The Shoplifting Fee

Most stores have strict rules and regulations they follow when it comes to shoplifting. The purpose of loss prevention departments is to spot thieves and recover stolen items. When a person is caught or suspected of using the five-finger discount, many stores have the very limited right to make citizen’s arrests and/or search the individual (e.g. shopkeeper’s privilege). However, some stores are no longer arresting or searching suspected shoplifters, but instead giving people a choice: they can take a $320 class and walk out scot-free, or the store calls the cops.

The Corrective Education Company (or CEC) is a Utah-based business founded by two Harvard Business graduates. The company provides classes that, they claim, reduces the chance the shoplifter will come back and steal again. The class has a fee of $320 and is completely “offender-funded”, the retailer gets a cut of $40-$50 every time they offer the class to a suspected shoplifter. If the individual agrees to take the class, they need to pay up – but at least they won’t get arrested, right? While the process may sound neat and tidy, there are some issues with it, both economic and legal.

It’s common sense that paying the $320 class fee will often seem more attractive to suspected shoplifters than having to deal with the police, regardless of whether they did steal merchandise or not. However, the retailers never have to prove that the suspects stole anything – it’s completely possible that stores could have mistaken a customer for a shoplifter. Being able to skip the process of searching the individual, calling the police and simply getting a confession seems like a more streamlined process, but prosecuting potential thieves still might be a better fit for our actual justice system and not a private firm like the CEC. Not to mention stores receive a cut from encouraging suspected shoplifters to take the CEC’s course and effectively buy their way out of an arrest. Steve Wasserman, a lawyer for the Legal Aid Society, said it seems that the CEC is “flirting with the crime of coercion in the second degree”. The CEC has been providing its services to over 20 retailers, including Whole Foods, H&M and Bloomingdale’s. However, when Slate writer Leon Neyfakh asked to interview their loss prevention departments about the process, all three declined.

The CEC has two classes, one for adults and another for minors, that focus on life skills and decision-making. “Life coaches” call the individual who agreed to take the course to set up payment and scheduling, usually the day they agree to take the course. The course is only offered if the suspected shoplifter is low-risk, with few offenses on their record. CEO Darrel Huntsman states that the CEC operates “on the premise that some good people make dumb mistakes.” Failure to complete the course results in the case going back to the respective retailer’s loss prevention department, and the police are called.

Despite possible allegations of coercion and even extortion, it’s seems a bit unlikely that the $40-$50 pay cut large retail chains get for utilizing the course would make such a difference in revenues that the stores would try and use it to their advantage. From the retailer standpoint: is the written confession and $40 fee enough to curb shoplifting and prevent loss of inventories and revenue? It’s hard to say, but the cut is arguably much less than the cost of dealing with a potential shoplifter. From a customer standpoint: when faced with the threat of being arrested, a $320 get-out-of-jail-free CEC card can seem pretty attractive, even necessary. The CEC might be making a mistake or a breakthrough by pitting economic benefit against justice and due process for large companies.

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