Investigating online sellers can be much more efficient, and productive when pairing investigative skills with those of eBay PROACT Investigators. While criminals use many online venues to sell stolen goods, eBay has been the clear Internet industry leader in working cooperatively and effectively with retail investigators to tackle this problem. Following is a case review that involved a four-hour total time investment to identify the suspect, develop the case, and interview the suspect.
This recent case involved inventory shortages involving Lego and hardcover new release books that led to an elderly eBay seller who had flown under the radar for years. However, the total time spent on this investigation could be summed up by the old adage—"All in a day's work." Mind you, when traveling extensively to multiple markets, a good shoplifter can go years without being noticed or recognized as a habitual player in the world of ORC. The threat is real, and no retailer is exempt; though some experience higher rates of theft based on product line and demand.
We use a software application that enables an investigator to quickly identify and assemble cases on suspect online sellers. Using this software, Barnes & Noble investigators identified a suspicious seller and in 17 minutes had developed an investigative profile that provided all the crucial elements necessary, including seller identity, location, criminal history, and sales history.
The PROACT team was consulted for their opinion only after our vetting process confirmed it was impossible to have obtained the product at a discount low enough to allow for profits. Additional and necessary details revealed the true extent of this seller's activity dating back several years.
Based on the facts, the seller was approached, interviewed, and confessed to theft activity dating back six years. Our investigation uncovered a sustained annualized rate of loss of $150,000 and an aggregate total loss over $800,000.
Within two weeks of closing this case, the U.S. Secret Service and U.S. Attorney's office accepted the case for prosecution. The supporting evidence presented included the written and video-taped statements, recovered stolen product, inventory records, and eBay sales history, all of which helped secure this outcome.
The B&N Investigative Approach
The above example is illustrative of how the Barnes & Noble investigations team has been productive over the years, largely due to the unique approach taken when addressing prolific shoplifting and ORC activity; effectively taking the fight to the bad guys when all the signs of criminal activity are present. If your bad guy happens to be selling on eBay, a good relationship with the PROACT team is invaluable as they can provide additional insight that may help guide you to successful resolution.
Online criminal sellers often telegraph their nefarious activities when listing items for sale. Listing items as "Brand New" while below your company's cost is a sign the product could be stolen. However, you must have a clear understanding of your merchandise lifecycle from purchase order through markdowns and mark out-of-stock. There are legitimate avenues a seller may use to obtain low-cost merchandise. Understanding those avenues and the specifics of the supply chain will help to reduce time spent chasing red herrings.
Barnes & Noble investigators use a multi-step "vetting out" process before making a decision to investigate and ultimately interview suspects. There are literally millions of sellers posting millions of auctions daily, so investigators must carefully choose the battles they fight. Spending precious time and resources investigating sellers before properly weighing the facts is counterproductive. When conducted effectively, the entire vetting process can be accomplished quickly by a seasoned investigator. The attributes we evaluate prior to committing to an investigation are:
• Selling categories
• Multiple quantities of the same item
• Selling price
• Our inventory shortages and location vs. listings
• Total percent of seller listings (current and closed) relative to our retail sector
• Feedback scores
• 90-day completed listings
• Auction history
• Current listings of multiples
• Selling categories
• Auction history
Profitability Equation (backing out costs vs. reasonable cost)
• Selling price
• Shipping costs (packaging and postage if free shipping)
• Listing fees
Understanding these elements paints a clearer picture of the seller and the likelihood, or not, of their involvement in criminal activities. We look for consistencies with pricing and product line to further support the likelihood of stolen merchandise. An experienced investigator can usually determine what legitimate venues could provide the seller with this product that allows them to sell it at such deep discounts online—a very important step; do not overlook.
80 Percent Prosecution Rate
Over the years, Barnes & Noble has identified and addressed hundreds of prolific shoplifters through a refined and efficient process that averages two to three days from start to finish. For those that have conducted such investigations, law enforcement partnership can be a challenge. Yet Barnes & Noble boasts an 80 percent prosecution rate due to a strict focus on dotting the "I"s and crossing the "T"s on the front-end. Any great investigator realizes the value of gaining intelligence and understanding the playing field.
Nothing complements a great case better than, first, a great written statement and, second, world-class report narrative and supporting documents, such as inventory records and incident reports, which are often pulled together after the interview.
The process itself is three-dimensional. How you package a case for law enforcement will most definitely impact the prosecution rate and future decisions by that same agency to accept your cases or not.
The relationship we share with eBay has helped to streamline our investigative process. We value this relationship and encourage all retailers to work together with eBay in closing cases.
About the Author
Scott Sanford is currently employed by Barnes & Noble, Inc. (New York, NY) as the director of investigations and training. He has spent twenty-five years in retail loss prevention working in various settings to include general merchandise, soft-lines, pharmacy, sporting goods and home improvement. Over the past 8-years, Sanford and his team have developed a highly successful ORC investigative strategy, with a concentration on prolific shoplifters that engage in online sales of stolen goods.