New legislation in California aims to combat organized retail crime.

• Gavin Newsom, the Governor of California, has enacted 10 new laws to address retail crime in the state.
• A bill in the package aims to impose stricter penalties on middlemen in organized retail crime rings, following a CNBC investigation published in March.
• Governments at all levels are being urged by retailers to take stronger action against retail theft, which is negatively affecting profits, customers, and employees.

Gavin Newsom, the Governor of California, has enacted 10 new laws to address retail crime in the state.

New laws have been announced to combat retail theft, including shoplifting, theft from vehicles, organized theft, and online marketplaces that resell stolen goods. Retailers have called on governments to take action, as they have cited retail theft as a growing challenge that has negatively impacted profits, customers, and staff.

The bill, SB 1416, was introduced by State Sen. Josh Newman and establishes stricter penalties for middlemen in organized retail crime rings. This bill was introduced in response to a CNBC investigation published in March.

The bill imposes additional prison time and fines for the sale, exchange, or return of stolen property, which is a common practice in retail resale crime rings. Prior to the law's enactment, those accused of being involved in organized retail crime rings could face up to three years in prison. However, critics argued that the sentence and penalty were not sufficient to discourage such activities.

Michelle Mack, the "queenpin" of organized retail crime, was exposed in CNBC's investigation and was arrested in December for making millions by reselling stolen goods on Amazon at a fraction of their typical retail price. She received a delayed sentence of five years and four months in state prison.

Kenneth, Mack's husband, has also been incarcerated for the same sentence. The couple was ordered to pay approximately $3 million in restitution to the beauty retailer and an additional $13,000 to Sephora, as previously stated by a court official to CNBC.

Retailers have attributed lower profits, difficulty in hiring and retaining staff, and a negative in-store experience to theft and organized retail crime rings, similar to Mack's "California Girls." However, others argue that retailers are exaggerating the impact of theft and underestimating the operational issues contributing to lower profits.

The Public Policy Institute of California reports that commercial burglary and robbery rates in California have been on the rise in recent years, while shoplifting has also seen an increase, although it is still below pre-pandemic levels.

The Organized Retail Crime Task Force of the California Highway Patrol has made 884 arrests and recovered over 250,000 stolen items worth more than $7.2 million since January, as stated in a new legislation press release.

The National Retail Federation has been lobbying Congress to increase penalties for organized retail crime nationally.

As the 2024 presidential election approaches, Democrats are taking steps to address criticism from Republicans about rising crime rates by appearing tough on crime. However, there are concerns that the measures being taken may unfairly target marginalized communities.

In addition to SB 1144, another bill passed in the new set of laws aimed at preventing the sale of stolen goods on online marketplaces such as Amazon. This bill, introduced by State Sen. Nancy Skinner, expands upon a previous California law by updating the compliance criteria for high-volume, third-party sellers and simplifying the process for filing civil charges against online marketplaces that sell stolen goods, among other measures.

This report was contributed to by Gabrielle Fonrouge, Scott Zamost, and Courtney Reagan of CNBC.