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Walmart Extorts Shoplifters?
The high point of the Christmas season is over; for those people who don’t shop online and still frequent malls, today there will be a rush for people to rid themselves of the ugliest, most distasteful, and strangest gifts they’ve received. But for some folks, the thrill and satisfaction of shoplifting will have colored this season, and many retailers will have paid the price.
Until recently, Walmart Stores offered a choice to shoplifters: they could pay for and complete an education program as a result of their crimes, or face possible prosecution. Unfortunately, Walmart canceled the programs when local governments questioned whether Walmart was acting legally:
California Superior Court Judge Harold Kahn said in an August ruling that the program ‘will always be extortion per California law’ as long as it involves payment to Correction Education or retailers. Only a diversion program ‘under the aegis of prosecutorial authorities’ can request money under California law, the judge wrote.
Other governments and legislators have also been critical of the program.
The background on this situation is as follows:
Walmart hired two companies, Corrective Education Co. and Turning Point Justice, to provide training to first-time shoplifters who had been apprehended at one of their 2,000 stores; if the shoplifters preferred, they could choose to be reported to law enforcement; the great majority opted for the training. Shoplifters paid these companies $350 for their online programs; they also had to make restitution to retailers, bringing total costs to $400 to $425. Other retailers were using these companies’ services, including Burlington Coat Factory, Target, Goodwill Industries, and Bloomingdale’s. To my knowledge, Walmart is the only company that has been taken to court regarding this training and has lost.
Shoplifting has significant costs in terms of manpower and resources:
The average-sized police department spends more than $2,000 responding to a single theft, according to a tool created by RAND Corporation to calculate the cost of crime. Some field hundreds or even thousands of calls each year from retailers about shoplifters.
Police departments in communities where Turning Point and National Association of Shoplifting Prevention (NASP) offer their programs report 41 percent fewer calls from participating retailers and 70 police hours saved a month, according to the company. The police department in Arlington, TX, attributed a 50 percent reduction in retailer calls — the equivalent of more than 12,000 police hours — in part to the adoption of Corrective Education programs by Walmart.
Joe Schrauder, Walmart’s new vice president of asset protection and safety, reported:
Walmart did a small test of the education programs in stores in 2013, then rolled it out to a wider group in 2015, eventually hosting the programs in about 2,000 of its 4,700 U.S. stores. He attributed a 30% decline in shoplifting incidents in 2016 and a 15% decline this year mostly to more-visible theft deterrents, such as additional employees posted at store entrances, but said the programs had a positive impact.
Walmart is discussing ways to partner with local law enforcement organizations in order to restart the program because the costs of shoplifting continue to grow.
In addition, costs to retailers continue to rise, as reported in 2016:
Shoplifting and organized retail crime are major contributors to the external loss component of inventory shrink. The NRSS indicates that shoplifting accounted for 39 percent of the reported shrink in 2015—by far the largest contributing factor to retail loss in the survey. The average loss was about $377 per shoplifting incident, up from nearly $60 in 2014. This is the second sequential year that shoplifting has surpassed employee theft as the largest contributor to inventory shrink in the United States.
A report on shoplifting prevention documented that there were 27 million shoplifters (or, 1 in 11) in the US. The costs to police departments, shopping communities, and losses in sales taxes are immeasurable. The report also stated that the profile of a shoplifter crosses all ages and socio-economic boundaries.
The issues of costs and increases in crime are one major issue. But what does the rise in these crimes say about us as a society? Shoplifting has always existed; these reports also tell us that people who shoplift are not professionals. They do it out of greed, social pressures, and addiction. I’d also suggest there is an erosion of values, a lack of respect for boundaries and the property of others, and a missing commitment to leading a moral life.
I don’t know if there is any way to combat shoplifting from a moral or values perspective. But let’s not throw away opportunities like the Walmart training which ultimately protects those customers who are not guilty of self-centeredness and thievery. We can certainly make it more difficult for the thieves and less costly for the victims who suffer the costs of this illegal and immoral behavior.
Published in Culture
I wondered, too, and I think if you’re a potential customer they’ll share that. But it’s not openly available–protecting the merchandise, I’m sure.
While reducing shoplifting is good, I agree with the court here. If a private citizen (WalMart) threatens to prosecute someone (shoplifters), but then says – “but wait, no, we won’t prosecute if you pay money to my friends and take a class!” then the private citizen is engaged in extortion. Remember, extortion is the practice of obtaining money or some other commitment in lieu of a threat. Here, Walmart is threatening to press charges unless the alleged shoplifter agrees to pay WalMart’s friends for a class on how not to shoplift.
In my view, the local governments should hire these companies, not WalMart, and those caught shoplifting should pay for the classes if they choose to enter a plea in order to be part of the education program. Then it would look more like a diversion program for non-recidivists, and less like extortion.
One final thought – the power to prosecute is a serious power that should be watched scrupulously. When private corporate citizens decide to take it upon themselves to exercise the power to threaten incarceration, we should all, as civil libertarians, be very, very skeptical.
There are consultants, and there are consultants. I was an independent consultant myself. But I wasn’t the kind of consultant to “give advice” unless it was to fire a horrible employee. They rarely agreed, and if they did, they’d hire the same kind of person again.
I’m finally seeing your point, Larry. It makes sense. I think that Walmart wasn’t trying to do something insidious, but it does appear it was illegal. Do you think it’s illegal in other states, too; it sounds like it would be. I don’t think Walmart is doing it for the money (although the training companies surely are), and that they would be happy, as their VP indicated to find a way to make the whole process work, legally. It saves everyone a lot of grief and dollars.
@larry3435 and @Franco are exactly correct in their comments. Mike Pesca on Slate’s the Gist podcast had a funny monologue about this story where he used some of the sound from these companies’ promotional materials. I highly recommend giving it a listen. I think the air date was Thursday, 12/22. Merry Christmas everyone!
And yes, I still don’t like Trump, I’m just less apoplectic about it because he has delegated so much to Mike Pence, someone I trust.
Should be.
Isn’t.
The exercise of prosecutorial discretion is both powerful and too frequently political.
See: THREE FELONIES A DAY by Harvey Silverglate. Or almost any daily newspaper.
I’m glad we have a meeting of the minds Susan. As much as I hold a lot of California law in contempt (California is where I have practiced for my entire career), on this point I think the same result would follow in every US jurisdiction. And I agree that Wal-Mart was trying to do something good (or at least something that would benefit retail businesses, including itself). I have to admit, though, that I am highly skeptical that this “education” program would do very much to deter shoplifters. Years ago I attended traffic school to expunge a ticket, and I can’t say it affected my driving habits very much.
For those shoplifters who are not kelptos, maybe just getting caught will make them rethink their habits. But there are some who are just not going to be deterred. There are many stories of wealthy, high profile people who have no conceivable reason to be shoplifting (Lindsay Lohan, Megan Fox, Winona Ryder, Brittany Spears, among many others) who have been caught shoplifting (some of them repeatedly). Sometimes there are mental or emotional issues at work in this crime, which education is not going to fix.
Then how do we account for the drop in shoplifting numbers when people have taken the training? I suppose the training companies can mess with the statistics, but police departments are documenting reductions in arrests and Walmart says the numbers are down (and how would they benefit from lying). If the training didn’t affect recidivism, the numbers wouldn’t be dropping so drastically. And people shoplift for all kinds of reasons, across segments of society, so the high profile people are just as foolish as anyone else.
I took the driving course, too, to get out of a fine or points. I actually do remember some key points that have probably kept me from getting additional tickets. Whether that makes me a better driver is up for grabs!
You know we are always saying “There is a free market alternative to your government program” and they are always saying “well yer a doo doo head!” Yeah, this is another example.
As for the legal definition of extortion, let’s review the other post kicking around ricochet regarding “nuanced thinking.”
As for “profit motive” please refer to the old axion “where there is no profit motive, there is no accountability.”
As for thieves, let’s go back to chopping of their hands, then.
These companies should be trying to get govt. contacts, not contracts from WalMart. It’s not that it does not work for many people, it’s the fact that WalMart is not the government. Thank goodness.
The program is fine in principle, the problem is that WalMart can’t prosecute people, only the government can. Therefore, WalMart can’t threaten to prosecute you without extorting you. Believe me, you don’t want every Fortune 500 company out there to use prosecution as a litigation tool.
@Susan Quinn
This whole thing reminds me of the recently (until unplugged) private companies that sold the “red light violation” traffic monitoring services to local governments. It was especially popular in the South, and came with a nifty privately run “hearing” for offenders with tag numbers caught on camera. Of course there was great creativity shown by the companies that came up with this, sold the infrastructure, and ran the “hearings.” And the laudable government, inc. goal of decreased light-running did seem to happen.
However the public was aroused and finally a furious person or two got outraged enough to take the issue of the setup to (real) court. You would think even the clueless cities who got a side fee for allowing access to their intersections could have seen this coming (or their lawyers). It turned out they didn’t have the standing to hand off policing and legal resolutions to a contractor in this way.
Of course some enthusiasm was lost in at least one county where an opponent discovered an obscure law that said even if the practice continued, all such “fees” had to go to the school system, not the city government anyway. So the urban areas claim of saving local taxpayers by reducing debt with the proceeds from the arrangement became false. The cameras got yanked and all the school system got was a one-time gift package from the experiment, not a continuing source of money to add on more “multimedia additions” etc.
I haven’t seen these statistics, so I don’t know. But I do believe in the aphorism about “lies, damn lies, and statistics.” As I said, just getting caught for the first time might be a significant deterrent against recidivism. I can even see how some people might be more inclined to shoplift, if they know in advance that the worst that could happen is that they might have to take a class.
I suspect this is the direction they will try to go, Josh. Now that it appears to work, I hope the government will at least consider it.
Wal-Mart wasn’t prosecuting people. They were choosing not to press charges. In favor of a solution that had the potential to put people on a better footing than going through “the system.” I find it hard to understand why a good conservative like yourself would say “they should seek a government contract.” More government programs are the last thing we need.
Because we know how well government rehabilitation programs work.
But if they hadn’t messed up the fee appropriation, I think it made sense. The cities or counties just got greedy. If the idea is to deter speeding through lights, and the offenders have to pay for it, just use those funds to pay off the cameras over time and when that happens, the funds can go to some part of government. The law-abiding taxpayers won’t pay for it. Am I missing something?
Let me rephrase. WalMart can’t threaten to prosecute people. Only the government can.
@Spin – A big part of conservatism is a respect for the separation of powers. Even at the state level, this principle applies – the legislative, executive, and judicial powers are separated. This is to protect the individual and his or her liberty. A corollary of the separation of powers is called the non-delegation doctrine. In essence, it means that the branch charged under the constitution with a power – be it legislative, judicial, or executive – cannot take the whole of that power and delegate it to another. In this instance, WalMart is acting, via extortion, as if the local government had given it the plenary power to decide what shoplifters to report to law enforcement, and what shoplifters to divert into its education program. WalMart is, in effect, exercising the prosecutorial discretion that is a core executive function. If the local prosecutor or district attorney decided to hire a private company to run its diversion program, then the electorally accountable prosecutor would answer to the voters on whether that was a good idea or not. Most importantly for non-delegation purposes, the private companies running the education programs would be directly overseen by the prosecutor. Remember, under the state constitution, the elected or appointed prosecutor has the executive law enforcement function given to them by the people of the state. To my knowledge, no state has delegated law enforcement powers to anyone other than a prosecutor or a district attorney. WalMart, via threatening to prosecute, cannot receive the power to prosecute in this fashion without seriously undermining the separation of powers by running afoul of the nondelegation doctrine.
Those two businesses are contractors, not consultants. Any “consulting” they did was really sales, and Walmart’s corporate culture is such that they would have known the difference. Walmart is known for their hard nosed attitude towards contractors of any kind. Their employees aren’t even allowed to go to lunch with an outside contractor or consultant.
Your RN example sounds like a small firm, and is more vulnerable to snake oil. I can’t see a large corporation like Walmart falling for something like that.
Nor have you refuted my argument about your being a problem fixer and not seeing when things go right with a consultant.
Well, I guess you told me!
Me too. And I am not a lawyer. My husband worked for a company whose consultant advised going to a customer’s place of business to collect payments to reduce deliquencies. If someone showed up where I worked to disturb my workday to collect a payment, my employer would be livid, not to mention the embarrassment.
If I understand you correctly, there are also laws against doing that in a lot of jurisdictions. Collection agencies are pretty heavily regulated in the tactics they can use.
Thank you for responding, @larry3435. You’re being generous to share your expertise with us laypersons :-) I would have thought intent to trap someone into doing something against their will part of extortion.
Is there no legal way for a business to address any level of wrongdoing without reporting it to the police? If not, forgive me for saying, but I begin to see how our legal system is backlogged and broken.
They weren’t threatening to prosecute people. They were saying “We won’t press charges if you do this thing which will help you.”
I’ll say it again: they aren’t threatening to prosecute. They can’t prosecute. They can choose not to press charges, though.
All lawyers deserve to be told. ;-)
Yes. When the government has a financial incentive to give out tickets, you are going to get stricter laws as they become dependent on revenue.
They don’t really want the red light violators to stop, as evidenced by the many controversies of them shortening yellow light times. There was also the problem of people stoping abruptly to avoid a ticket and having large increases of rear-end collisions. That these municipalities were slow to rectify these issues shows lack of care for overall public safety.
You’re correct, Franco. I forgot about these factors. My naivete, too. Count on government to make a potentially good idea, bad. Unfortunately, if someone stops abruptly, the guy behind him is almost always “at fault.” Rats.
Yeah, probably. Probably everyone else too.
Just for the record, all consultants are contractors – by definition. Anyone who performs services is either an employee or a contractor. The term consultant is never used to refer to an employee. As an attorney, I am a contractor to my clients. And, I suppose, also a consultant of a sort. But I never said that consultants always give bad advice. What I said was that if a company is doing something stupid, the idea often came from a consultant.