Home Depot, Lord & Taylor, Walmart Hire Law Firms To Harass, Bully Alleged Shoplifters

The Wall Street Journal has an interesting article about retailers who hire law firms to engage in something called “civil recovery,” in which alleged shoplifters are harassed into paying thousands of dollars… even if the case against them has been dropped, or the retailer never intended to sue at all.

From the WSJ:

After Miami handyman Glenn Rudge was accused of shoplifting an $8 set of drill bits at Home Depot, he thought he’d settled the matter when he showed his receipt to prosecutors and they dropped the charge.

But a few weeks later, a law firm hired by Home Depot began sending him letters demanding first $3,000, then a total of $6,000, implying he’d be sued if he didn’t pay it.

In an escalating battle against theft, retailers are going after anyone suspected of shoplifting, turning over their names to lawyers and collection firms, who pursue the suspects for stiff penalties and split the take with the retailer.”

The WSJ says this process is a result of laws passed in all 50 states that were intended to help retailers cover the cost of securing their stores, but the way the laws were written has resulted in some strange behavior by retailers.

Lord & Taylor, for instance, never follows up civil-demand letters by suing suspected shoplifters, its loss-prevention manager said in deposition about a year ago, citing the cost of going to court. Lord & Taylor collected about $1 million in civil recovery from suspected shoplifters in a recent year, up from $850,000 the year before, the official testified.
The chain’s letters to suspected shoplifters are sent out by a Florida law firm called Palmer Reifler & Associates, which also handles the task for four dozen other clients, from Wal-Mart Stores Inc. to Walgreen Co., keeping 13% to 30% of what it collects. A partner at the law firm has said that it sends out about 1.2 million civil-recovery demand letters a year but follows up by suing fewer than 10 times a year.

Creepy. In the Home Depot case, the handyman purchased the drill bits on a previous trip to the store, and had them peeking out of his shirt pocket. A security guard spotted them and pulled him aside.

After he kept insisting he was innocent, the guard handcuffed him, walked him to an interrogation room in back and took the drill bits. Mr. Rudge asked to call home to have his wife bring in the receipt but the store wouldn’t let him, he said in a 2003 suit in Miami-Dade County Circuit Court, since settled. Home Depot declined to discuss specifics of his account.

Prosecutors charged the handyman with shoplifting, then dropped the charge in February 2003 when he showed them a receipt for the drill bits. But about a month later, according to his suit, he got a letter from the Palmer Reifler law firm demanding he pay a little over $3,000 within 20 days.

He ignored the demand. Then he got a letter demanding an additional $3,000, as “pre-litigation” attorney’s fees, for a total of just over $6,000. If he didn’t pay, one letter said, the sheriff’s office would be called to notify him if a lawsuit was filed.

Mr. Rudge was doing some handyman work for a lawyer and showed her the letters. “I took one look and said, ‘This is outrageous,’ ” says the lawyer, Alison Harke. “These letters are designed to make people settle because they believe they are going to jail.” She filed a suit against the retailer, the settlement of which is confidential.

We hope Barnes & Noble and Borders don’t do this. We’re always walking around with a book in our bag and when we find ourselves in book stores we start getting paranoid that the booksellers may have x-ray vision and a cynical outlook.

Big Retail Chains Dun Mere Suspects in Theft [Wall Street Journal](Thanks, Joseph !)

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