U.S. Retailers: Congress, Crack Down on eBay

The Internet auction sites should also provide more information about high-volume sellers of goods, they said.

Both Democrats and Republicans on a House of Representatives Judiciary subcommittee said the issue is ripe for legislative attention, noting the retail industry loses more than $30 billion a year from organized theft.

"The size and complexity of this topic shows a need for assistance from the federal government," said Rep. Bobby Scott, chairman of the subcommittee and a Democrat from Virginia.

The lawmakers did not say if legislation would move swiftly in coming weeks on the topic of organized retail crime.

Retailers testifying at the hearing said lawmakers should focus more on preventing organized retail crime rather than cracking down on offenders, which they said is difficult because of limited police resources.

Organized retail theft happens when groups of shoplifters steal vast quantities of goods and typically resell them on Web sites or at flea markets, pawnshops or other stores.

Retailers say gangs of thieves posing as shoppers use diversionary tactics with store clerks, emergency exit doors and foil-lined bags to defeat electronic merchandise tags.

Internet sites have been criticized for helping aid retail thieves by allowing sellers to remain relatively anonymous.

"We need to take a new approach," said Brad Brekke, vice president for assets protection at Target.

"Internet auction sites could make simple changes, making high-volume sellers identify themselves and provide unique product identities."

Robert Chesnut, senior vice president of rules, trust and safety at eBay, said it was reasonable "to think about what we could do about high-volume sellers." But he said sellers are generally nervous about posting their names, addresses and telephone numbers on product listings.

"We're not opposed where it makes sense," he added.

Chesnut said additional disclosure makes more sense in areas such as auto sales and noted that eBay currently requires sellers to provide vehicle identification numbers to cut down on the sale of stolen vehicles on the site.

But requiring sellers to post serial numbers would not be an effective deterrent because they could simply make up numbers, he said.

Chesnut said eBay gets about 1,000 inquiries each year from police about investigations related to stolen goods.

"I believe that number would increase a whole lot if the description of items being posted on the Internet were more detailed and included serial numbers," said David Hill, a detective with the Montgomery County, Maryland Police Department.

Retailers said a critical issue is that Internet auction sites are required to provide seller information only to law enforcement, not to retailers' own investigators.

"Operators of sites such as eBay have historically failed to provide any meaningful information to retail investigators," said Karl Langhorst, director of loss prevention for Randall's and Tom Thumb stores, a division of Safeway.

"Without this cooperation, we are severely hampered in securing the evidence needed by federal investigators to even open an investigation."

The disclosure of more seller information would help deter

retail crime by diminishing the anonymity of thieves, Langhorst said.

"We're focused on loss prevention rather than loss reaction," he added.