Gov. Jared Polis on Thursday signed into law legislation that seeks to crack down on stolen and counterfeit products being anonymously sold through online marketplaces, such as eBay and Facebook.

Beginning in 2023, House Bill 1099 will require some third-party sellers to provide identifying information to the online marketplace they’re using and to the person they’re selling to.

Supporters said the bill will address retail theft ranging from porch pirates to large, organized smash-and-grabs by cutting off the ability to resell stolen goods. This comes as retail crime is rising both statewide and nationally. In 2021, a survey found that 69% of retailers experienced an increase in organized retail crime in the last year. Reports of theft, robbery and burglary have steadily increased in Colorado in recent years, reaching over 147,000 incidents in 2021 – up 13,000 from 2019 – according to state data.

The bipartisan bill – sponsored by two Republicans and two Democrats – passed the state House in a 60-3 vote and received unanimous approval by the state Senate.

“We are cracking down on retail theft and protecting business and consumers by making it harder for thieves to resell stolen goods online,” said bill sponsor Rep. Dylan Roberts, D-Avon. “These new laws focus on giving law enforcement effective tools to prevent crime, and I’m proud Gov. Polis has signed them into law.”

Under the bill, sellers would have to give their bank account number, contact information and tax identification number to the online marketplace, which would verify the information. To customers, sellers would have to provide their full name, physical address, contact information and whether they got the product from another seller.

This will apply to people who sell new products generating $20,000 or more annually, not to individuals who occasionally sell used products. Failure to provide the information would be classified as a deceptive trade practice, punishable by a fine of up to $20,000 per violation.

“Everyone is affected,” bill sponsor Sen. Rob Woodward, R-Loveland, earlier said, adding the bill would address the root cause of theft.

“Porch pirates are stealing Amazon packages. Organized shoplifting is driving up the costs at local retailers. And online purchases of counterfeit drugs and products by unsuspecting customers is growing quickly,” Woodward said. 

Business Derek Friedman, who owns Sportsfan and Sock Em’ Sock Emporium, Colorado’s largest independent retailers in their categories, outlined in an opinion piece how retail crime has “devastated small businesses.” 

He said from 2014 to about 2019, his stores in the Denver area experienced “typical” shoplifting rates. Then retail theft exploded, hitting his stores “especially hard” in the middle of 2019.

“This was the beginning of our theft rates TRIPLING,” he wrote. “I soon learned that 2019 was just the tip of the iceberg – the COVID-19 pandemic was the true breaking point. In 2020, we lost six figures in sales and were hit with the first of many break-ins and burglaries. We’re not talking about neighborhood shoplifters here. What I’ve seen is far larger and more catastrophic – from both financial and physical standpoints.”

In less than three years, he lamented, his business lost more than $200,000, adding that meant his company could no longer afford to replace all the stolen inventory or provide workers with bonuses.

“I’m still forced to make tough decisions. Just last month, I had to implement a 1% ‘crime-spike fee’ on all transactions at my stores that have experienced the highest rates of theft. Back when I first set up shop, the specter of such systemic retail theft never crossed my mind. I understood that shoplifting was always a part of doing business, but what I’m facing is unprecedented,” he said. “The bill, which closely reflects legislation being considered at the federal level, would throw a wrench in the operations of retail crime rings by making it harder for them to anonymously sell stolen products online. With basic transparency, it will make it easier for law enforcement to build cases against repeat offenders and bust the large networks that are trafficking in stolen goods.”