NEW YORK — Over the past year, retailers and eBay have become allies in the fight against organized retail crime, transforming a relationship that had been contentious at times.
EBay, along with other online auction sites, has been a conduit through which ORC gangs have been able to sell stolen goods, often getting 70 cents on the dollar, according to the National Retail Federation, Washington. NRF and its retail members criticized eBay for not providing retailers with the names, addresses and email addresses of eBay sellers suspected of e-fencing on eBay. EBay countered that it was being unfairly blamed.
But since announcing a partnership last March, eBay and NRF have become supportive of each other, and retailers have followed suit. “We're now joined at the hip with eBay,” said Dennis Dansak, corporate manager, organized retail crime, Kroger Co., during a session earlier this month at the National Retail Federation's 100th Annual Convention & Expo here. “We contact eBay weekly, if not daily.”
In particular, Dansak said, eBay helps Kroger identify its products online and provides the company with PayPal accounts and ATM accounts, indicating how much money can be held in PayPal. That is far more than other online marketplaces have been willing to do, he added.
John Mearls, eBay's senior manager, global asset protection, acknowledged at the NRF session that “we needed to change our approach to the ORC issue and our relationship with retailers.” That approach began to change in mid-2009 when eBay hired Paul Jones, former vice president of asset protection at the Retail Industry Leaders Association (RILA), to be eBay's global director of retail partnerships. “Paul educated our internal business partners on these issues,” said Mearls.
Under the partnership that eBay formed with NRF last year, the groups agreed to expand eBay's PROACT program, which works with retailers to address ORC. This year, the program has more than 285 retail members, compared with 44 last year, and five investigators compared to one last year, Mearls said.
Among the efforts eBay has been making to address e-fencing has been to develop “robust exception reporting directed toward stolen goods,” said Mearls. In particular, over the past six months eBay has installed 17 “filters” based on quantity and dollar amounts. “Any action that hits the filters is directed to PROACT investigators,” said Mearls. “This has been generating great leads for us that we're sharing with retailers as well.”
Last fall, eBay rolled out additional initiatives aimed at matching the online identity of sellers to their offline identity, placing limits on the quantity of items sellers could list on eBay, and keeping individuals previously suspended from the site from returning. Sellers that don't meet ID requirements can be restricted in the quantity and dollar amount they can sell over a 30-day period. EBay also launched an initiative for its PayPal subsidiary whereby it can restrict the funds in a new seller's PayPal account for 21 days after a transaction.
EBay has made access to information easier for law enforcement to obtain through its law enforcement portal. The auction site is also running a test giving access to the portal to 10 retailers in what is called PROACT Plus. The latest twist that would expedite transfer of data to law enforcement is called the law enforcement e-request system.
“We've come a long way,” Mearls said. “But we have a long way to go, and we're committed to doing it.”