CVS Health's director of organized retail crime testified at a Senate committee hearing Tuesday.
He said the average professional thief targeting a CVS Pharmacy steals $2,000 in just two minutes.
Retailers are pointing to e-commerce for the spike in "sophisticated and highly dangerous" crime rings.
Organized retail crime-related events are reported in a CVS Pharmacy store every three minutes. In just two minutes, the average professional thief targeting CVS steals $2,000 worth of goods.
That's according Ben Dugan, the director of organized retail crime and corporate investigations at CVS Health. On Tuesday, he testified alongside fellow retailers at a Senate judiciary committee hearing to discuss the illegal sales of stolen and counterfeit goods online.
It's an issue Dugan has personally investigated for over 30 years - and he said it's only getting worse due to the lack of regulation surrounding online marketplaces such as Amazon and eBay.
"The ease with which online sellers can open and close their sites, essentially undetected, is directly related to this increase in criminal activity in our stores," he told legislators, adding that an estimated $500 billion in illicit stolen and counterfeit goods are sold on third-party marketplaces like Amazon each year.
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"Let me just be clear about what organized retail crime is not. It is not everyday shoplifting," Dugan told the committee. "It is not individuals committing singular opportunistic thefts for personal reasons. It is organized, it is sophisticated, and it is massive in scale."
He said these complex crime rings often begin with a "booster" who steals from stores directly or recruits others to steal for them. The use of a weapon or physical violence during these thefts has more than doubled in the last year and a half, Dugan added.
The booster then delivers the haul to a "fence" who collects and transports the stolen goods to a consolidation site such as a warehouse.
From there, "the stolen goods can be sold directly online to unsuspecting customers, to other third-party sellers (some of whom know the goods are stolen or counterfeit) or distributed to the marketplaces themselves to fulfill orders," he explained.
Crimes like these cost retailers an estimated $45 billion in losses each year, according to the The Coalition of Law Enforcement and Retail.
Until recently, Amazon opposed past legislative efforts aiming to combat the sale of stolen goods online, arguing that some regulations could hurt small online sellers. However, the e-commerce giant voiced its support for the US House version of the INFORM Act last week, citing the "express preemption provision."
The bill's recent addition gives "Amazon and other online marketplaces flexibility in how we stop bad actors" and "will not favor" big-box retailers like Walmart and Home Depot over small businesses, Amazon said.
" ... we strongly support legislative efforts to stop bad actors from harming consumers, including increasing penalties against online criminals and providing greater resources for law enforcement. In addition to our industry-leading efforts to verify a seller's identity and ensure that only authentic and legal products are sold in our store, we've also created our own Counterfeit Crimes Unit to work directly with law enforcement to bring these bad actors to justice," Amazon's Vice President of Public Policy Brian Huseman wrote in a statement.
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