Skinner: California law could shut down the market for stolen retail goods

State bill requires online marketplaces to ensure that organized theft rings aren't using platforms to fence their loot

We’ve all seen viral videos of smash-and-grab robberies. But have you ever considered that you might have inadvertently purchased an item that was stolen during one of those robberies?

Nowadays, stolen goods are commonly offered up for sale on internet marketplaces such as Facebook Marketplace, OfferUp and Craigslist. And we, the purchaser, often have no way of knowing if the items being sold were stolen. 

The problem is, some online marketplaces don’t verify whether sellers on their sites are legitimate, leaving us in the circumstance where we might unwittingly purchase a stolen good.

And if the item we bought was stolen, there’s a good chance it was stolen by someone working for an organized retail theft ring that directed the person to steal specific items.

Law enforcement and retailers say that’s increasingly how organized retail theft works: The ringleaders of large-scale operations hire and pay “workers” to rob brick-and-mortars stores, and then the ringleaders make millions selling the ill-gotten goods online.

That’s why the Legislature needs to pass SB 1144, commonsense legislation that will curb organized retail theft and ensure that consumers aren’t inadvertently buying items from a smash and grab. Under SB 1144, online marketplaces must ensure that organized theft rings are not using their platforms to fence stolen goods.

SB 1144 is supported by a large coalition of retailers, law enforcement, and cities and counties and is part of the Legislature’s Safer California Plan — a bill package with proven strategies for reducing crime and drug addiction.

Earlier this year, a wealthy Southern California couple became the poster child for modern organized retail theft. The pair allegedly paid people to steal popular beauty products from specific retailers. According to the California Department of Justice, the couple then pocketed more than $8 million selling the stolen products online.

Of course, not everyone uses online marketplaces to unload stolen goods. These marketplaces are a huge part of 21st-century commerce and valuable to millions of Californians, whether to purchase something at an affordable price or sell items we no longer need. 

But online marketplaces are also incentivizing organized retail theft, because without adequate verification of the legitimacy of sellers, theft rings can easily sell stolen goods on online platforms.

SB 1144 is also a follow-up to a 2022 law, SB 301, that established California’s first-in-the-nation regulations of online marketplaces to combat retail theft. Law enforcement and retailers say SB 301 has been effective, but over the past year, organized rings have found a way to circumvent it.

People and businesses that sell lots of items online are known as “high-volume sellers.” Most high-volume sellers are legitimate, but some are organized theft rings. SB 301 was designed to remove theft rings from online marketplaces by requiring high-volume sellers to prove they’re legitimate.

Legitimate businesses have already complied. But organized theft rings have found a way around the rules by merely advertising their stolen goods online and then completing the sale offline, either through an app or in-person.

Under SB 1144, high-volume sellers that advertise online but then complete the sale offline would have to follow the same disclosure rules that high-volume sellers already do under SB 301.

Unfortunately, some online marketplaces oppose SB 1144, contending that they can’t figure out how to identify high-volume sellers that complete transactions offline.

But we find it hard to believe that sophisticated high tech companies can’t determine who is using their sites to advertise large quantities of stolen goods.

Some platforms also claim that SB 1144 will require them to collect private information from all sellers, thus putting their data at risk. But this is false. SB 1144 only applies to high-volume sellers of new or unused goods that complete 200 or more transactions a year, worth $5,000 or more gross revenues.

The opponents’ arguments are also disingenuous because the official privacy policies of online marketplaces such as Craigslist, OfferUp and Facebook Marketplace already require all users to allow the sites to collect lots of personal information.

If SB 1144 becomes law, hopefully online marketplaces will finally partner with us to combat organized retail theft rather than allow smash and grabs to flourish. 

State Sen. Nancy Skinner, D-Berkeley, is the author of SB 1144 and SB 301. Cristine Soto DeBerry is executive director of Prosecutors Alliance Action, a sponsor of SB 1144.