Governor Newsom signed the most significant bipartisan bill to combat property crime at a Home Depot store in San Jose, California, USA on August 16, 2024.
Tayfun Coskun | Anatolia | Getty Images
California Governor Gavin Newsom has signed ten new laws aimed at combating retail crime in the state.
The package announced Friday includes new laws to combat shoplifting, theft from a vehicle, organized theft and online marketplaces where these stolen goods are sometimes resold. The new laws come after retailers called on both local and state governments to do more to combat shoplifting, saying it is a growing challenge that impacts profits, customers and employees.
One of the bills in the package, SB 1416, would impose tougher penalties on 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, who introduced the bill.
This law imposes additional prison sentences and fines for the sale, exchange or return of stolen property – the bread and butter of criminal retail rings. Before the law was passed, people accused of participating in organized retail rings faced up to three years in prison. Critics said the punishment and penalty were not sufficient deterrents.
Newman said the law is designed to go after middlemen like Michelle Mack – the “queen” of organized retail crime exposed by CNBC's investigation, who police say made millions reselling stolen goods on Amazon at a fraction of the usual retail price. Mack was arrested in December and given a deferred sentence of five years and four months in state prison.
Mack's husband, Kenneth, received the same sentence and is already in prison. The couple was ordered to pay about $3 million in damages to the cosmetics retailer. Ulta and another $13,000 to Sephora, a court official previously told CNBC.
Theft and organized retail crime rings like Mack's “California Girls” have been cited by retailers as the reason for lower profits, difficulties in hiring and retaining staff and the deterioration of the in-store shopping experience. Others have disputed these claims, saying retailers overstate the impact of theft and downplay the operational problems behind the lower profits.
According to the Public Policy Institute of California, burglary and robbery rates in California have steadily increased in recent years. Shoplifting is also on the rise, although it is still well below pre-pandemic levels.
Since January, the California Highway 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 press release announcing the new legislation.
Retailers are urging Congress to crack down on organized retail crime nationwide. Retail lobby group National Retail Federation is pushing to make theft a more easily punishable federal crime.
With the 2024 presidential election looming, Democrats also want to crack down on crime to counter Republican criticism of the nation's rising crime rates. But critics of efforts to combat retail crime fear the measures could disproportionately harm marginalized groups.
Another bill, SB 1144, also passed as part of the new legislative package, aims to prevent the trading of stolen goods on online marketplaces such as Amazon. Introduced by Senator Nancy Skinner, the bill builds on an earlier California law by, among other things, updating compliance criteria for third-party wholesalers and making it easier to file civil lawsuits against online marketplaces that sell stolen goods.
— CNBC's Gabrielle Fonrouge, Scott Zamost and Courtney Reagan contributed to this report.
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