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How eFencing Works


Business of Online Stolen Goods
Retail companies like Wal-Mart have struggled with employee theft in the past and have entire loss prevention departments to counter crime. Many believe that stepping up loss prevention will help combat the act of eFencing.
Retail companies like Wal-Mart have struggled with employee theft in the past and have entire loss prevention departments to counter crime. Many believe that stepping up loss prevention will help combat the act of eFencing.
Joe Raedle/Getty Images

The Internet, although not the sole reason for increased retail fraud, has made the selling of stolen goods much easier for thieves in recent years. To understand this, it helps to compare and contrast the differences between a physical fence location such as a pawn shop and an online fence location such as an auction site.

First, the actual location makes a big difference. In order for someone to make money off of stolen goods from a pawn shop, the actual location of the pawn shop needs to be known. The thief needs to get up and physically walk to the pawn shop; there, the employee behind the counter has a chance to see the goods in question and make judgment. An eFence, on the other hand, is conducting business from the Internet, which is accessible just about anywhere.

More importantly, the identity of the eFence is either vague or completely secret. While most pawn shops require identification and even fingerprints, eFences remain largely anonymous when dealing over the Internet. Additionally, while pawn shops have a generally limited customer base -- simply people who happen to walk into a pawn shop looking for used goods -- eFences can find large, diverse groups of people looking to buy over the Internet. On top of all of this, setting up fences over the Internet is more lucrative: Internet buyers pay about 70 cents on the dollar for goods sold online, much higher than the return in a physical setting [source: Wholesale Central].

Aside from downright stealing merchandise, dealers have found other, less conspicuous ways of copping goods. One thief managed to alter bar codes on items from stores like Target and Best Buy, so that once he checked out at the cash register, expensive products would ring up for significantly less. He'd then sell the goods for close to retail, keeping him above, for the most part, any suspicion. Before he was arrested, he made somewhere between $40,000 and $45,000 [source: NBC 10].

What can companies, both online and off, do to safeguard against eFencing? How can consumers identify an item that's part of a fence? Are there any indicators, or is it impossible to know the origin of something you're buying?

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