Yesterday, the National Retail Federation came out with its annual Organized Retail Crime survey of big box retailers. Once again, it’s a monument to the old adage about “lies, damn lies, and statistics. This one’s our favorite – straight from the study:
“According to the survey, one-third of retailers believe that more than 50 percent of “new in box” merchandise sold through online auction sites is stolen or fraudulently obtained”
Think about this – the NRF asked its members, who are big box retailers that view online marketplaces as the competition, to guess what percentage of new in-box goods are stolen. Their responses are biased beyond belief and backed with zero evidence or analysis. And despite the retailers’ belief that most goods online are stolen, they reported a big drop in the number who have identified stolen goods sold online.
Other thoughts we had in response to the NRF “study”:
· Despite retailers’ claims that theft is getting worse, nearly 6 in 10 retailers say they now spend less on loss prevention compared to last year. Yet while cutting spending on loss prevention, these same retailers doubled their spending on lobbying over the last three years, according to the Center for Responsive Politics. And they are lobbying for new laws to restrict competition from online sellers.
· A leading loss prevention consultant told retailers that over 2/3 of all store shrink is preventable, mostly by improving business practices, according to Larry Miller, Director of National Retail Research Group.
· Retail theft is not being caused by the Internet. According to the NRF’s survey, retailers don’t identify stolen goods online any more than in traditional places like street corners, swap meets, and pawn shops.
· The NRF says that criminals use online marketplaces because they are anonymous, but these sites know exactly who the seller is, and disclose all that data to law enforcement officials whenever they ask. The truth is, an online auction is the last place a criminal would try to hide the sale of stolen goods.
· The NRF claims that online sellers “threaten the health and safety of innocent consumers”, yet Rite Aid, CVS, Target, and Walgreens have paid millions in fines for selling expired products—often by putting stickers over the expiration dates.
· Overall, there is no evidence that organized retail crime has actually gone up — the study only asks retailers whether they think
it has increased. And that perception has only increased over the last two years — concurrent with the worst economic downturn since the Great Depression.
Isn’t it much more likely that any increase in store theft may be a result of employees and consumers desperate to make ends meet?
As we’ve said again and again, while the NRF likes to say that they are concerned with loss prevention, we believe this is really about competition prevention. They’ve gone so far as to paint millions of hard-working Americans who’ve sold goods online as drug-addicted criminals.
And the NRF has lobbied hard for federal legislation that would let any retailer force online marketplaces to interrogate their sellers about how they legally acquired the stuff they’re selling. Big-box retailers want this information so they can stop their suppliers from helping small online competitors offer discount prices to shoppers around the country.
Just this week, we included the NRF’s preferred federal legislation on our iAWFUL tally of the worst proposed Internet laws in America.
As the battle over organized retail crime heats up in Congress, we’ll be watching and acting to shine the spotlight on the NRF’s anti- competitive tactics.