Spending bill could help retailers struggling with theft
Retailers are scoring one win in the government-wide spending bill, which will force online marketplaces like Amazon and Facebook to verify high-volume sellers on their platforms amid heightened concerns about retail crime.
Tucked into the $1.7-trillion funding package is a piece of legislation that brick-and-mortar retailers have been pushing Congress to pass for more than a year, part of an effort to tamp down the amount of goods being stolen from stores and resold online.
The bill — known as the Integrity, Notification, and Fairness in Online Retail Marketplaces (INFORM) Consumers Act — also seeks to combat sales of counterfeit goods and dangerous products by compelling online marketplaces to verify various types of information — bank account, tax ID and contact details — for sellers who make at least 200 unique sales and earn a minimum of $5,000 in a year.
It’s difficult to parse out how much money retailers are losing due to organized retail crime — or if the problem has substantially increased. But the issue has received more notice in the last few years as smash-andgrab thefts and mass shoplifting events have grabbed national attention. Additionally, some retailers have said in recent weeks that they’re seeing more items being taken from stores.
Executives for Target said in November that the number of thefts had gone up more than 50%, resulting in more than $400 million in losses. Losses are expected to be more than $600 million for the full fiscal year.
In an interview with CNBC earlier this month, Walmart Chief Executive Doug McMillon noted that theft at the chain was higher than it has historically been and could lead to higher prices and store closures if it persists.
Joe Parisi, president and chief operating officer of New York City’s D’Agostino’s and Gristedes grocers, said the chains are fighting increased costs from higher levels of organized crime and have had to double the number of security guards at stores from a year ago.
Walgreens, Best Buy and Home Depot have pointed out similar problems.
The National Retail Federation, the nation’s largest retail trade group, said its latest security survey of roughly 60 retailers found that inventory loss — called “shrink” — clocked in at an average rate of 1.4% last year, representing $94.5 billion in losses.
The funding package that contains the INFORM Consumers Act passed the U.S. Senate on Thursday and passed the House on Friday.
Amazon, EBay and Etsy initially opposed the verification bill, saying it would damage seller privacy and favor brick-and-mortar retailers over their online competitors.
The online marketplaces later threw their support behind the legislation after some changes, including modifications to limit the amount of sellers who disclose their contact information to customers to those making $20,000 or more in annual revenue.
Under the bill, customers can get a seller’s name, phone number, email and physical address, with certain exceptions to protect merchants who sell goods from their homes.
The bill says sellers don’t have to disclose their personal address or phone number, provided they respond to customer questions over email or other forms of online messaging provided by the marketplace.
The federal bill would override similar state laws — a win for e-commerce sites that no longer have to deal with a patchwork of statelevel requirements.
Meta, which operates Facebook Marketplace, didn’t reply to a request for comment regarding the legislation.