Companies battle theft rings ; Billions of dollars a year lost in crime

With frosted, unmarked windows and no sign hanging from the storefront, Target's retail crime investigations center doesn't even look like it is being used.

But inside, analysts and investigators are poring over footagefrom surveillance cameras and inventory spreadsheets. They aresearching for leads on theft rings that have replaced old-schoolshoplifters with sophisticated criminals.

It's a battle where major U.S. retailers are struggling to gain ground. While retailers spend $12 billion a year to battle organized retail crime, thieves pilfer $15 billion to $30 billion annually, a huge blow to businesses and, ultimately, their customers.

"These are sophisticated crime rings," said Mike Erlandson, who heads government relations for Supervalu grocery stores. "They know what to steal and how much to steal."

Target has responded by opening several crime centers across the country. The center in suburban Baltimore recently helped break a ring of 14 people who stole $20 million in merchandise from several retailers over a three-year period. Despite such victories, organized retail crime persists today, in part, because the Internet makes it easier than ever to dispose of stolen merchandise.

Thieves snag popular, easy-to-move items -- everything fromEnfamil baby formula to Gillette razors to Olay lotion, often bythe case. They work fast and efficiently, snatching a couple ofDyson vacuum cleaners and busting out the fire doors of stores intowaiting getaway cars.

"We're talking about people who steal for a living," said Mike Serio, who leads Target's Maryland crime center.

When it's time to turn the loot into cash, the crime rings go online. Anonymity and a worldwide market make Internet sales safer than ever for criminals, retailers contend -- safe enough that some crime rings take pre-orders, confident that they can steal what's in demand.

"The ease of selling on the Internet has made for crime waves," Erlandson said.

For that reason, Target, Supervalu, Walmart and other retailersare pushing federal legislation to fight what they call "e-fencing." Online markets make retail crime too "low risk, highreward," said Brad Brekke, corporate vice president for lossprevention at Target, the No. 2 U.S. retailer.

"It's much easier to deal in stolen property than to deal drugs."

Retailers' efforts to curtail the online sales of stolen goodshave created a political tussle against Internet companies, withboth sides coordinating strong lobbying efforts.

To date, the online industry has fought off bills introduced in Congress in 2009 and 2010 that, among other things, would have required eBay, Amazon.com and other online brokers to keep serial numbers of certain items and reveal records of high-volume sellers to businesses that suspect those sellers traffic in their stolen goods.

"We have 94.5 million active users," said Paul Jones, a former retail executive who now directs global asset protection for eBay. "They're saying, 'You now need to put their names and addresses out there because of a small number of bad actors.' That would be like retailers making customers wear name tags when they come into a store."

Amazon.com didn't respond to a request for comment.

Jones disputes the notion that the ease of selling stolen goods online has spurred more retail crime. Overall, retail theft seems to be going down, not up, Jones maintained.

A 2010 survey by the National Retail Federation showed that 90 percent of those questioned believed they had been victims of organized retail crime in the previous 12 months, and 59 percent felt there had been an increase from the previous year. That compared with 92 percent and 73 percent, respectively, in 2009.

Supported by retailers and eBay, a bill that would haveestablished an Organized Retail Theft Investigation and ProsecutionUnit in the U.S. Department of Justice passed the U.S. House in2010. It died from inaction in the Senate Judiciary Committee.

However, political diplomacy inevitably seems to break downaround codified accountability for online markets. And that,retailers insist, is the only thing that can really deter e-fencing.