Crime rings selling beauty products on the internet

By Katie Bird

- Last updated on GMT

Related tags Beauty products

Health and beauty products are being targeted by organized crime
rings and resold on internet sites, according to the National
Retail Federation (NRF).

The NRF is warning consumers to avoid purchasing such products as the quality may have been jeopardised from substandard storage practices.

Products may pose health risks "Many health and beauty products on these sites may have expired or be spoiled, posing real health risks to the buyer," said NRF vice president of loss prevention Jospeh LaRocca.

"Once the legitimate distributor is taken out of the equation, there is no guarantee the merchandise is safe," he added.

The warning follows the exposure of an organized crime ring in Florida that may have stolen over $100 million worth of health and beauty products over five years.

The Federal Bureau of Investigation estimates that such organized crime costs the retail industry approximately $30bn a year.

According to the NRF organized crime rings target well known products - stealing thousands of dollars of merchandise which will then be sold on internet auction sites to make a profit.

Investigators of retail crime have highlighted a list of well known brands and products most likely to be stolen and sold by criminals, including Cover Girl cosmetics, Oil of Olay and RoC skin care products, Rogaine hair growth formulations and a range of oral care and shaving products.

Cosmetics and skin care top stolen goods list

According to a survey led by the Center for Retail Research in November 2007 cosmetics and skin care top the list of stolen goods in North America.

Security experts Checkpoint Systems, the sponsors of the 2007 survey, refer to the phenomenon as shrink.

"The phenomenon of shrink must be taken seriously in the context of a global economy," said Checkpoint Systems' CEO George Off. "

Shrink cost has an immediate impact on the margins of the global retail industry."

The company expects large retailers to respond to security issues by investing in source tag technology.

Currently, 45.2 percent of North American retailers use tags but it expects the figure to increase to 69.3 percent by the end of the decade.

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