Authorities in Prince George’s County, Md., and across the country, are dealing with an unusual, if not entirely new, problem: thefts of Tide detergent are spiking because the product’s black market value is rising. We consider the factors, from sentencing laws to brand loyalty, that are driving the phenomenon.

Guests

  • Sergeant Aubrey Thompson Director, Organized Retail Crime Unit of the Prince George’s County Police Department
  • Ben Paynter writer and journalist; 2012 James Beard Foundation Award Winner

Video: Inside The Studio

Sgt. Aubrey Thompson of the Prince George’s County Police Department says local thieves have been selling Tide laundry detergent on the black market. Thompson described an undercover sting last year at a Vietnamese nail salon in which officers discovered large quantities of Tide being shipped overseas. The salon was also dilluting near-empty bottles of detergent with water in order to double profits. “It’s high reward. You’re going to sell out that Tide as soon as you leave the store,” Thompson said.

Transcript

  • 12:41:18

    MR. KOJO NNAMDIWelcome back. Laundry detergent has a squeaky-clean image, but starting in 2011, authorities in Prince George's County noticed a spike in thefts of the stuff, not just a little. One store reported losing as much as $15,000 worth of inventory in a single month. And not just any old laundry soap. It was all Tide. Turns out, stores in other parts of the country, from Minnesota to California, were dealing with a similar problem, and the detergent is just the latest in a list of goods to serve as a sort of black market currency that helps fuel the drug trade and other crime.

  • 12:41:56

    MR. KOJO NNAMDIHere to explain just how and why that is is joining us in studio, Sgt. Aubrey Thompson. He is the head of the Organized Retail Crime Unit of the Prince George's County Police Department. Aubrey Thompson, thank you so much for joining us.

  • 12:42:11

    SGT. AUBREY THOMPSONThank you.

  • 12:42:12

    NNAMDIAlso joining us from the studios of KCUR in Kansas City is Ben Paynter. He's a writer and journalist whose work has appeared in numerous publications, including Wired, The Wall Street Journal and New York Magazine. Ben also received the 2012 James Beard Foundation Award for environment, food, politics and policy writing. Ben Paynter, thank you for joining us.

  • 12:42:32

    MR. BEN PAYNTERThank you.

  • 12:42:33

    NNAMDISergeant Thompson, the Tide detergent is not, on balance, being stolen because it's laundry day and people are coming up short. So who is stealing it, and what are they using it for?

  • 12:42:45

    THOMPSONThe normal booster, that's their preferred item that they like to steal because it's a high turnaround on the street. If you steal something with a serial number on it such as a iPad, a TV, a Dyson vacuum cleaner, it's easy to track those things, and people on the street that will buy hot items, they know that. So laundry detergent is -- Tide, in particular, is a popular brand. And based on our surveillance and operations within the last two years, that's the one product, when you go out on the street, it sells like hotcakes.

  • 12:43:23

    NNAMDIWhat's the street value of a bottle of Tide?

  • 12:43:26

    THOMPSONWell, it depends on the, I guess, the person who would steal it, how oppressed he is. So you go in a store, and you steal a 150-ounce container. That's the most popular size that they steal. In a store, it costs $20 to $21. You go on the street, and that's a quick $5 turnaround.

  • 12:43:49

    NNAMDISo 15 -- instead of the person who buys that would normally be paying about $20 for it in the store.

  • 12:43:55

    THOMPSONYes, sir.

  • 12:43:56

    NNAMDIThey buy it from the person who steals or boosts it. They get to pay $5 for it?

  • 12:44:00

    THOMPSONRight.

  • 12:44:00

    NNAMDIBen Paynter, Tide is a brand that has built a pretty remarkable recognition on loyalty. What did you learn from researchers about how they did that and why people are so faithful to this brand and, well, brands generally?

  • 12:44:14

    PAYNTERWell, I think as far as Tide is concerned, I mean, it's a long history. The brand itself rolled out in the '40s, and, you know, they were dominant early on because they were just -- they were the first in the market to use basically surfactants, which basically help you take the dirt out of your clothes and then keep it from resettling elsewhere on the clothes. And they patented that formula.

  • 12:44:38

    PAYNTERSo when you're first in the market and you're able to patent your formula, it takes other people longer to get into the game and to create a product as good. You know, obviously, they were sort of winning over people early. Now, what's interesting the way that Procter & Gamble works is they've invested lots of money in research over time to sort of continue that dominance.

  • 12:44:57

    PAYNTERI mean, everything from their marketing strategies to, you know, the way the product smells has been carefully calculated to make sure that people, you know, when they buy the product, are having a good experience with it and that, you know, once you establish yourself as that number one brand out there, which Tide obviously has, people are not only attracted to it, but it becomes a status symbol for a lot of the users to sort of continue to buy it. So it's a multi-pronged attack, I think.

  • 12:45:20

    NNAMDIIt's my understanding that, according to research, Tide now represents more than 30 percent of the liquid detergent market. Ben, what does that compare to Coca-Cola maybe?

  • 12:45:32

    PAYNTERWell, yeah, I would say probably Coca-Cola and Kraft. I mean, there's -- as far as brand names that are the most recognizable with consumers that they would refuse to give up during the recession, there was a study done that showed that literally it was -- Tide detergent, Kraft and Coca-Cola were the three most dominant brands out there that people felt an affinity for. So, yeah, they're just the same as the big soft drinks these days.

  • 12:45:55

    NNAMDIYou live, you learn. 800-433-8850 is the number to call. If you run a store that's been a target of a theft scheme, tell us how it affected your business and what you did about it. 800-433-8850. You can also call if -- you know, we know some brands cost more, but why do you think they're worth more? You can send email to kojo@wamu.org. Sgt. Thompson, these thieves are not just walking out with just one or two big orange bottles. What are we talking about in terms of volume on a theft like this, and how is it generally carried out?

  • 12:46:27

    THOMPSONWhat they do, they target the large supermarkets: Safeway, Giant, Target, Wal-Mart. They go in in teams of twos or threes and get a shopping cart, and they fill the shopping cart with Tide. I'm talking about 50 bottles in a shopping cart. And as they leave out, they'll put a big bag of dog food on it to cover up the Tide or Bounty paper towels. They walk out. They unload it, put it in the trunk of the car, come back and make a second trip. So they leave out, on average, with 200 bottles in about 20 minutes.

  • 12:47:02

    NNAMDIWhy don't store clerks stop them?

  • 12:47:05

    THOMPSONWell, until this unit was established, no one knew of it in this area. So now they're becoming more vigilant and know what's going on. But still, a lot of stores, maybe they don't follow the new stores, so they don't keep up with the latest trends. And it's still going on today. We're working several cases as we speak now.

  • 12:47:24

    NNAMDIBut black market trade is nothing new, even if using laundry detergent to fuel it might be new to some people. But how does this fit into, like, a broader underground economy that most law-abiding citizens are completely oblivious to, don't know about at all?

  • 12:47:41

    THOMPSONWell, first of all, it's a product that everyone uses, like Ben says, a very popular brand. We've conducted undercover operations where the stores couldn't keep up their stock of Tide. So the thieves would steal 80 bottles of Tide and 20 bottles of Gain. At the end of the day, they would still have their Gain in their car.

  • 12:48:03

    NNAMDIBecause people wanted just the Tide.

  • 12:48:05

    THOMPSONPeople just wanted the Tide. And we had one confidential source working for us to -- we were trying to find the fence in operations who were taking in the lost quantities of Tide. And it was a confidential source that worked for us and took the Tide and traded it for drugs. And so when we conducted a search warrant, we recovered large quantities of crack cocaine, guns and large quantities of Tide detergent.

  • 12:48:33

    NNAMDII'm going to talk about that specific thing in a second. But, Ben Paynter, it's the priciest and most popular detergent on the market. But it's my understanding that the profit margin on sales of Tide is slim. How are retailers addressing this problem, and how do they sometimes, perhaps unwittingly, find themselves a part of it?

  • 12:48:54

    PAYNTERSure. You know, one of the things that Tide does if you look at the way that they're positioned is they basically -- they cost 50 percent more than the average detergent on the shelves, and they're outselling Gain 2-to-1 in market share. But, you know, like I said, they invest a lot in technology and research to make their product, you know, powerful and as good as it is.

  • 12:49:14

    PAYNTERAnd so because of that, they can't charge a whole lot or retailers can't charge a whole lot over the price that Procter & Gamble, you know, asks the retailers to pay for their product. So, you know, you're looking at a, you know, a 20, you know, if the bottle costs $20, the retailers are maybe making $2 off of that. And they need to keep their prices low because this is a loss leader item.

  • 12:49:35

    PAYNTERAnd everybody who needs detergent is going to come into the stores to buy it and then, therefore, buy other things. So, you know, as far as how the retailers sort of cope with that, I mean, you know, there is -- it is difficult. The draw for the, you know, the average guy who is running a bodega, who might actually pick up some of the stolen Tide, is really -- it's just simple math. If you're only able to make $2 on a $20 bottle but you buy it on the street for five, you're obviously making $15 more in profit just for picking up, you know, some of this product on the side.

  • 12:50:09

    NNAMDIWell, how do stores, like chain stores, get also looped into these resale schemes, Ben?

  • 12:50:16

    PAYNTERWell, there, you know, I talked to a couple different experts who've looked at that question, and it's really fascinating. One of the ways that stores these days know to reorder is a system that is basically called the perpetual inventory system. And what it means is when you take that bottle of Tide off the shelf and, you know, you scan it at a register, it's catalogued. And after your quantity goes down at a certain point, the stores know to reorder.

  • 12:50:41

    PAYNTERWhat happens when you skip a step in that process when the Tide is actually carried out of the store and it's not rang up at the register in stores, you know, first of all, they automatically restock their aisles 'cause they're not realizing what's happening, which makes it easier for thieves to go in there and steal. But second of all, they realize all the sudden that they're short products. And, you know, a number of experts have said that when that happens, you've got to source elsewhere because you need product quickly.

  • 12:51:03

    PAYNTERSo you might go to another wholesaler that you're not as familiar with. You might go to somebody who advertises online, who looks very legitimate but may not actually be. And if you are taking products from those people and you haven't carefully vetted your sources, they could easily be a front for a large-scale fencing operation that's collecting all the Tide on the street.

  • 12:51:21

    NNAMDIWell, let's go to the phones. Here is Michael in Cheverly, Md. Michael, you're on the air. Go ahead, please.

  • 12:51:27

    MICHAELOh, hi, Kojo. I like your show. I used to work for Safeway in the District for 30 years. And this was a chronic problem. Almost like clockwork at 6 a.m. when we opened the store several days a week, there'd be a team of three fellows would come in, get the large shopping carts, go right down to the Tide aisle, fill them all up, and then they'd go for different doors at the same time knowing the security guard probably wasn't there yet.

  • 12:52:00

    MICHAELAnd you'd chase one, and the other two would get away. So it's -- it was a chronic problem for us at Safeway. Also, the other way that you lose them a lot is people stick them under the grocery cart. And if you're not a careful cashier, you won't notice it's under there. And out the door it goes.

  • 12:52:21

    NNAMDIThank you very much for your call. We got an email from Evelyn, who says, "I used to represent shoplifters at D.C. Superior Court. That's how I found out that there's a brisk secondary market for individual Pampers. A lot of people can't afford to buy a big box of them. So one person steals the big box and then sells them to people who can't afford them in quantity." Sgt. Aubrey Thompson, last June, in an effort to slow the demand, you took a new approach to cracking down on this and undertook a sting at a nail salon. What did you find there?

  • 12:52:50

    THOMPSONWell, we did an undercover operation, and we sent in our undercover operatives. And we used various ones because we couldn't find out the origin of the people that were taking in the stuff. They were speaking a language that we didn't know what it was. So finally, we got a Vietnamese-speaking officer. He went undercover, and he understood everything that they were saying. And basically, they were taking in as much Tide as possible and then sending it to their stores overseas.

  • 12:53:17

    NNAMDIAnd sell in Vietnam?

  • 12:53:18

    THOMPSONYes, sir. And also, they had another scam going on. They would pay the local drug addicts or drunks to go into the dumpsters by the laundromats and get the empty containers. And then they would dilute the Tide with water. So they were making -- they were doubling the profit off of the stolen Tide.

  • 12:53:35

    NNAMDIThat was the sting that you undertook. Another thing that I understand is that because shoplifting is not consider a major crime, it's different than if these people -- 'cause they are the same people who often are drug addicts, who might normally be either holding up people or committing other crimes that are felony, whereas shoplifting apparently is not.

  • 12:53:57

    THOMPSONYes. And I want to say 99 percent of all the people that are here stealing the Tide that we're dealing with and we catching and arresting, they're hardened criminals who get five, 10, 15 years in jail, and they don't want to go back to jail for bank robbery. They don't want to sell drugs. They want high reward, low risk. Shoplifting, they keep the numbers under $1,000 when they go to steal because anything over $1,000 is a felony. And it's a high reward. You're going to sell out that Tide as soon as you leave the store.

  • 12:54:26

    NNAMDIIf they've found a way to introduce real jail time, would that be a way of heading this off if it involved more severe punishment for it?

  • 12:54:37

    THOMPSONYes, it would.

  • 12:54:38

    NNAMDIWell, since the operation that you did at the nail salon, have you see the demand for Tide on the black market slowing down at all?

  • 12:54:47

    THOMPSONIt's still out there. What our goal is and what our plan is -- just keep locking them up. Keep going to the fencing operation, doing search warrants, closing it down, taking the property back. Even if you are individual and you're buying on the street, and you buy one stolen bottle, we're going to arrest you, and we're going to take it back from you. So what we're going to do, we're going to try to take away all the places that take it -- that takes the stolen Tide in. So if we attack the problem that way, then it won't be -- the boosters won't have any place to take their stuff.

  • 12:55:19

    PAYNTERBen Paynter, what, if anything, does Procter & Gamble have to say about this?

  • 12:55:24

    PAYNTERWell, you know, they were obviously little bit reluctant speak about this issue particularly. But one of the things that one of the marketing directors did tell me was that, you know, while he didn't think it was appropriate, it did remind him that the value of the brand has stayed very consistent over the years.

  • 12:55:38

    PAYNTERAnd that's really key to how this works. I mean, if you've got a brand that is always in demand, you know, and you know that the prices aren't going to fluctuate and you know the customers are going to pay it, then as long as that brand is a popular brand, it's probably going to be used as an ad hoc currency.

  • 12:55:55

    NNAMDIAnd, Ben and Sgt. Thompson, I'd like you both to comment on this because I think you know the answer. We got a tweet from Charlotte, who said, "I hadn't heard of this Tide market, but there are stores that have body wash locked up in cases. Maybe that's the solution." First you, Ben, why is it not a solution to just lock Tide up in cases?

  • 12:56:16

    PAYNTERWell, the really obvious solution or the really obvious problem with that solution is that if you're a customer, you're going to go to the place where you can have the most convenient experience. And particularly if it's an item that you, you know, want to have and you're just doing a quick shopping trip, if you have to get somebody to unlock, you know, a case every single time you want that item, it's going to slow down your shopping trip, and you might just go elsewhere.

  • 12:56:39

    PAYNTERSo stores know that when they lock things up, they actually lose business because it's just an inconvenience. And, you know, so that might be a temporary solution to stop the theft but it's not going to make your customers happy and your goals to make your customers happy.

  • 12:56:53

    NNAMDIEspecially, Sergeant Thompson, when we're talking about 150-ounce containers, you're talking about locking up a fairly large set of items, and that can be a problems if you're going to have clerks running back there every five minutes to open it up again.

  • 12:57:04

    THOMPSONRight. Well, I'm tasked with stopping the thieves and locking them up. I can't ask the store to lock up their product. It's the same if homicide rates go up. I can't require every citizen out here to wear bulletproof vests not to be killed. So I got to do my job, the retailers have to do their job. And hopefully in a collective effort, we'll put a stop to it.

  • 12:57:28

    NNAMDISergeant Aubrey Thompson, he is the head of the Organized Retail Crime Unit of the Prince George's County Police Department. Sergeant Thompson, thank you so much for joining us.

  • 12:57:38

    THOMPSONThank you, sir.

  • 12:57:39

    NNAMDIBen Paynter is a writer and journalist. His work has appeared in numerous publications, including Wired, The Wall Street Journal and New York Magazine. Ben, do you purchase Tide yourself?

  • 12:57:50

    PAYNTERActually, I don't. But, you know, knowing what I know about it now, I might be enticed to. It's a pretty darn good product.

  • 12:57:57

    NNAMDIBen Paynter also received the 2012 James Beard Foundation Award for Environment, Food Politics and Policy Writing. Ben, thank you for joining us.

  • 12:58:06

    PAYNTERThank you very much.

  • 12:58:06

    NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.

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