Item 4: Ordinance Concerning Used Merchandise Dealers

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THE CONCERNS OF SOME USED MERCHANDISE DEALERS Of the 70+ used merchandise dealers affected by the ordinance and invited to participate in the meetings relating to the Used Merchandise Dealer Ordinance, only representatives from six stores expressed opposition to the implementation of the ordinance. The three primary concerns voiced by secondhand dealers opposed to the ordinance, were the expenses of automated reporting, the use of a Canadian company as the automated reporting system vendor and the privacy of individual store business and customer records. The Funding Model for Automated Reporting -- The funding model originally required that individual stores pay for the cost of automated reporting in the form of a transaction fee for every pawn, repawn, consignment, recycle or purchase that the store makes from the public. The ordinance would have allowed the individual stores to recover the cost of automated reporting from the customer selling property to the store. However, following extensive discussion with store owners on this model, the vendor developed an alternative model for a set annual fee based upon the history of annual store transactions. Eugene found this to be a viable option after analyzing the funding currently available for the program and factoring the potential savings in staff time. Store owners who had been opposed to the transaction fee funding model found the annual set-fee model more viable and withdrew most objections to the proposed ordinance. The Use of a Canadian Automated Reporting Company -- Business Watch International’s (BWI) automated reporting system was chosen for the pilot project because they had a product that was successfully operating in other jurisdictions and one that met the needs of Eugene, Springfield and Lane County law enforcement. Additionally, during the pilot project BWI continued to improve and refine their product to meet the needs of local law enforcement and the pawn/secondhand dealer industry, while reducing their operational costs. Although BWI is a Canadian-based company they are licensed in the United States and have business operations in other U.S. cities. Privacy of Business and Customer Records -- The information obtained through automated reporting includes essentially the same public record information that law enforcement is currently collecting from used merchandise dealers. The difference is some updating and reformatting of information and the submission via a secure internet connection. The vendor chosen by the city of Eugene will act as a warehousing/storage company that releases only reportable information to law enforcement. Businesses that choose to utilize BWI’s point- of-sale systems may submit business records to BWI which remain the sole property of the individual store and none of that information can be released without the consent of the individual store. Some merchants have expressed concerns that requiring the previously optional report of the merchant’s purchase price in the automated report violates their protection of proprietary information. Police have the authority to further the public’s health, safety and welfare. Other jurisdictions in the state require the collection of pricing information and the state of Oregon requires the information for “pawnbrokers”. Reporting requirements contained in the ordinance are similar to other requirements upheld in other jurisdictions around the country. The benefit to law enforcement from this information is significant in the discovery of possible stolen property. For example trained investigators are alerted when expensive construction tools, still sealed in original wrappings, are purchased by used merchandise dealers for a very small price.