In defending persons accused of retail fraud, it is important to understand the procedures used by major retail stores in their investigations. Mistakes in judgment sometimes occur – leading to false arrests. Sometimes the situation is misinterpreted by loss prevention and police officers due to cultural issues. Procedural errors can sometimes also lead to acquittal or dismissal of the case. Having an experienced criminal lawyer, such as the lawyers at Hilf & Hilf, PLC, often results in receiving the best possible result, which often can include not having a conviction appear on a public record. A theft related conviction can result in imprisonment, probation, loss of employment opportunities, loss of education opportunities, loss of gun rights, loss of money, immigration complications for non-citizens, and embarrassment.
Major retail stores have developed policies and procedures with respect to retail fraud with the goals of: reducing losses due to theft; avoiding litigation for false arrests, false imprisonment, injuries, etc.; reducing insurance expenses; and deterring theft. Major retail stores include Sears, JcPenney, Target, Home Depot, Lowes, Macys, Kohls, Best Buy, etc. The information in this blog is only intended to provide general information and does not represent the views, policies, decision making, or procedures of any particular store or company.
It is important to have an experienced criminal lawyer, such as Attorney Daniel Hilf of the law firm Hilf & Hilf, PLC, who understands the policies and procedures of loss prevention/asset prevention. Knowledge of these areas can help build a successful defense, or a successful outcome, to your retail fraud case.
Theft within retail businesses can occur in several different ways: concealment and removal of merchandise by shoppers; switching price tags; return of items not purchased; and embezzlement/employee theft. To combat theft, retail stores have become more and more sophisticated in their ability to respond. Major retail stores employ a number of trained, plain clothed, loss prevention officers to investigate and detain persons suspected of theft. The loss prevention officers use a number of devices to aid in the investigations such as recorded video surveillance (both inside and outside the store) and sensor devices.
A typical loss prevention officer will not approach a customer until all of the following occur:
1) observe customer approach the merchandise. When the customer is suspected of committing previous offenses, sometimes the observation begins as soon as the person is detected in the store.
2) observe customer select the merchandise. This is important, because the loss prevention officer wants to be sure that the customer did not enter the store with merchandise already in hand to make a return or an exchange of something previously purchased.
3) observe customer either conceal the merchandise, carry the merchandise away, or alter the price tag.
4) maintain the customer under constant uninterrupted observation. There are areas that may not be under surveillance such as fitting rooms and bathrooms. The loss prevention officer will usually work with other team members to make sure the merchandise involved was not left behind in the fitting room or bathroom. The loss prevention officer will also check to see if there were any removed loss prevention devices. The removal of a theft detection device by someone intending to commit a retail fraud is a separate criminal offense in Michigan.
5) observe the customer fail to pay for the item and pass all points of possible sale, makes a fraudulent return, or makes a fraudulent purchase (in cases where the price tag was altered).
6) approach the customer outside of the store. The loss prevention officer usually waits until the person is outside to ensure that the offense was actually committed, and to reduce the risk of harm to other employees or customers if the customer acts violently. In Michigan, if a person uses violence to escape or flee after committing a retail fraud, he or she can be charged with unarmed robbery. If the person uses a dangerous weapon to escape or flee from a retail fraud, the potential charge can escalate to armed robbery.
A loss prevention officer typically will identify himself or herself as a loss prevention officer and ask the individual to return to the store to discuss and resolve the issue concerning the alleged theft. The loss prevention officer will (again) make sure the crime was actually committed, identify the perpetrator of the theft, recover the merchandise, try to obtain a verbal and/or written confession from the suspect, obtain verbal and/or written statements from other employees with knowledge of the offense, preserve evidence (photograph the merchandise, preserve any removed price tags or theft detection devices), add up the value of the merchandise in question, write an incident report, and contact the police. It is not advisible for a person accused of retail fraud to make any verbal or written admissions to the offense to a loss prevention officer and/or the police. A person has a 5th Amendment privilege not to incriminate themselves.
The loss prevention officer is instructed to act in a professional, respectful manner. If the person apprehended needs water, medication, medical treatment, to use the bathroom, or to make a phone call – the request is handled in an appropriate manner. Once a police officer arrives, the person is usually either released with a ticket or taken into custody and booked. Sometimes the person is physically searched for weapons or property. Some companies instruct loss prevention personnel not to search a person, and wait for the police, due to concerns of injury or liability if the loss prevention officer was injured by a concealed needle or weapon. Drug paraphernalia carried by shoplifters such as needles is not uncommon, because theft is often a method used to support a drug habit.
A loss prevention officer may be limited by law in the amount of force he or she can use to effectuate the detention of a retail fraud suspect. The policy of many stores is to not allow a loss prevention officer to use force. Any force used, if authorized by the store, is detain the person or for purposes of self defense. Many stores will allow the use of handcuffs, if necessary, to prevent injury to others, to address an alleged shoplifter who is acting violent or resisting, or if the loss prevention officer feels there is a risk of serious harm if handcuffs are not used. Typically, a loss prevention officer is not armed with a weapon such as a baton or gun.
In many instances a loss prevention officer is instructed not to chase a retail fraud suspect due to a risk of injury that could occur from the pursuit. In some cases there is a fear that the person being pursued is serving as a distraction to occupy loss prevention officers while other crimes are taking place by accomplices. In Michigan, individuals that work in concert with one another to commit retail frauds can be charged with the offense of Organized Retail Fraud. Also, one of the factors in determining the severity of the retail fraud charge is the retail value of the merchandise which is intended to be stolen. If multiple offenders are involved together , the total retail amount can be add together to determine the severity of the offense for each of the alleged offenders.
If the person successfully flees, the loss prevention officer will usually contact the police and give a physical description of the person involved with the offense, a physical description of any potential accomplices, the description of any car involved in the escape (make, model, plate number, car condition, etc.). From this information the police will conduct an investigation and make a stop and/or arrest if there is a determination that a particular individual potentially committed a particular offense within the jurisdiction of the police agency/local court.
It is the role of the prosecutor, not the store, to determine what (if any) charge or charges that the individual will face. The police officer is often allowed to issue a ticket for misdemeanor retail fraud under local or municipal ordinances. If there is a successful prosecution for retail fraud, the store is entitled to receive restitution for any merchandise or property that was damaged or not recovered relative to the particular offense. The store will often send a letter to the alleged offender asking for a civil law demand of $200 (two hundred dollars, which is in addition to any restitution) or risk being subjected to a civil lawsuit. In many instances the store will place the person on notice that if he or she returns to the store that he or she will be prosecuted for trespassing.
What the ultimate charge a person faces depends upon a number of factors including: the retail amount of the property involved; the person’s prior record; whether the person worked in concert with other individuals; whether the person was employed by the store in question; the use of violence; the use of a weapon; the removal of a theft detection device. A partial list of potential store related misdemeanor crimes in Michigan include: retail fraud (under a local or municipal ordinance); retail fraud 3rd degree; retail fraud 2nd degree; embezzlement under $200; embezzlement between $200 and $1,000; assault and battery; aggravated assault; removal of a theft detection device. A partial list of potential store related felony offenses in Michigan include: retail fraud 1st degree; organized retail fraud; unarmed robbery; armed robbery; felonious assault; organized retail fraud; embezzlement over $1000.
Once a charge or charges are determined, and if the person is not already placed in jail (if he or she is issued a ticket at the scene and released or released after booking), the person will be given a date to appear at the local district court for arraignment on the ticket itself or on another written notice. If the person is in custody, he or she is brought before the court for arraignment. At arraignment the person is read the charge or charges authorized, the possible penalty, and given an opportunity to tender a plea (guilty, not guilty, or stand mute. If the person stands mute the court enters a not guilty plea). The person accused should either plead not guilty or stand mute, because his or her lawyer is often able to reach a better result through negotiation or trial on behalf of the client.
The court will set a bond amount. The bond amount is determined by the person’s prior record, record in the community, whether or not the person is a flight risk, and whether there is a potential harm to the community. A bond can be a personal bond (in which not money needs to be posted to secure release), a cash bond, a surety bond, a 10% bond (which requires 10% of the total bond to be posted to secure release), or a combination of the above. A person is not able to post a bond to gain release if he or she has a parole detainer or an immigration detainer. If the person has an active arrest warrant from other jurisdiction, usually he or she will be transported to the other jurisdiction if a bond is posted (which could affect the amount of jail credit he or she ultimately receives for time served). The bond can contain conditions such as drug and alcohol testing, reporting to pretrial services, not leaving the State, staying away from the store in question, etc. Having a lawyer present at arraignment can help ensure the Court that the person is not a flight risk, which could lead to a lower bond amount. A person accused of a crime is entitled to a lawyer at public expense if he or she is indigent – however the lawyer is usually provided after the arraignment at the next scheduled court date (the pretrial hearing).
At a pretrial hearing the person accused can either request a trial date, or try to reach a resolution of the case short of trial. A lawyer can sometimes negotiate a favorable plea bargain or sentence bargain to resolve the case. Again, it is important to hire an experienced criminal lawyer immediately upon investigation or arrest for any criminal offense.