Just as the record labels like to blame file sharing for their own business model problems, big retailers have been trying to blame eBay for all sorts of their problems for years. Last summer, the National Retail Federation (NRF), who represents the lobbying interests of big retail stores, started peddling a patently ridiculous line that using eBay led to crime
. Seriously. They claimed that people got so addicted to selling stuff on eBay, once they ran out of their own things to sell, they would start stealing. Why even paraphrase it? Let's use their words:
"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."
The problem, of course, is that this is complete hogwash. They presented no evidence whatsoever on this, and the actual stats
on retail theft showed two things: first, retail theft has been on the decline for years and, two, that most retail theft is due to insiders, not shoplifters. So, if the retailers really wanted to stop theft, they should invest in better security against insiders. Yet, when asked why they didn't do this, a representative claimed that it didn't make any sense to make their employees into police officers. Yet it does make sense to pass draconian laws against eBay?
The truth is that the retailers aren't scared about eBay leading to shoplifting. They're scared about eBay, period. And they want to pass any laws to hurt eBay.
Of course, when presented with the fact that their claims were ludicrous, the NRF refused to back down
, insisting its statements were accurate -- not in telling the actual truth, but in "reflecting the sentiments of many retailers that we work with." Seriously.
And, of course, politicians don't bother with fact, either, so the NRF was able to push legislation
specifically designed to harm eBay and other online retailers, by adding all sorts of restrictions and liability over what can be sold through those sites. Of course, the NRF still has no evidence to back up its claims... so it looks like it's decided to try to manufacture some.
It recently came out with a report that pretends to show evidence that eBay leads to shoplifting
. What's the data? Well, the NRF asked its own members what they thought
the percentage of "new in box" merchandise for sale on eBay was stolen, and those members said they thought
it was 50%. That's not evidence. That's just "reflecting" the highly biased "sentiments" of the NRF's members. As the NetChoice link above shows, there are lots of other problems with the NRF's position:
- Despite retailers' claims that theft is getting worse, nearly 6 in 10 retailers say they now spend less on loss prevention compared to last year. Yet while cutting spending on loss prevention, these same retailers doubled their spending on lobbying over the last three years, according to the Center for Responsive Politics. And they are lobbying for new laws to restrict competition from online sellers.
- A leading loss prevention consultant told retailers that over 2/3 of all store shrink is preventable, mostly by improving business practices, according to Larry Miller, Director of National Retail Research Group.
- Retail theft is not being caused by the Internet. According to the NRF's survey, retailers don’t identify stolen goods online any more than in traditional places like street corners, swap meets, and pawn shops.
- The NRF says that criminals use online marketplaces because they are anonymous, but these sites know exactly who the seller is, and disclose all that data to law enforcement officials whenever they ask. The truth is, an online auction is the last place a criminal would try to hide the sale of stolen goods.
- The NRF claims that online sellers "threaten the health and safety of innocent consumers", yet Rite Aid, CVS, Target, and Walgreens have paid millions in fines for selling expired products--often by putting stickers over the expiration dates.
- Overall, there is no evidence that organized retail crime has actually gone up -- the study only asks retailers whether they think it has increased. And that perception has only increased over the last two years -- concurrent with the worst economic downturn since the Great Depression. Isn't it much more likely that any increase in store theft may be a result of employees and consumers desperate to make ends meet?
That first bullet point, of course, is the most telling of all. While all of the evidence points to the fact that its insiders who cause the majority of any problem, rather than spending on dealing with that, they've massively increased their lobbying spend to try to craft anti-eBay laws.