Excuse Me, Did You Pay for That?

As she was putting up a “Going Out of Business” sign, I had a chat with the manager of a national chain store that was moving out of Chestnut Hill.

It wasn’t the first store to pull up stakes in the Philadelphia neighborhood.

But this store always seemed to be crowded and I couldn’t understand why the corporate office was giving up on what seemed to be a profitable location.

“Shoplifting,” the manager told me, “It’s out of control.” When I asked her why they don’t crack down on it she said something that shocked me. “It is against corporate policy to prosecute shoplifters because the legal costs are higher than the merchandise stolen.” She explained that savvy shoplifters know the policy and her store had been overwhelmed by what amounted to condoned looting. “We would watch people walk out of the store with stuff and even say, ‘Do you want to pay for that?’ and they would just keep walking out the door. It was frustrating.” [SIGNUP]

If you think it is frustrating for the local manager of a chain, think about how tough it is on a small business owner who can’t absorb those costs.
When I lived in Chicago I used to go to a successful privately owned pharmacy. A great location in the lobby of a famous building made it possible for the owner to compete with Walgreens and CVS. The owner told me once that the greatest drain on his business was shoplifting. “It is just not worth it to prosecute,” he told me. “If I did, I would go out of business.” The owner also told me that shoplifting is not based on the economy or is an affliction of the poor. “Businessmen, rich widows and even other small business owners” all shoplift, according to my pharmacy friend. “They usually pay for what is in their hands and put a little something extra in their pocket; as if the act of paying justifies the theft.”

And so he came up with a way of combating shoplifting without having to pay exorbitant legal fees. It was foolproof, or so he thought. The owner hired an undercover security guard to pose as just another customer. When the security guard caught you, the owner would agree not to call police if you allowed him to take your picture, which he did with a Polaroid camera in the back of the store. He kept the picture private unless the shoplifter got caught a second time. Then he displayed the picture in the store.

It was a system that worked. The cost of the private eye and the camera were a small percentage of the money that was walking out of the pharmacy every week. He did the same thing with bounced checks. They were also displayed in his store for all to see.

Public embarrassment was a strong deterrent.

It was until someone sued him and won. It turned out the legal costs of fighting shoplifting were still too high. The owner had to sell his store to a chain that could absorb the cost of the stolen goods and the shoplifters won again.

Shoplifting is estimated to cost businesses $16 billion a year or more than $40 million a day Overtaxed and overregulated, it is no wonder that so many stores are closing up and cashing out. One in three new businesses are forced to close because of shoplifting.

It is why we need to come up with a solution.

Our criminal court system and prisons are maxed out, which is why I am suggesting a special “Shoplifters Court” where a store owner can bring his cases at a reduced legal fee. The judge will hear both sides and watch surveillance video; and when found guilty, the shoplifters will participate in public works projects, like cleaning up parks and removing graffiti. Most importantly, the names of those found guilty would be in the newspapers.

Shoplifting is not just a crime against stores and small business owners, it is a crime against us all, as the cost of the lost merchandise and the rare prosecutions are passed on to us in higher prices. In other words, we pay more for an item so others can have it for free.

It is unfair system born of frustrating necessity and it is time for it to end. Philadelphia should become the first city in the nation to enact a “Shoplifter’s Court” and help small businesses combat what has become their biggest obstacle for success. It might just help attract new businesses to open here in this difficult economic environment.

LARRY MENDTE writes for The Philly Post every Monday and Thursday. See his video commentaries at wpix.com.