COVID-19 is being characterized as an “unprecedented buying opportunity” for resellers, with brands scrambling to off-load unsold garments and accessories that are piling up in their stores and warehouses as consumer spending continues to remain extremely low. Already faced with an influx of otherwise coveted merchandise that has been difficult for brands to move due to sweeping non-essential business closure mandates and a larger focus by consumers on essential items, these same companies are now expected to have a new type of product in the mix: stolen goods tied to the lootings that have been taking place in cities across the country.
“High-end sneakers and other luxury goods have been targets of choice for thieves amid the unrest in cities across the nation on recent nights, as small groups of troublemakers took advantage of mostly peaceful demonstrations protesting the death of George Floyd, an unarmed black man, while in Minneapolis police custody,” the Los Angeles Times reported this week, as images of smash-and-grab looting of the Soho, New York outposts of brands, such as Gucci, Chanel, Dolce & Gabbana, and adidas circulated over the weekend.
At the same time, on Beverly Hills, California’s ritzy Rodeo Drive shopping avenue, the windows of the Prada and Alexander McQueen stores, among those of other big names, were destroyed and the shelves wiped clean of pricey products by small bands of violent actors during the recent and in many places, still ongoing protests.
With millions of dollars’ worth of stolen luxury goods at large, at least some of the looters will seek to offload those products by way of websites, such as The RealReal and its streetwear-centric equivalent StockX, in exchange for a cut of the sale, thereby, making these resale sites the potential source of profit for a new crop of bad actors.
Faced with such a reality, no shortage of resale companies say that they will be working overtime – and in fact, are already, actively looking for suspect products – to ensure that stolen goods do not find their way into their marketplaces. But in reality, looters who aim to rely to resale sites to get rid of their newly-acquired goods are not the only ones that would profit in such a situation. The resale sites, themselves – which usually either buy items outright from consumers (or brands) and add the profit to their books or sell the items on consignment and keep a percentage of the sale, giving the rest to the seller – stand to profit from such activity given that they would be taking a sizable cut of the sale price.
As a result, the situation becomes a bit murky, given the potential incentive for resellers to generate some quick revenue from a seemingly ensured pipeline of products, particularly given that fashion and luxury sales have plummeted for businesses across the board – from brands, themselves, and department stores to resale companies – as a result of the onset and enduring impact of the coronavirus.
The RealReal, one of the largest players in the luxury consignment market, is adamant that it will block the sale of stolen goods from its site. The 9-year old company maintains specific terms in connection with how it treats stolen merchandise, alerting users that it “is subject to laws and regulations relating to claims that consigned items are counterfeit, have been stolen, or otherwise violate applicable law,” and that it “takes such reports seriously and will cooperate with law enforcement in all investigations.”
In a statement this week, a representative for the San Francisco-headquartered company said, “We work closely with local and federal law enforcement, e.g., we provide visibility into all of our current inventory via LeadsOnline” – an online investigation system used by police departments across the country to track transactions from secondhand dealers – “to help prevent the trafficking of stolen goods.”
More than that, the spokesman said, “We are also applying extra scrutiny to consigned items with tags and styles currently available in stores’ in an effort to block the sale of stolen goods.”
Matt Cohen, the vice president of business development and strategy for online sneaker marketplaces GOAT and Flight Club, echoed this sentiment, telling the Los Angeles Time, “We will not allow for these stolen products to be sold on our platforms and all suspected products will be removed.”
Such firm statements by resale companies are assuring, but how easy is it really for these companies to separate the legitimate from the stolen? In some instances, the determination of whether a product was legitimately acquired by the individual looking to resell it or whether it was stolen is significantly more straightforward than in others. Chanel handbags, for instance, have serial numbers that can be used to help resale companies to identify stolen goods with the help of the brands.
Luxury watches are potentially even more straightforward, as they not only come with traceable serial numbers but in recent years, services and websites have popped up en masse to help record and potentially even track down, stolen timepieces. Watch Register – the world’s largest database of lost and stolen watches helps theft victims, insurers and police to recover losses – currently maintains a database of over 70,000 lost and stolen watches, which should prove helpful if the products looted from various stores across the U.S. are ultimately presented to resellers.
On the other hand, most sneakers – which have, in no small number of cases, become expensive, luxury goods in their own right – do not come with the same types of serial numbers, making it more difficult to identify their origins. Still yet, at least some of these stolen goods are also at a heightened risk of potentially going undetected due to the quantities in which they are likely to be presented to resale sites; one brand-new Chanel jacket or a single pair of coveted Nike sneakers being offered up by an individual is far less of a red flag than larger, unexplained quantities of them.
Given that established resale-specific companies say that they are on the lookout for potentially stolen goods, which they may or may not confiscate and turn over to law enforcement, individuals with looted merch on their hands may opt to utilize larger marketplace sites, such as eBay. But even then, a spokeswoman for eBay – which boasted a whopping 1.3 billion individual listings as of 2019, with accessories being among some of the most heavily listed and sought-out types of products – says that the company “is fully committed to providing a secure online shopping experience to millions of people globally.” She noted that eBay has “zero tolerance for criminal activity on its platform – stolen items are illegal and we actively work to prevent them.”
In a time of heightened consumer awareness and demands for retail transparency and accountability, resale sites – which are already subject to rising organized retail theft due to “an increase in the ease with which stolen goods can be sold online,” according to the National Retail Federation – will be faced with a real challenge in coming weeks when it comes to looted luxury goods, and their responses to this issue will prove interesting to watch.