US finance law targets online websites amid retail theft concerns

Retailers are making a profit on the US government bill that will force online marketplaces like Amazon and Facebook to vet high-volume sellers on their platforms as retail crime concerns mount.

Hidden within the $1.7 trillion funding package is a law brick-and-mortar retailers have been pushing Congress for more than a year to curb the amount of merchandise being stolen from their stores and resold online.

Dubbed the INFORM ACT, the bill also aims to tackle the sale of counterfeit goods and dangerous products by forcing online marketplaces to verify various types of information — including bank accounts, tax ID numbers, and contact details — for sellers who are at least 200 Make retail sales and earn at least $5,000 in any given year.

It’s hard to tell how much money retailers are losing to organized retail crime – or if the problem has increased significantly. But the problem has garnered more attention in recent years, as high-profile retail thefts and mass in-store thefts have garnered attention nationwide. Some retailers have also said they are seeing more items being pulled from stores in recent weeks.

Target executives said in November the number of thefts had risen by more than 50%, resulting in a loss of more than $400 million. It is expected to exceed $600 million for the full fiscal year.

And in an interview with CNBC earlier this month, Walmart CEO Doug McMillon noted that thefts at Walmart were higher than in the past and could lead to higher prices and store closures if they continue.

Meanwhile, Joe Parisi, president and chief operating officer of New York grocery chains D’Agostino’s and Gristedes, said the chains are battling increased costs from higher levels of organized crime and have had to double security forces at stores from a year ago. Walgreens, Best Buy, and Home Depot have also pointed out similar problems.

The National Retail Federation, the country’s largest retail group, said its latest safety survey of about 60 retailers found inventory losses — known as shrinkage — averaged 1.4% over the past year, representing a loss of $94.5 billion is equivalent to.

Shrinkage measures losses from sources other than external theft, including employee theft and product damage. Most of the shrinkage – 37% – came from external theft, including products stolen in organized shoplifting, the trade group said. It also found that retailers saw an average 26.5% increase in organized theft over the past year.

The funding package, which includes the bill to contain the problem, passed the US House of Representatives on Friday. It is now up to President Joe Biden to sign the law into law.

Amazon, Ebay and Etsy initially opposed the verification law, saying it would compromise seller privacy and favor brick-and-mortar retailers over their online competitors. The online marketplaces later supported the legislation after some changes, including changes to limit the number of sellers who give out their contact information to customers to those with annual sales of $20,000 or more.

Under the invoice, customers can obtain a seller’s name, phone number, email address, and physical address, with certain exemptions to protect merchants selling goods from their homes. The bill states that sellers will not have to provide their personal address or phone number provided they answer customer questions via email or other forms of online messaging provided by the marketplace.

The federal law would also override similar state laws, a win for e-commerce sites that no longer have to deal with a patchwork of state-level requirements.

AP Business Writer Anne D’Innocenzio contributed to this report.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

Leave a Reply

Your email address will not be published. Required fields are marked *