US stores have free rein to recoup theft losses

People accused of shoplifting at Macy's huge flagship store in New York City are escorted by security guards to cells in 'Room 140', 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 of the December 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."

UP TO FIVE TIMES MORE MONEY

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 longstanding 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 immortalised in the movie 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 again investigating 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.

The racial profiling allegations started in New York this fall with a different retailer, Barneys New York, after two black customers said they were stopped while buying expensive merchandise. The retailer has said it does not profile, and neither customer was asked to sign a confession or pay a fine.

But the allegations grew to include Macy's. Among those complaining was Rob Brown of the HBO show Treme, who said he was stopped after buying a US$1,300 Movado watch for his mother this summer.

Brown, 29, said he too was taken to Room 140. There, he said in a federal suit filed by attorney Doug Wigdor, others being held were all "individuals of colour". He was released, he said, when people realised he was a celebrity.

Elina Kazan, a spokeswoman for Cincinnati-based Macy's, said she couldn't comment on pending litigation.

Usar's client, Ayla Gursoy, was detained in 2010 after she carried two coats in her arms up several flights of stairs in the flagship store, according to her suit. Store security accused Gursoy, who speaks little English, of trying to steal. She was asked to sign a form admitting guilt and pay a fine. She refused, the police were called and she was arrested.

Gursoy and others say they were held for hours in Room 140, a bare room with two small, barred holding cells with wooden benches within the store.

Kazan said the company's practices prohibit coercion when recovering fines.

"Our policy of exercising our right to pursue a civil recovery payment is consistent with common practice in the retail industry and within the parameters of the law," she said.

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, Florida. That firm also represents Home Depot, Wal-Mart and many other stores, and sends out about 115,000 letters per month.

- AP