New Tennessee law would aim to break link between gift cards and opioids

Several lawmakers were approached by lobbyists from a block of retail giants during the state legislative session last spring.

The group, made up of representatives of Target, Walmart, Lowes and Home Depot, was seeking a law that would enhance penalties for organized crime, which had cost them some $200 million in stolen goods in 2016 in Tennessee alone.

Shortly after beginning to look into their request, lawmakers realized they had stumbled upon a much bigger problem: There was a link between theft and the state’s blossoming opioid epidemic.

Gift cards for drugs

Sen. Richard Briggs, R-Knoxville, said the process of stealing millions from large retailers is simple but takes a sophisticated operation. Items are stolen by one group and returned for in-store credit by another. A third group then takes the in-store credit gift cards to a third party (oftentimes a pawn shop) and sells the cards for cash.

He said the $200 million lost equals approximately $14 million in lost sales tax revenue for the state.

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After a day of discussion in Nashville last year, Briggs said he was approached by a law enforcement officer who told him about the connection between these gift cards, the cash they bring and the opioid epidemic.

Between April and June last year there were 98 overdoses in Knoxville. In all but 17 of the cases, the individuals had recent pawn shop or secondhand-store transactions, Briggs said. Of the 98 individuals, 39 had transactions that included gift cards.

"We’re not talking about the 14-year-old who shoplifts. … What we’re looking at is organized crime where they come into (cities) and they hit these stores,” he said.

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The Knox County Sheriff's Office arrested more than 430 people from Nov. 20 to Dec. 30 for shoplifting, many of whom were seeking to fuel their opioid addictions, according to Chief of Administration Lee Tramel.

The legislature passed a portion of Briggs’ bill last year requiring third-party buyers and sellers of these in-store credit cards to register and record the transactions, but there was no teeth in the legislation, Briggs said. So he’s pushing the legislation again, this time hoping to get built-in penalties for the bill so it can be enforced. He’s not expecting any pushback.

“Just about everybody now is recognizing that this opioid crisis is one of the most serious in the United States, but particularly in Appalachia, it is the most serious problem we have,” he said.

Enforcing with teeth

Karen Pershing, executive director of Knoxville’s Metro Drug Coalition, learned of the gift card-fueled drug problem from Briggs. Armed with her new knowledge, she spoke to people in recovery and found how common the cards are among users.

Anything to help fight the crisis is helpful, she said.

“It’s just such a complex issue, and you really have to attack it from a lot of different angles,” she said.

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Rep. Jason Zachary, R-Knoxville, is sponsoring Briggs' bill in the House. He said it is a "must pass" for the state and said gift cards are the "primary driver" for the opioid crisis.

"There is a collective effort to target the various aspects of this problem," he said. "It's such a big problem, and Tennessee is the epicenter of the problem for the country."

The law will be helped by fairly new technology that allows law enforcement officials to track the gift cards and see where they end up. Knox County currently has technology that assists with this, but doesn’t cross county lines. Briggs said the law and enforcement need to be statewide.

TBI spokesperson Leslie Earhart said the agency has been approached about the legislation by Briggs.

“The opioid epidemic continues to be a major concern for the TBI,” she said in an emailed statement. “Using the resources we have available, we are doing everything we can to address the issue from an enforcement standpoint.”

Briggs’ bill was slapped with an $88,300 fiscal note to pay for enforcement, a number he said is small when you look at the bigger picture.

“We’re saving somewhere between $14-$25 million, and $14 million was on the low side,” he said. “And we’d be saving (these) retailers $200 million at least. That completely wipes out the $88,300.

“And besides, this is funding the drug trade. Even if it does cost $88,300, wouldn’t it be worth it?”

Regional network?

Briggs said other states, including Georgia and Florida, are watching Tennessee closely to see how the law is approved and how it works. He said he’s hoping for a regional network of states that can help track gift cards over state lines.

For all the good the state is doing to limit the growing opioid epidemic, Briggs said Tennessee is behind on treatment and helping those who are already addicted.

Treatment is expensive and likely requires monthlong inpatient treatment, not a quick three-day detox, he said. Medicaid expansion would have helped the state tremendously, he said.

“This is part of the issue, too. We did not expand Medicaid (in 2015). … If you’re not on insurance, you’re not going to get any rehabilitation, you’re not going to get any treatment,” he said.

“A lot of the people, particularly the adults who got hooked on it, either in midlife had a major health problem where they were on (pain pills) for a long time or they went to their doctor and did exactly what their family doctor told them,” he said. “The people aren’t taking the pills to get high; they’re taking the pills now to stop the withdrawal.”

Democrats began this year’s session with a renewed call for Medicaid expansion, but the Republican-dominated legislature doesn’t appear likely to take up the issue.