California’s Democratic governor Gavin Newsom signed 10 new bills aimed at fighting retail crime in the state.
the package, announced on Fridayincludes new laws to combat shoplifting, theft from a vehicle, organized theft and online shopping where these stolen goods are sometimes resold. The new laws come after retailers called on both local and federal governments to do more to combat retail theft, citing it as a growing challenge affecting profits, customers and staff.
One of the bills in the package, SB 1416, imposes tougher penalties for middlemen in organized retail crime rings and was introduced in response to a CNBC investigation published in March, according to the office of state Sen. Josh Newman, D-W., who introduced the account.
This bill imposes additional jail time and fines for the sale, exchange or return of stolen property – the bread and butter of criminal retail rings. Before the law was passed, those accused of participating in organized retail crime rings could face up to three years in prison. Critics said the penalty and sentence were not enough of a deterrent.
Newman said the law was designed to go after middlemen like Michelle Mack — the “queen” of organized retail crime revealed in the CNBC investigation. Police say he made millions reselling stolen goods on Amazon at a fraction of their typical retail price. Mack was arrested in December and given a delayed sentence of five years and four months.
Mack’s husband, Kenneth, received the same sentence and is already in prison. The couple was ordered to pay about $3 million in restitution to a beauty retailer Ulta and another $13,000 at Sephora, a court official told CNBC.
Theft and organized retail crime rings like Mack’s “California Girls” were cited by retailers as a cause of lower profits, difficulty recruiting and retaining staff, and a degraded in-store experience. Others have disputed these claims, saying retailers are overestimating the impact of theft and downplaying the operational issues behind lower profits.
The rates of commercial burglaries and commercial robberies in California have been steadily increasing in recent years, according to data from the Public Policy Institute of California. Shoplifting, while still well below pre-pandemic levels, is also on the rise.
Since January, the California Patrol’s Organized Retail Crime Task Force has made 884 arrests and recovered more than 250,000 stolen items with a total value of more than $7.2 million, according to the news release announcing the new legislation.
Retailers are urging Congress to crack down on organized retail crime nationwide, with the retail lobby group National Retail Federation pushing to make it easier to prosecute shoplifting as a federal felony.
With the 2024 presidential election looming, so are the Democrats looking to appear tough on crime to counter Republican criticism of the nation’s rising crime rates. But critics of the push to tackle retail crime fear the measures could disproportionately harm marginalized groups.
Another bill, SB 1144, also passed in the new package of laws aims to prevent the trafficking of stolen goods on online marketplaces such as Amazon. the bill, introduced by state Sen. Nancy SkinnerA Democrat, it builds on an earlier California law updating compliance criteria for high-volume, third-party sellers and making it easier to file civil charges against online marketplaces that sell stolen goods, among other measures.
— CNBC’s Gabrielle Fonrouge, Scott Zamost and Courtney Reagan contributed to this report.