Wal-Mart has recently changed their policies regarding shop-lifting, bringing them closer in line to other major American retail chains. Rather than a zero-tolerance approach, they no longer prosecute first-time shoplifters younger than 18 or older than 65 unless the goods stolen were worth more than $25 dollars.
Freakonomics writes:
For the store, the opportunity cost had come to severely outweigh the shoplifting cost. “J.P. Suarez, who is in charge of asset protection at Wal-Mart, said it was no longer efficient to prosecute petty shoplifters,” Michael Barbaro wrote in the Times. “’If I have somebody being paid $12 an hour processing a $5 theft, I have just lost money,’ he said. ‘I have also lost the time to catch somebody stealing $100 or an organized group stealing $3,000.’”
But, although the article doesn’t quite say so, I am guessing it was the pressure from police departments that truly forced Wal-Mart’s hand. The Times quotes Don Zofchak, police chief in South Strabane Township, Pa., as saying that Wal-Mart “would arrest somebody for stealing a pair of socks. I felt we were spending an inordinate amount of time just dealing with Wal-Mart.”
It wouldn’t surprise me if police in many small cities and rural areas had stopped responding to Wal-Mart’s daily requests to pick up their shoplifters, or at least grumbled mightily about having to do so. Wal-Mart has taken lots of heat for lots of reasons over the years—including, for instance, the fact that many of its low-wage employees also receive public assistance, which has led some critics to say that the U.S. Government in effect subsidizes Wal-Mart’s business. I can imagine how its old shoplifting policy may have led to even more damaging criticism—that Wal-Mart has turned local police forces into Wal-Mart police forces, preventing them from doing their real jobs.
The lesson from this is that there are trade-offs in all things. It doesn't make sense for Wal-Mart to potentially pay hundreds of dollars to prosecute the theft of a $5 or $10 item, not even when you consider the deterrent effect. And it certainly doesn't make sense for society to allow Wal-Mart's wants and needs to be given priority over the law-enforcement needs of the rest of society.
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