In the past, Walmart has described this program as an educational opportunity about the consequences of shoplifting, without the threat of having a criminal charge on your record.
The public saw it very differently, and in an August ruling a California court decided that Corrective Education, the program that Walmart used as an ‘educational opportunity’, violated the state’s extortion laws.
According to The Wall Street Journal, suspected shoplifters at stores using Corrective Education are given 72 hours to decide whether to enter the program after viewing a short video. The decision the suspect faces is between a fee of $400 upfront or $500 at a later date, or as the video states, Walmart can exercise “other legal rights to seek restitution and resolve this crime.”
About 38% of inventory shrink comes from shoplifting and 34.5% is a result of employee theft. In either case, it’s illegal, and retailers are well within their rights to try to prevent shoplifting in their stores.
According to CNBC, the Corrective Education program was in place at about 2,000 Walmart stores around the country. Now, Joe Schrauder, Walmart’s Vice President of asset protection and safety, says that the program is on hold until it can be reviewed.
Corrective Education Co. is actually the name of the company that administers the Turning Point Program, which is also used by major retailers such as Bloomingdale’s and Target. Shoplifting suspects had to pay $400 or more to participate in the program (some of those funds went back to the retailer), or else.
It’s that “or else” that has some legal experts calling the scheme extortion.
Joshua Marquis, the district attorney in Clatsop County Oregon, told The Wall Street Journal, “The justice system should never be a profit system.”
Marquis says that first-time offenders in his district typically receive nothing more than a written citation and some community service, and petty theft is usually a minor misdemeanor crime.
The average plastic bag is only used for 25 minutes, and convicted shoplifters may end up cleaning them off the side of the road if found guilty of petty theft. In California, that will not be a question for the appropriate authorities, not a for-profit ‘correctional program.”
Unfortunately for major retailers like Walmart and Target, the timing of the California decision was not ideal. This time of year the typical stories of elevated shoplifting and crime rates are flooding the news cycle.
However, retailers still have one potent weapon to use against suspected shoplifters — they can still call the police.