Is Tennessee's Opioid Crisis Fueled by Gift Card Crime?

By Paul Gaita 01/24/18

A Tennessee senator is pushing for stricter laws to curb the use of stolen goods to buy illegal opioids.

person giving a gift card

A Tennessee lawmaker is seeking to break the reported link between gift cards acquired through the sale of stolen goods and the purchase of illegal opioids.

Conversations between state legislators, lobbyists for retail stores and police spurred state Senator Richard Briggs (R-Knoxville) to introduce a bill in 2017 that would require all transactions that involved the exchange of cash for gift cards via secondhand stores or pawn shops to be registered and recorded with law enforcement.

A portion of the legislation was passed last year, but Briggs is pushing to expand the law by establishing penalties for stores that do not comply. Given the 12% increase in overdose deaths among Tennesseans between 2015 and 2016, Briggs hopes that the bill will meet no opposition this time. 

"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," said Briggs, according to the Knoxville News Sentinel

The use of this gift card technique to purchase opioids has reportedly been an issue for both retailers and law enforcement for several years, and hinges entirely on an organized, three-pronged strategy.

As the Sentinel explains it, goods are stolen from a store by one group and then given to another to return for in-store credit in the form of gift cards. The cards are then handed to a third party, which takes them to a secondary market—often pawn shops—and sells them for cash. The money is then used to purchase opioids or other drugs on the black market. 

Though no national figures exist to illustrate just how many gift cards have been exchanged for money to buy drugs, the National Retail Federation found that 57% of companies reported "fraudulent gift cards or store credit in at least one location" in 2017—a decline from previous years. The Federation estimated that such returns have cost between $9 and $15 billion a year.

CNBC reported that in Tennessee, Knox County law enforcement have traced a link between gift cards and opioid abuse in 2017. Police linked 16 of 19 overdoses that occurred that year to the sale of gift cards during a single month—while in Knoxville alone, 39 out of 98 overdoses were tracked to gift cards over a three-month period. 

The revelation left Briggs in "absolute shock," he said. "It would be no different than if there was a rock lying there. And if you lifted it up, this horrible smell came out, and this monster came out. We had no idea that the organized retail theft was related so intimately with the opiate and drug trade in general in Appalachia."

Briggs noted to the Knoxville News Sentinel that he hopes other states will take a page from the new law, should it come to pass, and adopt their own versions. In doing so, they could link a regional network of states that could track gift cards that are obtained and sold over state lines.

He also said that the law should only cover part of the state's efforts to fight the opioid crisis, and that there should also be an increase in assistance and treatment for those with dependency issues. An expansion of the Medicaid program—which the state did not take up in 2015—would help matters considerably, he said.

"If you're not on insurance, you're not going to get any rehabilitation, you're not going to get any treatment," said Briggs. "This is part of the issue too."

Democrats called for expanding Medicaid this year, but have faced opposition by Republicans over alleged abuse of the program as a means of obtaining opioids.

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Paul Gaita lives in Los Angeles. He has contributed to the Los Angeles Times, Variety, LA Weekly, and The Los Angeles Beat, among many other publications and websites.