Last week, the manager of Dillard's at Greenbrier Mall called the Chesapeake Police Department about an entire rack of Coach handbags that were stolen from the department store.
Soon after the theft, an employee noticed some Coach purses that looked familiar on the auction Web site eBay, said Robert Hummel, the Chesapeake detective who is handling the case. The employee thought he saw a Dillard's tag on a bag offered online, Hummel said.
The problem is it's nearly impossible for police or Dillard's employees to know whether the Coach bags on eBay are the same as those stolen from the store, Hummel said. Even if the products carry Dillard's tags, they wouldn't necessarily identify the specific store where they came from.
That's part of the appeal of an online auction to thieves, retail experts say. Criminals can "e-fence" stolen goods with virtual anonymity and little risk of being tracked, compared with the face-to-face transaction of selling the merchandise to a pawn shop or from the back of a truck.
"It's throwing sand in the wind for us to try to investigate a case," Hummel said.
The seller-identity dilemma is one U.S. Rep. Bobby Scott aims to solve with proposed legislation known as the E-fencing Enforcement Act of 2008. The bill would require operators of online auction sites to keep and disclose the contact information of any "high volume" seller whose listed items match the description of stolen goods as identified in a police report. The bill defines a high-volume seller as someone who offers a single batch of merchandise worth more than $5,000, or more than $12,000 in products over a year.
Scott, the Newport News Democrat who chairs the House subcommittee on Crime, Terrorism and Homeland Security, has heard from merchants for years about the growing problem of e-fencing. Virginia Retail Federation, the lobbying arm of Hampton Roads trade group Retail Alliance, and its national counterparts have pushed for Congress to address e-fencing and other issues related to so-called organized retail crime. Those elaborate theft rings steal billions of dollars in products with the intent to sell them back to consumers.
"It's profitable because they can fence the stolen goods over the Internet," Scott said. Anyone selling hundreds of bottles of cough syrup or other items in such high volume, he said, raises questions about how those products were procured.
"Anybody can do this. You can have an internal employee embezzling and setting up an auction," said Margaret Ballard, vice president of advocacy for Retail Alliance and the Virginia Retail Federation. "Retailers are finding that Internet auction sites are more of a problem than the flea markets and the pawn shops."
In a National Retail Federation survey released in June, 68 percent of members responding said they found products or gift cards they identified as stolen for sale online, and 63 percent said they've noticed an increase in Internet fencing in the past year. Almost 40 percent of the items sold on the Web as "new in box" are likely stolen or obtained by fraud, including purchases using stolen credit cards, according to the retailers' estimates in the survey.
"It's getting worse, not better," said Joseph LaRocca, the federation's vice president of loss prevention.
Scott's bill, HR6713, along with other proposed legislation addressing organized retail crime, would help discourage e-fencers by taking away their cloak of anonymity, LaRocca said. It also would allow retailers to file civil lawsuits to recover their losses from Web operators that fail to comply.
EBay isn't the only online marketplace where thieves try to sell their bounty, but it is the largest, and its practices set the standard for others, LaRocca said. "And eBay, along with the criminals, have both profited from the sale of these stolen goods," he said, referring to the fees that eBay charges per transaction.
EBay Inc. officials, based in San Jose, Calif., said they already have policies aimed at verifying the legitimacy and safety of items sold on the site. The company provides seller information to law enforcement officials in most cases when they request it, making Scott's legislation unnecessary, said Catherine England, an eBay spokeswoman.
EBay objects to requests from retailers making a wide sweep of auctions they simply suspect might contain stolen items, England said. "When it's more of a fishing expedition, we're putting ourselves in a position where we're compromising the privacy of our sellers," she said.
Scott's legislation, she added, unfairly targets a broad group by pinpointing high-volume sellers, which could include companies legally offering liquidated or overstock merchandise. "Just because someone has a high-volume number of items," England said, "does not mean they have anything funny going on."
By Carolyn Shapiro
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