Fence (criminal) - Approach

Approach

The fence is able to make a profit with stolen merchandise because he is able to pay thieves a very low price for stolen goods. Thieves agree to this because their alternatives may present a greater risk of the thief being caught. As well, selling stolen goods takes a great deal of time and effort (transaction costs), as the thief would have to try to contact a number of potential buyers and show them the merchandise. Some habitual thieves are so well known to police that if the thief were to attempt to sell any used goods, this would quickly draw the attention of the police.

The fence then disguises the stolen nature of the goods, if possible, so that he or she can sell them closer to the usual wholesale price. Depending on the stolen item, the fence may attempt to remove, deface, or replace serial numbers on the stolen item before reselling it. In some cases, fences will transport the stolen items to a different city to sell them, because this lessens the likelihood that the items will be recognized. For some types of stolen goods, fences disassemble the good and sell the individual parts, because the sale of parts is less risky. For example, a stolen car or bike may be disassembled so that the parts can be sold individually. Another tactic used by some fences is to retain stolen items for some time before selling them, which lessens the likelihood that the burglary victims or police will be actively looking for the items in auctions and pawnshops.

Authorities have explained that "newer fencing operations hide from sight in legitimate businesses and show discipline and precision in their dealings." Some fences maintain a legitimate-seeming "front" through which they can sell stolen merchandise. Depending on the type of stolen merchandise a fence deals in, "front" businesses might be discount stores, used goods stores, a coin and gem store, auction houses, or auto salvage yards. The degree of illicit activity in each "front" business may differ from fence to fence. While one fence's salvage yard may consist mainly of stolen auto parts, another fence's used good store might consist mainly of legitimately purchased used goods, with the stolen merchandise acting as a minor, but profitable, sideline.

"Pricing norms and prevailing market conditions are used to determine what is 'fair,'" in terms of pricing. "Professional thieves who steal high-priced items are usually given the highest amounts—about 40% to 50% of the wholesale price. The amateur or drug addict thief who is not in a good bargaining position will receive the smallest amounts—often only ten to twenty cents on the dollar. Fences also often use chicanery to pad their profits by duping thieves (especially small-time thieves) about quality, quantity, and price." For example, a fence may falsely tell a small-time thief that the market for the type of good which the thief is selling is flooded with this type of merchandise, to justify paying out a lower price.

Research on fences shows that they view themselves as entrepreneurs, who do "wheelin' and dealin'" based on "extensive networking, developed through word of mouth, referrals, and sponsorship by underworld figures". As the title of Darrell J. Steffensmeier's book —The Fence: In the Shadow of Two Worlds—indicates, fences are the bridge between the criminal world (thieves, burglars and shoplifters) and the legitimate world (e.g., everyday people who purchase used goods). Some "major fences also play an active role in coaching thieves on techniques of theft and product identification, and in developing long-term relationships with buyers" of stolen goods.

There are a number of different types of fences. One way of categorizing fences is by the type of good they trade in (e.g., jewels, power tools, electronics). Another way of categorizing fences is by their level of involvement in buying and selling stolen goods (e.g., ranging from it being an occasional "sideline" to it being the mainstay of their criminal occupation). At the lowest level, a hustler or drug dealer may occasionally accept stolen goods. At the highest level would be a fence whose main criminal income comes from buying and selling stolen items. At the broadest level, two tiers of fences can be distinguished. The lower level of fences are those who directly buy stolen goods from thieves and burglars. At a higher level are the "master fences", who do not deal with street-level thieves, but only with other fences.

The degree to which the purchasers of the stolen goods know or suspect that the items are stolen varies. If a purchaser buys a high-quality item for a low price, in cash, from a stranger at a bar or from the back of a van, there is a higher likelihood that the items may be stolen. On the other hand, if a purchaser buys the same high-quality item for the standard retail price from a used goods store, and obtains a proper receipt, the purchaser may reasonably believe that the item is not stolen (even if, in fact, it is a stolen item).