Retail Fraud, Loss Prevention, and Criminal Prosecutions

Retail Fraud (also known as Shoplifting) is a crime committed by persons of all religious backgrounds, races, ethnicity, ages, and income level.  Throughout the United States, over a half million retail fraud incidents occur each day.  To combat retail fraud, many stores spend a lot of money in: employing loss prevention officers; training employees to detect and address retail fraud; the installation of theft detection devices (for example sensors) or equipment (for example, locked cases) to reduce the amount of theft.

Loss prevention officers are trained to identify person likely to shoplift, and conduct surveillance prior to the commission of any offense.  The typical red flags for loss prevention officers are any or a combination of the following:

1.       Nervous demeanor;

2.       Randomly selects items;

3.       Wears bulky clothing, or clothing inconsistent with the weather outside;

4.       Spends time observing the store personnel rather than shopping;

5.       Frequently comes to the store without making a purchase;

6.       Enters dressing room with clothing, and leaves with less items than the individual     came in with;

7.       Walks in an unnatural manner, which might suggest concealment under the clothing;

8.       Appear to be under the influence of alcohol or drugs;

9.       Have previously been known to steal from the store;

10.   Comes with a large group of individuals.  Often a couple members of a large group are used to distract sales associates to permit others to steal.

*    It should not be ignored that prejudice may be a factor in terms of why a particular individual is targeted by a loss prevention officer for surveillance.

There are 2 types of shoplifters that stores have to contend with: professional shoplifters, and nonprofessional shoplifters.  Professional shoplifters are individuals who either steal to support a drug addiction, or who as part of their lifestyle steal and resell the items stolen to support themselves.  Nonprofessional shoplifters are people who steal from stores for a variety of reasons: peer pressure; the thrill of stealing; mental health issues such as depression or kleptomaniacs, etc.   Often a nonprofessional shoplifter does not plan the theft in advance.  Although a frequent explanation given by an individual who is caught, poverty is rarely the true reason for the conduct.  There is a high recidivism rate for either type of shoplifter.

Retail fraud can involve conduct broader than hiding an object under clothing, in a stroller, in a purse, or other methods of concealing the merchant’s goods.  It can also involve switching pricetags on merchandise, and returning items that were never purchased for money or credit.  Other offenses that are monitored by loss prevention officers include embezzlement by employees, fraud by outside vendors stocking merchandise in the store, credit card fraud.

Loss prevention officers generally follow a routine or protocol before they confront an individual to reduce the possibility of slandering an individual, assaulting or falsely imprisoning a person (all of which could lead to a civil lawsuit).  The loss prevention officer must first see or detect the wrongful conduct.  Sometimes video equipment is used to monitor an individual from a distance and record evidence of the offense.  Detection can occur through detection devices such as sensors placed on products to notify the store of the loss.  It is the job of the loss prevention officer to see the concealment or removal of the item.  The loss prevention officer must continue to observe the person to make sure that he or she does not actually pay for the item or items in question.  Usually the individual is approached only after he or she passes all points of sale and leaves the store.  When an individual is approached by loss prevention, he or she is asked to come back into the store.  A person who struggles with or assaults a loss prevention officer, in Michigan, is often charged with Unarmed Robbery in addition to retail fraud upon arrest by a police officer.  When a weapon is involved in that struggle the offense becomes Armed Robbery.

Once an individual goes back into to the store, he or she is either detained or delayed until a police officer arrives.  The store will try to ascertain the identity of the person who they suspect stole from the store, will sometimes have the person provide a written statement describing what occurred, sign agreements to pay a civil judgment (in Michigan the amount can be $200 or 3 times the value, whichever is greater), and sign an agreement not to return to the store or else be subject to prosecution for trespassing.

When a police officer arrives at the store, he or she will conduct an investigation, which often leads to the arrest of the person accused by the store.  The accused sometimes is released with a ticket if the criminal offense is a misdemeanor in Michigan.  The ticket will contain an appearance date for the individual to appear at Court.  If the offense is a felony, the offense is a misdemeanor (in some jurisdiction), or the person has any active arrest warrants, the person accused is booked at the police stattion and fingerprinted.  Bond is set by a magistrate or a Judge at an arraignment that, in most instances, occurs within 72 hours.

Retail Fraud related misdemeanor offenses include: Retail Fraud under a local ordinance (a 93 day misdemeanor offense), Third Degree Retail Fraud (a 93 day misdemeanor offense), and Second Degree Retail Fraud (a 1 year misdemeanor offense).  Retail Fraud related Felony offenses include: First Degree Retail Fraud (a 5 year maximum offense), Organized Retail Crime (a 5 year maximum offense), Unarmed Robbery (a 15 year maximum offense), and Armed Robbery (a life maximum offense).  Felony offenders with prior felony records are subject to sentence enhancement in Michigan.

Retailers by and large choose to go forward or cooperate with a prosecution for the shoplifting or other criminal offense that happens on its’ premises.  Even if a retailer was reluctant to prosecute, that does not prohibit a prosecutor from proceeding with the case.

The sentence that a person convicted of retail fraud receives depends upon the prior record of the Defendant, the circumstances of the theft, the amount stolen, the Defendant’s background history, the judicial philosophy of the Judge, and sentencing guideliens (when applicable). Judges recognize that there are many consequences of retail fraud and store related crimes to society in general that are considered in sentencing. Retail fraud:

1. Leads to higher prices for consumers, because the cost of the loss and of loss prevention is absorbed partially in the prices we pay;

2. The city, State, and the United States loses tax revenues for losses reported from shoplifting, which causes the tax burden to be shifted to everyone;

3. Large losses sustained by a business can lead to its closing. A closed store results in the unemployment of workers. Unemployed workers cause a further strain on social services such as unemployment, food stamps, etc.

4. Police and Court’s time is consumed dealing with such offenses;

5. Customers are inconvenienced and wrongfully scrutinized by loss prevention officers and loss prevention detection equipment. Just about everyone has had the experience and embarrassment of a sensor ringing because a store employee forgot to remove it at the time of purchase.

The sentence a person receives can include incarceration (although, this is not common for a first time offender).  Probation is very common, and often requires any or all of the following: reporting to a probation officer; staying out of trouble; not leaving the Stated without permission; advising probation of any police contacts; drug and/or alcohol testing; drug and/or alcohol treatment; community service; economic crime class to educate offender to consequences of retail fraud crimes; maintaining a job or being in school; obtaining a GED or high school diploma; paying fines, costs, and restitution (if any); no contact with the store where the offense occurred; no contact with codefendants or known felons; etc.  Some individuals can have the offense expunged from their record if convicted depending upon the circumstances.

If such an allegation is made against you it is recommended that you first exercise your right to remain silent and second hire a skilled and experienced criminal defense lawyer as soon as possible after your arrest for the following reasons:

1. You have a better chance of receiving a reasonable bail or bond through effective legal representation;
2. The lawyer can prepare the case for preliminary examination (for felony cases) to work for possible dismissal, lay the groundwork for possible motions, develop testimony to impeach witnesses, and develop defenses for trial.
3. If you want to fight the case at trial, you need a skilled criminal defense attorney to prepare and conduct the trial to give you the best chance of winning.
4. If you plan to plead guilty, the Defense lawyer can work to achieve the best result through possible plea bargains, possible Cobbs agreements, persuasive lawyering, proper scoring of the Michigan Sentence Guidelines (when applicable), successful arguments concerning possible sentencing options to avoid a public conviction such as HYTA – Holmes Youthful Trainee Act and Diversion Programs, and having someone working on your behalf to try and help you avoid incarceration. Every case is different, and whether or not the factors in this paragraph apply depends upon your history, the facts of the allegation, the Prosecutor’s office, and the Judge assigned to the case.
Hiring the right criminal defense lawyer may be one of the most important decisions you make for yourself and your family. There are many lawyers who claim to do more than what they are able – just as there are many surgeons in the world that are no better than butchers. Do not settle for a legal hack job. Practicing law is a skill that develops over time with experience, commitment, dedication, and God given talent. There are no amateur attorneys at Hilf & Hilf, PLC – only professionals that are guided by the humanity in the individuals we serve, and the drive not to settle for what is easy over what is right.