The fight against stolen products on Amazon and Facebook Marketplace

Over the past year, large-scale robberies have swept through stores like Louis Vuitton in San Francisco’s Union Square and a nearby Nordstrom, which was robbed by 80 people.

Law enforcement and retailers have warned the public that this isn’t traditional shoplifting. Rather, what they’re seeing is theft organized by criminal networks.

And there’s a reason it’s on the rise.

“What fuels this as an enterprise is the ease of reselling stolen merchandise on online marketplaces,” said Illinois Attorney General Kwame Raoul, who convened a national task force of state attorneys to make it easier to investigate across state lines. “It’s no longer the age where it’s done at flea markets or in the alley or in parking lots.”

Retailers say a total of $68.9 billion of products were stolen in 2019. In 2020, three-quarters said they saw an increase in organized crime and more than half reported cargo theft. Some big chains blame organized theft for recent store closures or for their decisions to limit hours.

For the U.S. Government’s Homeland Security Investigations unit, organized retail crime probes are on the rise. Arrests and indictments increased last year from 2020, along with the value of stolen goods that was seized. 

While data is imprecise about the perpetrators, there’s growing consensus that an entirely different group should be held accountable: e-commerce sites.

Amazon, eBay and Facebook are the places where these stolen goods are being sold, and critics say they’re not doing enough to put an end to the racket. The companies disagree.

Amazon, for instance, says it spent more than $900 million and employed more than 12,000 people in 2021 to prevent fraud and abuse. The company also says it requests “proofs of sourcing” when it has concerns about how products were obtained, and works with authorities to weed out illegal activity.

Online retailers have long distinguished themselves from traditional brick-and-mortar chains by saying that, when it comes to third-party sellers, they’re just a marketplace. Unlike products purchased off the shelf at Walmart or Home Depot, internet companies have claimed they’re not responsible for the quality and safety of products from outside merchants who use their platform.

That defense doesn’t work when it comes to enabling the sale of stolen goods. In December, 20 major retailers, including Home Depot, Best Buy, Walgreens and Kroger, sent a letter to Congress, asking lawmakers to crack down on online marketplaces by requiring stricter verification of sellers. 

“We don’t want people to be selling anonymously,” said Scott Glenn, who leads asset protection at Home Depot. “If we as Home Depot have to understand who our suppliers are, then Amazon, eBay, whoever is selling should also have to understand who their sellers are.”

The House has passed a bill called the INFORM Consumers Act, which would require some sellers on sites such as Amazon, eBay and Meta’s Facebook Marketplace to provide a verifiable bank account, tax ID and…