The Average American Family Will Pay More Than $500 Annually in Additional Costs Due to Increased Prices Caused by Organized Retail Crime

WASHINGTON, D.C. — U.S. Representative Abigail Spanberger today pressed online retailers — including Amazon, eBay, and Facebook Marketplace — for information on their efforts to curb the resale of stolen goods.

Consumers, communities, and businesses bear the costs of rising prices due to organized retail crime and supply chain crime. In Virginia, $1.3 billion in merchandise is stolen annually — contributing to more than 12,000 lost jobs and more than $80 million in lost tax revenue. According to U.S. Department of Homeland Security estimates, the average American family will pay more than $500 each year in additional costs due to organized retail crime. Organized retail crime and cargo theft is largely perpetrated by sophisticated criminal organizations who steal merchandise from brick-and-mortar retailers, rails, motor carriers, ports, and intermodal systems and then resell those stolen goods for profit, often on third-party marketplaces. Criminals often exploit e-commerce platforms to offload these illicit goods with relative anonymity — creating front companies on online platforms to advertise stolen goods for resale.

In letters sent to Amazon CEO Andy Jassy, Facebook CEO Mark Zuckerberg, and eBay CEO Jamie Iannone, Spanberger pressed the companies to provide an estimate of the average annual sales and profit earned by third parties selling stolen goods on their platforms. The Congresswoman also urged the CEOs to detail their follow-up enforcement actions and methods to catalog and retain customer complaint data. Additionally, Spanberger requested information related to steps these leaders are taking to enhance anti-money laundering (AML) and counter-terrorist financing (CTF) programs to report supply chain theft on their platforms.

“Organized retail crime (ORC) and cargo theft continues to skyrocket, and it is evident that stopping these criminal enterprises will require the full cooperation of all impacted parties,” said Spanberger. “Supply chain theft and ORC has detrimental financial impacts for businesses, consumers, and our economy, due to increased security expenses, labor costs, repairs/replacements, and lost revenue. Lost profit leads to a subsequent reduction in tax revenue. Specifically, ORC costs federal and state governments nearly $15 billion in lost tax revenue, not including lost sales taxes. This ultimately harms the consumer.”

Spanberger continued, “A report conducted by the Association of Certified Anti-Money Laundering Specialists (ACAMS), in coordination with the Department of Homeland Security (DHS) Homeland Security Investigations (HSI) states that online marketplaces should continue to reasonably enhance anti-money laundering (AML) and counter-terrorist financing (CTF) programs to detect and report illicit proceeds garnered from supply chain theft. Not to mention this joint report further highlights the profits from these illegal activities are used for other heinous crimes such as human trafficking, drug and gun smuggling and terrorism.”

The Spanberger-led effort is supported by the Virginia Retail Federation, which represents businesses along Virginia’s retail supply chain.

“Ensuring the safety of our employees in our stores by curtailing organized retail crime (ORC) and supply chain theft is a top priority for the Virginia Retail Federation and its members across the Commonwealth. With the proliferation of this issue across the country in recent years, Virginia’s large and small retailers have seen a direct and adverse impact,” said Jodi Roth, Director of Government Affairs, Virginia Retail Federation. “Retailers have experienced the detrimental financial effects of ORC and supply chain theft and increased violent incidents in connection with these sophisticated criminal enterprises. We know more work needs to be done, and we are pleased to see our federal leaders stepping up to support local law enforcement to tackle this pressing issue for their constituents and Virginia communities.”

Spanberger also backed the Safeguarding our Supply Chains Act to address rising supply chain fraud and theft. Specifically, this bipartisan legislation would improve federal coordination to help crack down on supply chain theft by establishing a Supply Chain Crime Coordination Center within Homeland Security Investigations (HSI) at the U.S. Department of Homeland Security and a Supply Chain and Theft Task Force led by HSI and the Federal Bureau of Investigation (FBI).

Click here to read all three letters, and the full text of the letter to Amazon CEO Andy Jassy is below.

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Dear Mr. Jassy,

I write to inquire about Amazon’s current actions to curb the resale of stolen goods through its platform. Organized retail crime (ORC) and cargo theft continues to skyrocket, and it is evident that stopping these criminal enterprises will require the full cooperation of all impacted parties. As such, I appreciate your further commitment to working with Congress, law enforcement, and other impacted industries, to deter these bad actors.

ORC and cargo theft is largely perpetrated by sophisticated criminal organizations who steal merchandise from brick-and-mortar retailers, rails, motor carriers, ports, and intermodal systems and then resell those stolen goods for profit, often on third-party marketplaces. Concerningly, ORC has continued to increase year-over-year, accounting for $112.1 billion in losses in 2022. Likewise, cargo theft has resulted in significant financial losses for the rail and trucking industries. The Association of American Railroads (AAR) reported that total loss and damage claims associated with theft paid by the Class I railroads increased more than 140 percent between 2020 and 2021. Similarly, the trucking industry saw $68.5 million in stolen freight in the second quarter of 2024, a 33 percent increase compared to the same period last year.

Supply chain theft and ORC has detrimental financial impacts for businesses, consumers, and our economy, due to increased security expenses, labor costs, repairs/replacements, and lost revenue. Lost profit leads to a subsequent reduction in tax revenue. Specifically, ORC costs federal and state governments nearly $15 billion in lost tax revenue, not including lost sales taxes. This ultimately harms the consumer. It is estimated that the average American family will pay more than $500 annually in additional costs due increased prices to offset lost revenue.

E-commerce platforms play a vital role in connecting legitimate small businesses to larger consumer bases. However, criminals often exploit e-commerce platforms to offload illicit goods with relative anonymity. These criminals typically create front companies on online platforms to advertise stolen goods for resale. They also leverage sophisticated methods, or at times professional money launderers, to further disguise their identities.

Congress has taken action to address this, passing the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act). This law requires online marketplaces to collect, verify, and disclose certain information about high-volume third-party sellers offering new or unused consumer products. It also established a method to allow consumers to report suspicious conduct concerning high-volume third-party sellers. Under this law, if a seller is uncompliant and does not provide requested information, all sales activity must be suspended. I appreciate your work to comply with the INFORM Consumers Act.

Still, compliance with the INFORM Consumers Act is just one step in curtailing these criminals. A report conducted by the Association of Certified Anti-Money Laundering Specialists (ACAMS), in coordination with the Department of Homeland Security (DHS) Homeland Security Investigations (HSI) states that online marketplaces should continue to reasonably enhance anti-money laundering (AML) and counter-terrorist financing (CTF) programs to detect and report illicit proceeds garnered from supply chain theft.5 Not to mention this joint report further highlights the profits from these illegal activities are used for other heinous crimes such as human trafficking, drug and gun smuggling and terrorism. Thus, while I understand the complexities of regulating this market, the notable proliferation of ORC and supply chain theft means every sector must step up its enforcement.

To appropriately respond to the ongoing threat supply chain theft and ORC poses, it is critical that Congress has all the information available to construct solutions. As such, please provide answers to the following questions.

• Please describe follow up actions taken after a seller is suspended for suspicious activity, including any referrals to law enforcement, government agencies, or the affected industry.
• Please describe follow up actions taken after a consumer reports a suspicious activity, including any referrals to law enforcement, government agencies, or the affected industry.
• Please provide information on how your catalogue and retain consumer complaint data that is acquired through the information portal required by the INFORM law, including how the customer long data is retained, and if it is shared with the Federal Trade Commission.
• Please provide how many employees are dedicated to specifically monitoring third party sellers to ensure they are compliant with the INFORM law and are not selling stolen goods (excluding counterfeit goods).
• Please provide an estimate of the average annual sales and profit earned by third parties selling stolen goods on your e-commerce platform.
• Please provide information on any program that provides restitution to retailers after goods are determined to be stolen and sold on your e-commerce platform.
• Please describe steps, if any, your platform is taking to enhance anti-money laundering (AML) and counter-terrorist financing (CTF) programs.
• Please describe legislative solutions that Congress should take to enhance the ability for online marketplaces to address and prevent the exploitation of your platforms for the sale of illicit goods.

Thank you for your cooperation in providing information to help deter these criminals. I appreciate your shared commitment to protecting American consumers and businesses.

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BACKGROUND

In 2022, Spanberger voted with a bipartisan majority of the U.S. House to pass the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act to require online marketplaces to collect, verify, and disclose certain information about high-volume third-party sellers offering new or unused consumer products. The legislation also established a method to allow consumers to report suspicious conduct on these platforms.

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