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Finding the Fencers of Stolen Retail Goods

07/09/2013 - 

A Stop Organized Retail Crime’s (StopORC) webinar offered its attendees insight into tools they can use to spot the stolen merchandise being fenced on Internet sites such as eBay, Craigslist, Amazon, and others. StopORC, which is sponsored by Universal Surveillance Systems, LLC, is a nonprofit, noncommercial group that combats organized retail crime through information sharing, education, and advocacy. It holds a monthly webinar on issues relating to organized retail crime.

Nelson Harrah, director of organized retail crime for Gap, Inc., and a member of StopORC’s Advisory Council, moderated the webinar, which featured a presentation on identifying fencers by David DiSilva, manager of global asset protection at eBay, Inc. 

Harrah began by asking webinar participants a question: “How often does your company check online for items stolen from your stores?” The disheartening answer that he revealed at the webinar’s conclusion was that most of the individuals who were listening in responded that their employers were not checking at all or only infrequently.

DiSilva said that ORC investigators should be more diligent in looking for the individuals stealing and fencing their company’s goods. Investigators must start by partnering with the store’s merchandise buyers to be notified of product launch dates, hot new products, grand openings, and product giveaways. A partnership should also be developed with the marketing department so that the investigator can learn about customer loyalty and reward programs or the launch date of coupons. In the case of the latter, for example, sometimes extreme couponers buy large quantities of merchandise completely legally that have a good resale value, he explained.

Investigators should also partner with the inventory and shortage control teams to understand the product life cycle from the purchase order of the product sent to its manufacturer to the use of jobbers to sell the unsold goods overseas. Today, he noted, many retailers are using eBay to move their unsold merchandise rather than contract with a jobber, so investigators should make sure that suspicious listings are not emanating from the company itself.

DiSilva then walked attendees through different sites that can assist investigators in finding outliers—such as listings for a particular item that are far below or far above the retail price, which can indicate fencing. DiSilva first reviewed the search tools of his own company, eBay, showing participants live onscreen how to search via differing criteria. “You can pull up all the products and listings that do not comply with the price you would expect it to be sold at,” he said.

One of his favorite tools, DiSilva revealed, is, a free site that lets users search for any items that are priced at $75 or above. “The reporting returns the current average list pricing and recently ended auctions with averages of price listings and duration. The outliers of current listings are plotted on a scatter graph that is interactive,” said DiSilva.

As an example, DiSilva chose a hand drill made by DeWalt. Normally, he explained, a the drill would sell for $158.50. When he entered this into thepricegeek site, it returned an interactive scattergraph that showed that the average sale price for past and current listings was $153.50, but showed some sales at less than $100 and some for more than $200. Clicking on one of the scattergraph’s dots takes the user to the actual listings. “This is very helpful to show you who to zero in on,” DiSilva stated.

Another tool is, which costs $300 per year and only gives access to eBay information. However, it can provide investigators with complete listings by product, seller ID, and category going back one year. Through a reporting function, it can provide by e-mail to the investigator all of the top sellers of the specified merchandise daily, weekly, or monthly. “It gives you a really good idea of what a seller looks like. And you can also see all the rest of the items the seller is selling. This might show a lot of other high-shrink items. If you can’t figure out how they got this product at that price and that quantity, you may have good lead,” DiSilva said.

He next discussed ORC Workbench, a subscription-based site that provides a site search and case-management tool that has the ability to locate seller listings by city, state, or zip code. It can search within a half-mile of a particular store and focus in on individuals selling the product within that area. It also features a case management system and a “white-listing” function for sellers who have been previously considered suspicious, but have been proven to be honest. By white-listing them, the sellers will not appear in future searches the investigator may undertake.

A final online tool was Adhuntr, which is free, can search sites such as Amazon, eBay, and Craigslist. After users enter a product description, Adhuntr redirects them to current listings on the site.

“So you’ve done all this research and you’ve found some sellers who may be involved in criminal activity,” DiSilva explained. The next step is to “calculate the profitability of the seller” using theknown cost of the goods, the cost to list the items on various sites (all of which usually charge a fee), the cost to ship, and the sales volume and price of the merchandise sold to determine if the pricing is realistic and sustainable.

DiSilva discussed several online profitability calculators, explaining that if the process shows a loss on substantial volume, the individual may be a criminal seller. “Once you’ve populated the calculator with the best data you have available, you’ll have a good understanding of whether this seller has a business plan that works or one that smells funny,” he said.

DiSilva noted that even when a seller appears to be fencing goods, further investigation may show that nothing illegal is occurring. “One outlier case ended up being auctions held by the U.S. Postal Service on mis-ships that they could not deliver to the proper sender.” The Postal Service and other freight shippers commonly have the right to auction goods that cannot be delivered after repeated attempts.

When asked by a virtual attendee what percentage of ORC cases end up being stolen merchandise, DiSilva said there was no real answer. And as to how many are prosecuted, the truth seems to be not many, and sometimes the fault for that lies with the investigators.  “At eBay, we work with 300 plus retailers, and through the course of the work, we know that there is a dramatic difference in the way some handle investigations before bringing cases to us. The folks who provide us with great information—then the chance for going to law enforcement and getting a successful prosecution is greater. If they come to us with poor information, the hit rate is very low—far below five percent. Everyone has limited resources. When retailers call, the team at eBay takes everything seriously and wants to resolve it. But time is not spent wisely chasing ghosts,” he said.

By providing this webinar on tools to help ORC investigators identify fencers, “We want to show you ways of eliminating false positives so we can spend more time with retailers who provide well-researched material,” DiSilva stated.

Photo credit: from flickr by robinsonsmay