California’s Democratic Governor Gavin Newsom has signed 10 new bills into law aimed at combating retail crime in the state.
The bill announced Friday includes new laws to crack down on shoplifting, vehicle theft, organized theft and online marketplaces where stolen goods are sometimes resold. The new laws come after retailers have called on both local and federal governments to step up efforts to combat retail theft, citing it as a major problem that affects profits, customers and employees.
One of the bills, SB 1416, would create tougher penalties for middlemen in organized retail crime rings and was filed in response to a CNBC investigation published in March, according to the office of state Sen. Josh Newman, a Democrat who introduced the bill.
The bill provides additional prison time and fines for the selling, exchanging, and returning of stolen goods, which are the backbone of organized retail resale crime rings. Before the law was passed, people charged with participating in organized retail crime rings could face up to three years in prison. Critics said the sentences and penalties were not enough of a deterrent.
Newman said the law was enacted to go after middlemen like Michelle Mack, the “queen” of organized retail crime exposed in a CNBC investigation who police say made millions by reselling stolen goods on Amazon for a fraction of the normal retail price. Mack was arrested in December and received a deferred sentence of five years and four months in state prison.
Mac’s husband, Kenneth, also received the same sentence and is already in prison. The couple were also ordered to pay approximately $3 million in restitution to the cosmetics retailer. Ulta Court officials previously told CNBC that the company paid an additional $13,000 to Sephora.
Retailers have cited theft and organized retail crime groups like McDonald’s “California Girls” as the cause of declining profits, difficulties in hiring and retaining employees, and a poor customer experience in their stores. However, others have disputed these claims, saying retailers are exaggerating the impact of theft and downplaying the operational issues behind the declining profits.
Rates of theft and robbery at commercial establishments in California have been steadily increasing for years, according to data from the Public Policy Institute of California, and shoplifting, while still well below pre-pandemic levels, is also on the rise.
According to a press release announcing the new law, the California Highway Patrol’s Organized Retail Crime Task Force has made 884 arrests since January and recovered more than 250,000 stolen items with a total value of more than $7.2 million.
Retailers have called on Congress to crack down on organized retail crime nationwide, and the National Retail Federation, a retail lobbying group, has pushed to make theft easier to prosecute as a federal felony.
With the 2024 presidential election looming, Democrats are seeking to appear tough on crime to counter Republican criticism of the nation’s rising crime rates, but critics of the push to combat retail crime worry that it will disproportionately harm vulnerable people.
Another bill passed in the new wave of legislation, SB 1144, aims to prevent the trade of stolen goods on online marketplaces like Amazon. The bill, introduced by Democratic state Senator Nancy Skinner, builds on previous California laws by updating compliance standards for high-volume third-party sellers and making it easier to bring civil lawsuits against online marketplaces that sell stolen goods.
—CNBC’s Gabriel Fonrouge, Scott Zamost and Courtney Reagan contributed to this report.
