Falsely accused of shoplifting, retailers still demand they pay
MOBILE, Ala. — Crystal Thompson was at home watching the Rose Bowl Parade when a county sheriff came to arrest her on a charge of shoplifting from the local Walmart.
Thompson, 43, was baffled and scared. An agoraphobic, she had not shopped at a Walmart in more than a year. She was taken to a Mobile jail, searched, held in a small room and required to remove her false teeth, something she didn’t even do in front of her husband.
Four days after she returned home, the letters from Walmart’s lawyer started to arrive. The lawyer demanded Thompson pay the company $200 or face a possible lawsuit. She received three letters over two months in early 2016.
Shoplifting is an intractable problem for retailers, costing stores more than $17 billion a year, according to an industry estimate. To get the money back, many companies employ aggressive legal tactics and take advantage of loosely written state laws, pushing for restitution even when people have not been convicted of wrongdoing.
Many of the laws were established so retailers could pursue shoplifters without clogging up the courts. Retailers, though, often move on both fronts, pressing criminal charges against suspects while demanding that they pay up before cases are resolved.
In many states, retailers do not have to return the money they collect if the cases are ultimately dismissed or the people are cleared. A Walmart executive, in a court deposition, acknowledged that the company did not follow up to check on whether people it sought money from had been convicted of shoplifting.
Walmart and other companies have created well-oiled operations, hiring law firms to send tens of thousands of letters a year. Walmart set a collection goal of about $6 million in 2016 for one of its go-to firms, Palmer Reifler & Associates, according to a court paper filed as part of a lawsuit Thompson brought against the retailer.
“It is my word against this company,” said Thompson, whose criminal case was dismissed after no one from Walmart appeared at a hearing to testify against her. “I’m nobody special. I didn’t feel like I had a prayer.”
Walmart declined to comment on individual cases, citing continuing litigation.
“While there are multiple steps that our associates follow before initiating a civil claim against a customer, people can make mistakes,” the company said in a statement. “We are deeply sorry when that happens. We continually evaluate the effectiveness and benefit of our programs.”
Starting decades ago, the retail industry lobbied state legislatures for legal recourse to pursue shoplifters with fines. Retailers argued that the penalties would go a long way toward deterring future theft and that rampant shoplifting ate into already thin profit margins, potentially raising prices for consumers.
In some states, companies have been able to collect more than the value of the allegedly stolen items, up to $1,000 in some instances. Despite numerous lawsuits against retailers and news reports about collection tactics, the laws have remained largely intact.
Maryland is one of the few states to revise its shoplifting statutes. In 2016, the state began requiring retailers to report the number of collection letters they send. To date, no retailer has complied with the new requirements, according to state records.
In Illinois, a 2015 proposal to reduce the penalties that retailers can demand from shoplifting suspects died in the Legislature. One of the bill’s sponsors said an industry lobbyist had warned him that the issue was a “third rail” among retailers with deep political influence in the state.