A high school guidance counselor says she was only looking for a working escalator when she stepped outside of a Macy’s in Queens Center last July while holding a suitcase she intended to buy. Chris Glorioso reports.
A high school guidance counselor says she was only looking for a working escalator when she stepped outside of a Macy's in Queens Center last July while holding a suitcase she intended to buy.
Immediately, she was stopped by store security and accused of shoplifting, she said.
Prosecutors later dropped all charges against the woman. But on the day of the arrest, the woman -- who did not want her name used -- says she was held behind bars in a small cell in the store’s back corridor while a security agent questioned her, going through her purse to look for other stolen goods and identification.
Before store personnel released her to the police, she said they demanded a $500 “civil settlement” – a charge she was made to pay at store register.
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“If they say you must pay this as a fine, you have to pay,” said the woman, a Macy’s card holder for more than 30 years. “I was afraid to say no.”
A Macy's spokeswoman said pursuing a civil settlement was both common and legal. And although the criminal charges against the woman were dropped, the store says it had “reasonable grounds to detain and question” her.
But the woman’s lawyer, Lance Fletcher of Manhattan, said it’s wrong that retailers can demand payment and at times hold people in custody who have not yet been charged with any crime.
Suspected shoplifters are not afforded the same rights by a store that they would be in the criminal justice system, he said. In the guidance counselor’s case, Fletcher believes Macy’s should return the $500.
The technique “frightens people into paying whatever they have to pay to make the whole thing go away, even if they didn’t do it,” Fletcher said.
Under New York state law, if retailers suspect a person of shoplifting, they have the right to demand that the shopper pay up to five times the value of the stolen item up to a maximum of $500. Some stores demand that money on the spot before the police are ever involved. Others send letters to accused shoplifters later, threatening a lawsuit if they don’t pay up.
Fletcher said when possible, he advises his clients not to pay civil settlements. He has never heard of a store filing a lawsuit to get that money, probably because the legal action would cost more than any money they would recover.
Florida law firm Palmer, Reifler & Associates has sent out more than a million collection letters a year on behalf of big stores like Home Depot, Wal-Mart, and JCPenney.
A recent lawsuit called the firm a"letter mill" that "intimidates consumers" into paying an "arbitrary sum" of money when retailers have no intention of actually suing them. Palmer Reifler did not respond to the I-Team's request for comment.
Those cash demand letters have been upheld in court as a legitimate way to recover the 1 to 2 percent of sales retailers lose each year to theft.
Retailers say loss prevention – from demands for civil payments to detaining suspects behind bars – is necessary to offset the money lost to theft, which routinely adds up to more than $30 billion a year nationally, according to reports by the National Retail Federation.
Dan Reynolds, a vice president at Checkpoint Systems, a firm that helps big retailers battle shoplifting, said the tactics protect both stores and consumers, who end up indirectly bearing the cost of stolen goods.
To date, courts have found that detaining suspected shoplifters and demanding civil settlements is legal.
Still, Assemblyman Jeffrey Dinowitz, who chairs the New York State Assembly Consumer Affairs Committee, said charging a customer a fine while he or she is being held captive goes too far.
“No one should have to pay money on the spot because a store has taken them into custody,” he said.
