Macy’s Shoplifting Penalty Challenged in New York

shoplifting laws

Recently a New York judge mandated in a lawsuit against Macy’s Department Stores that the retailer refrain from detaining and requiring suspected shoplifters to pay a financial penalty. An injunction was granted last week in response to a class action lawsuit, according to court records from the Supreme Court for the State of New York.

Supreme Court Justice Manuel Mendez ruled that Macy’s shoplifting penalty abused a state law that allows retailers to temporarily detain and fine shoplifters. Judge Mendez stated that New York law allows a business to detain suspected shoplifters for the purposes of investigation and questioning, and a related civil recovery statute allows businesses to impose a shoplifting penalty that can fine shoplifters five times of the cost of the merchandise up to $500. However, Mendez suggested Macy’s was pairing the laws unfairly.

The Plaintiffs

The lawsuit that led to the ruling was filed by Cinthia Orellana and later joined by Samya Moftah. The plaintiffs claim they were detained, coerced into signing confessions and forced to pay to be released. They were then turned over to law enforcement for prosecution.

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Cinthia Orellana claims that she was detained at Macy’s Herald Square by store loss prevention and accused of planning to shoplift after she had taken a couple of shirts that she states she was going to buy from one floor to another in July 2015. Her purse was then seized and she was escorted her to a “holding cell” in the store where she was allegedly questioned for three hours. According to the suit, Orellana, a Honduran immigrant with limited English communication skills, was told to sign papers and pay a $100 fee. She was then turned over to the police. The charges were later dropped.

Samya Moftah, an Egyptian-American, went to Macy’s Herald Square to exchange a few shirts for different sizes in July 2015, the suit says. Unable to find the sizes she needed, she said she decided to keep them to give as gifts to family members in Egypt. She picked out five new items and bought them at a checkout counter using a Macy’s credit card. As she was leaving the store, loss prevention accused her of theft and escorted her to an office, according to the filing.

Two employees then brought her to a detention cell in the basement and patted her down, she claimed. “One of the female employees told [the other employee] in a mocking tone to, ‘see what is under that scarf!’ referring to the hijab I was wearing on my head,” Moftah wrote in the filing.

Moftah was also forced to sign documents without reading them, she said. “At this point in time I didn’t know what else to do except to start crying,” she wrote. “This was the middle of Ramadan and I was fasting, and I felt weak, dizzy, overwhelmed.” One employee “taunted” her for being “Muslim and stealing on Ramadan,” she claims.

After five hours in the cell, Moftah said she agreed to hand over the $100 she’d been told she would have to pay, at which point an employee told her she actually owed $500. She paid the $500, at which point police escorted her to a police station, where she was charged with petit larceny and criminal possession of stolen property, the filing shows.

In March, a court dismissed the criminal charges against her, but Moftah has become “depressed and increasingly anxious,” and isolated from friends and family as a result of the incident, according to multiple reports. Moftah’s attorney filed an amended complaint two months later, joining Orellana as the second plaintiff in the suit.

Basis of the Injunction

The class-action lawsuit, filed in November 2015 in Bronx Supreme Court, alleges that thousands of other minority customers have been affected by Macy’s shoplifting penalty in a similar way.

“Macy’s has combined the power it was given under the statutes by using this power as a double-edged sword instead of a shield,” states Judge Mendez regarding Macy’s shoplifting penalty. He reasoned further that there is no language in the statures that allows Macy’s to detain an individual once an internal investigation is complete. The actions the class action alleged were seen as a violation of due process, according to reports.

“The law was never intended to “confer a license to embarrass, humiliate and harm innocent… consumers,” Mendez wrote in his decision granting the injunction.

According to multiple reports a spokesman for Macy’s said the preliminary injunction “relates to in-store civil recovery” and claimed the store discontinued the practice in the fall of 2015. “Given that this is a matter in active litigation, we do not have further comment to make,” he added

The case is ongoing. As recently as June 24, Mendez rejected another motion by the plaintiffs to render the New York civil recovery statutes void due to vagueness, according to reports.

Civil Recovery Laws

Civil recovery laws are intended to minimize the necessity to increase retail prices in response to lost inventory. Acting as a shoplifting penalty based on civil statutes, these laws are intended to help offset the growing financial commitment required by merchants to provide loss prevention personnel and the technologies necessary to safeguard their merchandise against theft, fraud, and related issues.

Civil recovery laws make any person who unlawfully steals or tries to steal merchandise liable to the merchant. In simple language, this means that a shoplifter can face a shoplifting penalty and financially charged by a merchant for stealing or attempting to steal from them — even if the merchandise is recovered. Civil recovery laws do not in any way prohibit a merchant from taking additional legal action against the offender, such as turning them over to a law enforcement agency or seeking prosecution for their crime.

This is an important and often misunderstood aspect of the law. A common misconception amongst the general public is that once a shoplifter is arrested, prosecuted or simply released without action, then the incident has ultimately reached its conclusion. The thought is that since the merchant recovered the merchandise – usually undamaged – then there was no impact to the merchant. However the law is designed to provide a means for merchants to be reimbursed, helping to pay for the loss prevention tools and personnel that are required to guard against these illegal acts.

Another argument is that if an offender is prosecuted in criminal court, then they should not be held civilly responsible for their crime. But, double jeopardy statutes do not apply since the actions of a civil court and a criminal court involve different legal standards.

Each state has different standards and provisions. However, typically, the criterion revolves around the value of the merchandise and the condition in which it is recovered. Is it damaged or is it in salable condition? There are usually minimum and maximum financial penalties that sometimes involve multiplying the retail value of the item by a factor of 2, 3 or more.

With retail theft causing retailers tens of billions of dollars each and every year, these “shoplifting penalties” can provide a valuable asset in helping retail organizations to in some way compensate for the massive losses that result from shoplifting and related criminal activity.

Training and Awareness

While civil recovery laws can provide a valuable tool for the retail community, as with any tool they must be used correctly in order to maximize the effectiveness of the resource. Laws must be appropriately interpreted by company legal teams and properly administered by loss prevention departments. Loss prevention teams must then be appropriately trained on the policies and procedures outlined by the retailer when processing civil recovery incidents.

Finally, there must be greater awareness of the use of civil recovery, accurate and truthful information on the purpose of these laws, a greater understanding of how it is appropriately implemented, and the impact of shoplifting and relatd crimes on the retail industry. Civil recovery is commonly misunderstood and often unfairly criticized in practice, and it is the responsibility of all those that use these laws to ensure that the practice is correctly implemented and accurately depicted.

The New York Lawsuit

Obviously, the New York lawsuit is much more complicated than merely an incident involving the proper use, or misuse, of shoplifting penalties and civil recovery laws. With discrimination overtones and the added factor of alleged detainment issues, there are clearly deeper concerns and a plethora of complexities associated with this case. As the details of the case unfold and information is presented by all parties, an appropriate judgment will likely be reached.

But simply stated, every retail employee — especially those in loss prevention — must be increasingly aware of the consequences of their actions. Poor decisions aren’t exclusive to those involved with shoplifting at a local retail store. Whether performing our responsibilities or using the tools and technology associated with the job, it is a moral imperative as well as a business necessity that all of those associated with the retail community must be armed with accurate information, ethical courage, sound judgment, and common sense.