eBay Steps Up to Defend Retail Businesses

Online auction giant eBay has joined forces with the NRF (National Retail Federation) to fight against organized theft of retail goods. With support from the FBI (Federal Bureau of Investigation), the alliance will cooperate to work with retail partners and law enforcement to identify and thwart criminal retail rings.

The efforts by eBay may not have much effect on the more casual or petty shoplifting that inevitably occurs at retail businesses. Instead, the effort will target organized crime, which is responsible for a significant and growing amount of retail theft.

A joint statement from eBay and the NRF states "In an NRF survey conducted in 2009, 92 percent of retailers said they were victimized by organized retail crime within the past year, and nearly three-fourths (73 percent) also reported the level of organized retail crime activity had increased."

Paul Jones, global director of asset protection for eBay, is quoted in the statement, saying "NRF has done a great job of shining a spotlight on the issue of organized retail crime, but retailers cannot fight this problem alone."

eBay established itself by providing an online forum for individuals to buy and sell items via auction--typically the sort of "empty out your attic" stuff you might find in garage sales. Over time, eBay has largely outgrown this model, becoming more of an online outlet for brick-and-mortar stores and larger online interests.

One thing about the auction business model--particularly as it relates to rare items and collectibles--is that items are only as valuable as the winning bid makes them. An autographed rookie Michael Jordan trading card is worth something only if you find someone who values it enough to exchange money for a piece of cardboard with a photo on it.

The same thing is true for stolen goods. The thief typically doesn't really want the stolen goods; the thief wants the money the stolen goods are perceived to be worth. That is where a site like eBay comes in. eBay provides a venue where criminals can fence stolen goods, while hiding behind the anonymity of the Web.

Like malware, though, the business model of stealing goods en masse from brick-and-mortar retail establishments and auctioning them off online has evolved from petty theft into organized crime. According to a report from the Center for Retail Research, retail theft, dubbed "shrink", accounted for nearly $115 billion in losses for retail businesses last year--costing families nearly $210 each.

eBay's Jones summed up with "Through this partnership, NRF and eBay are putting criminals on notice that they will no longer be able to steal from retailers and abuse the online marketplace for profit."

Tony Bradley is co-author of Unified Communications for Dummies . He tweets as @Tony_BradleyPCW . You can follow him on his Facebook page , or contact him by email at tony_bradley@pcworld.com .

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