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Stores have free rein to recoup shoplifting losses, but should they?

NEW YORK — Outside the view of paying customers, people accused of shoplifting at Macy's huge flagship store are escorted by security guards to cells in "Room 140," a bare room with two small, barred holding cells with wooden benches within the store, where they can be held for hours, asked to sign an admission of guilt and pay hundreds in fines, sometimes without any conclusive proof they stole anything.

As shoppers jam stores ahead for the holidays, claims of racial profiling at department stores in New York have helped expose the wide latitude that laws in at least 27 states give retailers to hold and fine shoplifting suspects, even if a person hasn't yet technically stolen anything, is wrongly accused or criminal charges are dropped.

"You must remember, these people are not police officers; they are store employees," said Faruk Usar, the attorney for a 62-year-old Turkish woman who sued Macy's, which some customers say bullied them into paying fines on the spot or harassed them with letters demanding payment. "When they are detained, they are not yet even in a real jail."

Industrywide, more than $12 billion is lost to shoplifting each year. The laws, which vary on strictness and fine amounts, allow stores to try to recoup some losses. Under New York's long-standing law, retailers may collect a penalty of five times the cost of the stolen merchandise, up to $500 per item, plus as much as $1,500 if the merchandise isn't in a condition to be sold. A conviction is not necessary to bring a civil claim.

Some customers say stores have harassed them into signing admissions of guilt in order to turn a profit — not just recoup a loss.

Retailers don't divulge how much money they recoup but use it in part to offset security costs, said Barbara Staib, spokeswoman for the National Association for Shoplifting Prevention. The total is a fraction of what they lose, she said.

But at least nine customers at the Macy's store immortalized in Miracle on 34th Street say in lawsuits that the retailer is abusing the law, wrongly targeting minorities and holding customers for hours, years after it settled similar claims brought by the state attorney general by paying a $600,000 fine and changing practices. That agreement expired in 2008.

New York Attorney General Eric Schneiderman is investigating the new claims against retailers. Last week, New York state stores agreed to post a customer "bill of rights" on their websites explicitly prohibiting profiling and unreasonable searches.

Generally, industry experts say, the laws allowing retailers to hold and fine suspected shoplifters are applied correctly.

Many retailers detain suspected shoplifters, industry experts said, but few have dedicated jail cells and most don't ask for payments on the spot like Macy's. Most of the accused receive letters in the mail demanding payment from a law firm like the one used by Macy's — Palmer, Reifler & Associates, of Orlando. That firm also represents Home Depot, Wal-Mart and many other stores and sends out about 115,000 letters per month.

Lawyers say retailers rarely sue for the money, and they often suggest letter recipients don't bother paying because refusing won't affect their credit.

$12 billion

Amount retailers lose each year

to shoplifting

5

Multiple of the cost of a stolen item that a retailer may collect in a penalty in the state of New York, up to $500 per item

$1,500

Additional amount New York retailers may collect if the returned merchandise isn't in a condition to be sold

Stores have free rein to recoup shoplifting losses, but should they? 12/16/13 [Last modified: Monday, December 16, 2013 9:04pm]

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