The Problem of Stolen Goods Markets
What This Guide Does and Does Not Cover
This guide addresses the problem of stolen goods markets. The guide begins by describing the problem, then provides advice on how best to analyze local, national, or international stolen goods markets; reviews tactics that you can use to detect those involved in stealing, dealing, and using stolen goods; and suggests ways to assess the tactics' likely effectiveness in specific situations and locations. The ultimate aim of reducing stolen goods markets is to make it more difficult and risky for people to trade in stolen goods and thereby discourage stealing in the first place.
Most burglars and other prolific thieves steal to raise money, and to do so they need to sell whatever they steal. To obtain money by stealing things, the prolific and relatively "successful" thief must routinely complete two objectives without getting caught. The first objective is to steal valuable items. The second objective is to sell or trade the stolen goods. Ultimately, the prolific thief's main aim is to acquire something else—often drugs or alcohol—with the money gained from selling the stolen goods. While police and prosecutors commonly think of this scenario as comprising two crimes—one being theft and the other receiving stolen goods—from the thieves' standpoint, they haven't completed the action until they've acquired what they ultimately desire. Understood this way, the theft is only the beginning of the crime, not the end of it.1 While other theft-related problem-oriented guides address thwarting the thief's first objective, this guide addresses the second objective.
Those who knowingly buy stolen goods do not have recourse to legal remedies and so serious violence may be used as a means of criminal dispute resolution.2 Stolen goods markets are but one aspect of the larger set of problems related to property theft and illicit markets. This guide is limited to addressing the particular harms stolen goods markets create, with a focus on ordinary consumer goods. Some specialty stolen goods markets, such as those dealing in firearms, cultural artifacts, art, or endangered species, have unique features calling for separate analyses and different responses. Related problems not directly addressed in this guide, each of which requires a separate analysis, include the following:
Property theft problems
- Illicit drugs markets
- Prostitution markets
- Human trafficking markets
- Child pornography markets
- Pirated software, music, and film media markets
- Fake goods markets
- Illicit diamond markets
- Endangered species markets
- Illicit antiques, art, and cultural artifacts markets
- Illicit firearms markets
Some of these related problems are covered in other guides in this series, all of which are listed at the end of this guide. For the most up-to-date listing of current and future guides, see www.popcenter.org.
This guide is designed to help police officers and other officials reduce varied theft problems with different resource levels and in various locations by promoting tailor-made solutions to specific local problems.
General Description of the Problem
Stolen goods markets facilitate the demand that drives much property theft. Even though stolen goods dealers and consumers create the demand for stolen goods, police and crime reduction efforts remain firmly focused on thieves.3 Police agencies close many property crime investigations once they arrest the thieves, and pay less attention to tracking the stolen property.4
Many stolen goods markets are so clandestine, they are harder to research and police than drug trafficking, theft, and violence, for instance.5 However, much stolen goods trading goes on in relatively plain view, such as where goods are hawked openly on the streets or in pawn- and secondhand shops. At least some stolen goods markets are clearly visible, so long as you know what you are looking for and understand the criminal dynamics of what you see.6
Gathering sufficient evidence to prosecute the stolen goods middleman—the fence—is difficult as fences often hide their illegitimate activities behind legitimate business fronts. Professional fences know how to do this well and can operate for years with impunity.7
Harms Caused by Stolen Goods Markets
Stolen goods markets cause a number of social harms. Some local stolen goods markets are linked to larger and more sophisticated organized criminal enterprises. Those who buy in stolen goods markets create a demand for their own victimization and also fuel the victimization of others. And since theft is not evenly distributed, legitimate merchants and residents in high-crime areas are either refused theft insurance or else pay considerably higher premiums. The price of goods in shops reflects profits lost to thieves and stolen goods markets, and merchants who refuse to trade in stolen goods are often undercut and lose business to those who do. Meanwhile, the consequent fear of crime creates uncertainty and discourages business investment, population stability, and growth necessary for local economies to thrive.8 Finally, because those involved in stolen goods markets tend not to resort to the law to resolve their disputes, for fear of being found out themselves, they often resort to violence to resolve them.9
Factors Contributing to Stolen Goods Markets
Understanding the factors that contribute to your problem will help you frame your own local analysis questions, determine good effectiveness measures, recognize key intervention points, and select appropriate responses.
Stolen goods trading typically involves several steps, beginning with the theft itself and culminating in an end-consumer's obtaining the stolen goods. Understanding the actions offenders take and challenges they face in each step will help you design methods to disrupt the process at several points in the crime process. Figure 1 depicts these steps.
Figure 1. Chain of transactions in stolen goods markets (modified from Cornish, 1994).
Supply and Demand—The Key Issue in Most Thefts
As with any market, the relationship between supply and demand for stolen goods can be complex. Generally, the demand for stolen goods increases the incidence of theft.§ This makes sense because, for the most part, thieves won't steal goods unless they first know or believe other people will buy or trade for them.10 General awareness that many business owners and members of the wider public are willing to buy stolen goods motivates thieves to start and continue stealing.11 Young thieves learn from their families, neighbors, and peers about their community's willingness to buy stolen goods. Knowing who buys stolen goods and how to deal with them makes stealing a viable choice for some young people growing up in less wealthy areas.12
§ The supply-and-demand relationship is not always this simple. The relationship between people's willingness to buy stolen goods and others' readiness to steal them is sometimes complex (Ferman, Henry, and Hoyman, 1987).
Once thieves know people are generally willing to buy stolen goods, stolen goods markets are mainly fuelled by thieves' offering goods for sale, rather than by proactive demand from dealers or consumers.13 Thieves' offers to sell stolen goods have the greatest influence on how stolen goods markets operate. This is because most dealers and consumers do not actively seek out stolen goods: someone needs to offer these items to them.14 Strangers frequently offer small-business owners stolen goods.15
Sometimes thieves steal items to order. This means they are asked to supply particular products or quantities by theft. Prolific fences tend to encourage thieves to increase their offending in this way. But stealing to order is not as common as stealing to offer.16
Commonly Stolen and Sold Goods
Knowledge of the "standing demand" for stolen goods affects the type of goods stolen, depending on what is most in demand at the time, and can at times lead to problem crime waves when thieves target particular highly sought items. Statistical research proves that most thieves have an ever-changing hierarchy of goods that they prefer to steal. Research with thieves themselves reveals that they rarely hoard stolen goods for more than an hour or two, at most, since they seek as near to immediate cash returns as possible—and want to avoid getting caught in possession.17 This means that thieves are unlikely to steal and hoard goods that they do not currently know to be in high demand on the off chance that they will be saleable in the future. Since most thieves steal because they want money in a hurry, at the top of their list is cash, followed by items that they can easily and quickly sell for relatively high prices, such as jewelry and high-tech home entertainment equipment.18
Understanding what makes products attractive to thieves will help you anticipate new theft targets, and consequently what new products are likely to become popular in stolen goods markets.19 So-called hot products typically have one or more of the following attributes that can be summarized by the acronym CRAVED, in that they are the following:
The more of these attributes a thing has, the more attractive it is for someone to steal it. However, because we know that prolific thieves rarely steal items for their own use, the last three attributes are the most important because they relate to items' worth and not just to their portability. It is this worth of items that makes them disposable as products that thieves can sell or swap for drugs.
The demand for and prices of goods in legitimate markets influences what products are hot in stolen goods markets.21 Knowing, for example, what retail goods shoplifters are stealing, while perhaps not too important to police from a criminal investigation standpoint, might be quite important from a crime prevention standpoint, because shoplifting is often a gateway crime to more-serious theft and a fallback crime for prolific burglars to support their drug use.22
Stolen Goods Market Locations and Times
Although theft can occur any place where there is something to steal, much burglary and other theft are concentrated in particular areas, and thieves prey more often upon particular types of people in those areas.23 Likewise, in both the United Kingdom and the United States, stolen goods markets can occur anywhere. But once again, they tend to be concentrated in the least affluent areas.24 Accordingly, stolen goods markets are one of the major contributing factors to criminal victimization in less-affluent areas, since thieves prefer not to travel far when selling stolen goods.
Thieves generally prefer to sell stolen goods locally,25 and they sell most stolen goods within 30 minutes of their theft.26 Therefore, a concentration of local thefts might (but not necessarily) indicate the relatively close proximity of a local market for those goods. It must be noted, however, that while this is something worth exploring in the first instance, it should not be done at the expense of neglecting other possibly more important markets farther afield.
Stolen goods trading takes place at odd times of the day and night as much as it does during normal business hours.27
Stolen Goods Buyers
In addition to professional fences, average citizens buy stolen goods. At least in the United Kingdom, buying stolen goods, like many other offenses, is a crime most often committed by those who are young, single, male, relatively unskilled, and living in relatively deprived areas.28 These, of course, are simply those who are, overall, statistically the most likely to be offered and to buy stolen goods. At any time, business owners who are not professional fences may buy stolen goods. The same is true for tradespeople and anyone else within any population of "ordinary folks" who find it hard to resist the chance of a bargain with no questions asked.
Public Tolerance of Stolen Goods Markets
Whereas most citizens are intolerant of thieves and of stealing, they tend to be more tolerant of stolen goods buyers and sellers because they are seen as entrepreneurs providing the valuable local service of making goods available at bargain prices.29 In addition, many so called "ordinary folks" ask no questions, or accept the standard "it fell off a truck" lines, when offered deeply discounted valuables. Even if they do not buy, most are unlikely to report people selling goods in this way.30 Police cannot afford to ignore the prevailing community attitudes toward buying stolen goods.31
Links With Illicit Drug Use
In the United Kingdom, some 29 percent of arrested thieves are heroin or cocaine users, and these are the most prolific offenders, probably responsible for more than three-fifths of the illegal income generated by selling stolen goods.32 However, drug dealers are often reluctant to exchange drugs for stolen goods.33 This means that stolen goods markets play at least as important a part as regular illegal hard drug use in explaining high theft rates and, therefore, represent an equally important opportunity for crime reduction initiatives. That said, drug dealers do accept certain kinds of property in exchange for drugs, and they also buy stolen property.34 Drug dealers are known to buy, in particular, stolen expensive designer wear and jewelry for their own use.35 Buying and selling stolen goods is, for many offenders, a gateway offense into buying and selling drugs.36
Stolen Goods Market Types
Stolen goods markets tend to have particular local, as well as national, characteristics in terms of what thieves steal and how those involved conduct transactions.37 Consequently, reducing these markets calls for locally tailored solutions.
There are six stolen goods market types that are distinctive in the ways that thieves, dealers, and consumers operate.38 No one market type is more serious or important than another in terms of the role it plays in promoting theft. The six market types are as follows:
- Commercial fence supplies. Thieves sell stolen goods to commercial fences operating out of shops, such as jewelers, pawnbrokers, and secondhand dealers.
- Residential fence supplies. Thieves sell stolen goods (particularly electrical goods) to fences, usually at the fences' homes.
- Network sales. Thieves pass stolen goods on, and each participant adds a little to the price until a consumer is found. This may involve a residential fence, and the buyer may be the final consumer or may sell the goods on again through friendship networks.
- Commercial sales. Commercial fences most usually pose openly as legitimate business owners while secretly selling stolen goods for a profit, either directly to the (innocent) consumer or, more rarely, to another distributor who thinks he or she can resell the goods for additional profit.
- Hawking. Thieves sell directly to consumers in places such as bars and pubs or door to door (e.g., shoplifters sell cigarettes, toiletries, clothes or food).
- "eSelling." This market type involves selling stolen goods through private websites such as Craigslist or through online auction sites such as eBay. This gives thieves access to buyers they would not otherwise reach. Thieves may sell goods directly to the public online or else sell through a business fence in an offline commercial fence supplies market. The business fence then sells the goods using the Internet.§
§ For further information on "eSelling," see Wilbur (2004), Skelton (2005), Tuckey (2007), Talamo et al. (2007), and Newman and Clarke (2003). See Davis (1998) for a useful guide for police officers investigating Internetfacilitated crime.
By and large, offenders—particularly those operating within network sales markets—are flexible in how they use available markets.
Understanding the dilemmas those dealing in stolen goods face is useful in designing prevention and control strategies.
The stolen goods seller's dilemma is that to increase his chances of making a profit, he has to increase his risks of getting caught. The seller can choose to sell only to people he knows, which reduces his risks of getting ripped off or detected but restricts his sales and buying opportunities. Or the seller can sell to strangers, which allows him access to more potential customers but also increases his chances of getting arrested or ripped off.39 This dilemma applies to both the thief and the dealer (the fence), but the business-owning commercial fence also has to simultaneously gain the confidence of thieves with whom they deal, while maintaining a clean public image.40
These conflicting demands of access and security determine to a large extent the structure of local stolen goods markets.
Some stolen goods dealers are professional fences who conceal their activities behind legitimate business fronts. Others are not, but operate instead out of their own homes or else on the move, using, for example, networks of associates linked by mobile phone. In other markets, consumers and innocent dealers may buy directly from thieves rather than through a fence.
Fences tend to specialize in selling in particular market types, but some sell in more than one market type. For example, fences operating in commercial fence supplies markets may deal at home as residential fences, but also be involved in network sales41or even "eSelling," particularly where stolen items not sold through their legitimate retail business are being traded.
There are several types of fences, including the following very useful typology constructed by Lewis (2006) to outline the specific dynamics of different types of commercial fencing operations:
- Level-1 fence: A thief sells to a level-1 fence (often a storeowner such as a pawnbroker or jeweler), who then sells the goods in his store or else sells them to another fence.
- Level-2 (wholesale) fence: A level-2 fence buys from a level-1 fenceand then often cleans up and/or repackages the goods to make it look as though they came legitimately from the manufacturer. These are very clandestine operations that are perhaps most likely to be found when working back from a level-3 fence bust (see below). Those who operate stolen car rings also fall within this fencing subtype.
- Level-3 fence: A level-3 fence takes repackaged goods from level-2 wholesale fences and diverts the goods to retailers. At times, major retailers will find themselves buying back the very goods that were stolen from them.42 Level-3 fences have been known to sell perfume, cosmetics, razor blades and shoplifted designer goods in this way.43
Commercial fences use their business front to recruit thieves who come in offering them stolen goods. (This is the commercial fence supplies market operating at Level-1.) They also mix stolen goods in with their legitimate stock. Somewhat perversely, this helps to sell legitimate stock, as people think they are getting a genuine bargain if goods are stolen, even when they are not. (This is the commercial sales market at Level-1.)44
Most-Basic Fencing Principles
Understanding the unique dynamics of particular offending can help identify and also understand the behavior of less visible offenses and offenders that facilitate more visible crime problems such as theft. For a professional fence to operate and avoid arrest, he needs to coach promising thieves to avoid detection and maximize profits. He must conceal his stolen goods trading behind a legitimate trading front. He should remain willfully ignorant about whether the goods that he buys from other dealers are stolen. He must try to offload stolen goods quickly to avoid detection, but also know when it is safer to store them and sell them later. He must avoid getting caught in possession of stolen goods, but if he is, he should know how to make it difficult for police to prove that he knows the goods are stolen. He must be careful not to work with police informants and limit the number of people who know about his business. He must never admit to knowingly trading in stolen goods if the police question him. And, if all this fails, he must have money for a good lawyer if police arrest him.45
Inexperienced thieves tend to sell mostly by hawking to strangers in public places or selling to only one residential fence they know.46 Problem drug users in particular commonly find it hard to find fences who will deal with them.47 The most experienced and prolific offenders tend to have the most ways of selling stolen goods in a variety of markets.48 A study of experienced residential burglars found that they most often sold stolen goods to known fences, friends, or relatives rather than strangers.49
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Stolen Goods Markets
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