SENATE JUDICIARY COMMITTEE
STATEMENT TO
SENATE, No. 3587
with committee amendments
STATE OF NEW JERSEY
DATED: FEBRUARY 20, 2025
The Senate Judiciary Committee reports favorably and with committee amendments Senate Bill No. 3587.
This bill, as amended, makes various changes to State law related to retail theft. The bill upgrades certain crimes related to retail theft, permits certain defendants to be sentenced to extended terms of imprisonment, addresses gift card fraud, and provides for the Attorney General to take actions to promote the effective investigation, prosecution, and deterrence of organized retail theft.
Aggravated Assault of Store Employees
The bill upgrades any simple assault to an aggravated assault when committed against an employee of a store or other retail mercantile establishment. An employee is defined as “any person who provides customer assistance, store management, visual merchandising, loss prevention or security services, whether in uniform or in plain clothes, or who acts as a cashier, salesperson, or team associate or otherwise interacts with customers for or on behalf of the store or other retail mercantile establishment.”
Aggravated assault of an employee of a store or other retail mercantile establishment is a crime of the third degree if the victim suffers bodily injury, otherwise it is a crime of the fourth degree. A third degree crime is ordinarily punishable by three to five years imprisonment, a fine of up to $15,000, or both. A fourth degree crime is ordinarily punishable by a term of imprisonment of up to 18 months, a fine of up to $10,000, or both.
Tax Evasion; Failure to Turnover Taxes Collected or Withheld
The bill upgrades to a second-degree crime the failure to pay any portion of a tax, fee, penalty, or interest due or required to be paid or turned over if accrued through conduct committed in connection with being the leader of an organized retail theft enterprise. Under current law, the failure by anyone to pay or turn over such is a third-degree crime.
Relatedly, the bill upgrades to a second-degree crime a purposeful failure to turn over taxes to the State that were collected or withheld as part of an organized retail theft enterprise, regardless of the amount collected or withheld. Under current law, this act constitutes a second-degree crime only if the amount collected or withheld is $75,000 or more, otherwise it is a third-degree crime.
For both related acts, the second-degree crime is ordinarily punishable by five to 10 years imprisonment, a fine of up to $150,000, or both.
Persistent Offender
The bill provides that a person may be sentenced to an extended term of imprisonment for repeat convictions related to retail theft.
Under the bill, a person is considered to be a persistent offender if the person has previously been convicted on two or more prior and separate occasions of receiving stolen property, a second- or third-degree shoplifting crime, being a leader of an organized retail theft enterprise, or theft that involves the stealing of merchandise, regardless of the dates of the convictions, and the person is currently facing conviction again for having committed one of those offenses or shoplifting that constitutes a lower fourth-degree crime or disorderly persons offense. A persistent offender may be sentenced to an extended term, upon motion of the prosecutor, if the crime for which the person is currently being sentenced was committed either: (1) within 10 years of the date of the defendant’s last release from confinement for the commission of any crime; or (2) within 10 years of the date of the commission of the most recent retail theft crime described above for which the defendant has a prior conviction.
Aggregation of Merchandise Value to Grade Shoplifting Violations
The bill provides that the value of merchandise involved in a violation or in multiple violations may be aggregated to determine the grade of a shoplifting offense (with a higher value triggering a more serious grading and level of punishment), when the acts or conduct constituting a violation were committed pursuant to “one scheme or course of conduct, whether from the same person or several persons and regardless of the time period” over which the scheme or course of conduct occurred.
Fencing
The bill updates the fencing statute, section 7 of P.L.1981, c.167 (C.2C:20-7.1), to clarify that a person is guilty of dealing in stolen property if done so through the use of an online platform via any electronic device or through a social media site. A fencing violation is graded similarly to shoplifting (and other theft offenses) in that the value of the property involved determines the grading level of the offense, and this value may be aggregated when the acts or conduct constituting a violation were committed pursuant to one scheme or course of conduct.
Fostering Stolen Property
The bill also separately establishes the new offense of fostering the sale of stolen property. The act would be graded as a disorderly persons offense, and punishable by a term of imprisonment of up to six months, a fine of up to $1,000, or both.
A person commits a fostering offense under the bill when, acting alone or in concert with another person, the person advertises or otherwise assists, by any means, in the sale of property of another knowing that it has been stolen or reasonably believing that it is stolen. The bill establishes two presumptions that may be used in prosecuting a fostering offense:
- proof of the property being advertised for sale at a price substantially below its fair market value, unless satisfactorily explained, gives rise to an inference that the person advertising or otherwise assisting in the sale of the property knew that it is stolen or reasonably believed that it is stolen; and
- proof that a person advertised or otherwise assisted in the sale of the property without having ascertained by reasonable inquiry that the person offering the property for sale had a legal right to possess or control it creates an inference that such person knew that it was stolen or reasonably believed that it is stolen.
Gift Card Fraud
The bill requires the Division of Consumer Affairs in the Department of Law and Public Safety to create and make available on the division’s website a notice for customers of retail mercantile establishments concerning the risk of “gift card scams” and available sources of assistance if a customer suspects being the victim of a scam. An establishment would be required to display the notice at or near the physical location where the gift card is displayed for sale or where the sales transaction takes place as well as display it on the Internet webpage where the gift card is offered or before the sale is finalized.
The bill would also impose certain packaging requirements for sales of gift cards or alternatively require the cards to include security features or be secured in a physical location accessible only by the employees of a retail mercantile establishment. A retail mercantile establishment could not display or sell a gift card unless:
- the card or its packaging includes, in a manner visible to potential purchasers when on display, a warning that states “Do not sell or purchase if the gift card or its packaging has been broken or indicates tampering” or that uses substantially similar language;
- the card, if enclosed in packaging, is sealed in a manner that is not easily opened, removed, or replaced without signs of tampering; and
- regardless of “whether the gift card is or is not enclosed in packaging, all visible numbers such as a card number, CVV number, or a PIN number that can be used for balance inquiries or manual entry redemption are either fully concealed or covered, or otherwise made unavailable prior to sale or, only if the gift card is enclosed in packaging that is designed to make the gift card more secure than full concealment or covering otherwise would, are partially concealed or covered.”
A gift card that is not secured as heretofore described could be sold if it is a chip-enabled, numberless card that is activated after registration on the card issuer’s website, the gift card is sold exclusively by a retail mercantile establishment for use only at that establishment or sold by a group of affiliated establishments for use at those affiliated establishments and is secured in a physical location within an establishment that is accessible only by employees, or the card or its packaging incorporates technology to either prevent activation if the card or packaging has been tampered with or is designed to detect and prevent unauthorized redemption.
A retail mercantile establishment that violates any of the bill’s provisions related to consumer notices on gift card fraud or the sales of gift cards would be subject to a civil penalty of $1,000, collected and enforced by the Director of the Division of Consumer Affairs.
The bill also establishes requirements for third-party gift card resellers. The bill defines a third-party gift card reseller as a “merchant who, without authorization from or affiliation with the business entity issuing a gift card, is engaged in the business of: (1) buying gift cards on behalf of consumers; or (2) reselling gift cards to consumers.” These resellers would be subject to certain record maintenance requirements, generally retaining records for at least three years, for transactions occurring in this State, which would include information about: the transaction date; the transaction price; the name, age, and address of the gift card seller; the seller’s and consumer’s driver’s license number or identification card number; the consumer’s signature; and the specified amount issued on the gift card. These resellers would be prohibited from refusing to allow any duly authorized law enforcement officer in this State to inspect a record of information as well as any gift cards in its possession.
Attorney General Initiatives
The bill requires the Attorney General, in consultation with the Director of the Division of Criminal Justice, to undertake actions the Attorney General deems appropriate to promote the effective investigation, prosecution, and deterrence of organized retail theft in this State. These actions could include establishing a retail theft unit, task force, or other appropriate office or an initiative in the Department of Law and Public Safety. The Attorney General could also implement a Statewide policy to direct and coordinate State and local law enforcement efforts to investigate and prosecute organized retail theft. In furtherance of coordinating such efforts, the bill would require county prosecutors to notify the Division of Criminal Justice or other entity within the department designated by the Attorney General that a retail theft crime involving shoplifting, theft of merchandise under the general theft statutes in chapter 20 of Title 2C of the New Jersey Statutes, or leader of an organized retail theft enterprise, was allegedly committed by a defendant if: (1) there is probable cause that the defendant committed two or more acts of retail theft in this State or one or more acts in this State plus one or more such acts in another state; or (2) the defendant has previously been convicted of retail theft in this State or another state.
Effective Date
While the bill generally takes effect immediately, the sections dealing with gift card fraud would remain inoperative until October 1, 2025 and the provisions concerning potential actions by the Attorney General to promote the effective investigation, prosecution, and deterrence of organized retail theft would take effect on the 180th day after the date of enactment.
The committee amendments to the bill:
- expressly indicate that a person may be guilty of fostering the sale of stolen property by “acting alone or in concert with another person or persons” and acting “by any means” including online platforms;
- establish as an element of the fostering offense that the person either knows the property is stolen or reasonably believing that it is stolen;
- create two presumptions concerning a determination of a defendant’s mental state for a fostering offense: (1) when the person knows property was advertised for sale at a price substantially below its fair market value; and (2) when the person fails to ascertain by reasonable inquiry that the person offering the property for sale had a legal right to possess or control it;
- expand the upgrading of an assault on an employee of a retail mercantile establishment to include the assault against an employee of any store where merchandise is displayed, held, stored or sold or offered to the public for sale (see N.J.S.2C:20-11 for the relevant definition of “store or other retail mercantile establishment”);
- eliminate, for shoplifting offenses involving one scheme or course of conduct, the aggregation of the value of merchandise involved over only a previous one-year period for grading violations and instead permit aggregation without regard to the time period over which the actions occurred;
- remove the section that would have upgraded the crime of leader of an organized retail theft enterprise from a second-degree to a first-degree crime;
- provide that the Attorney General shall “undertake steps . . . deem[ed] appropriate” to promote the effective investigation, prosecution, and deterrence of organized retail theft instead of requiring the creation of a retail theft unit or other office to address organized retail theft;
- require that the new consumer notice on gift card fraud created by the Director of the Division of Consumer Affairs be made available on the division’s Internet website;
- eliminate the separate definitions and packing and security requirements for “open-loop” and “closed-loop” gift cards, and instead apply the bill’s requirements uniformly to all gift cards;
- mandate that a third-party gift card reseller preserve and provide, upon the request of law enforcement, all relevant evidence when it is conducting an investigation into allegations of gift card theft;
- eliminate a $1,000,000 appropriation to support administration of the bill;
- revise the effective date so that the sections dealing with gift card fraud would remain inoperative until October 1, 2025 and the provisions concerning potential actions by the Attorney General to promote the effective investigation, prosecution, and deterrence of organized retail theft would take effect on the 180th day after the date of enactment; and
- update the synopsis to reflect the changes made by the committee amendments.