate, and then locate the stores where thefts are taking place.

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