How litigation shapes retailers' security and loss prevention strategies

March 19, 2010
Retail security consultant Curtis Baillie on litigation and the loss prevention industry

The loss prevention industry is trending towards what is called a "no touch" policy. This is largely due, in part, to the costs retailers face when defending lawsuits filed by persons who are stopped by their security staff and excessive use of force to detain the shoplifter is claimed. The "no touch" policy restricts Loss Prevention Agents from apprehending shoplifters who fight and try to escape custody. The retailers employing such a policy would prefer the shoplifter escape - thus reducing excessive use of force claims along with reduced exposure of injury to their employees and customers.

Companies that require their trained security staff to apprehend shoplifters, but implement a "no touch" policy are, in my view, counter-productive, in that "word on the street" quickly spreads and the retailer becomes even more of a target for thieves as word spreads.

Every retailer that expects their employees to stop and/or apprehend shoplifters should take note of what Charles Sennewald, CPP, CSC and John Christman, CPP wrote: "The best way to avoid a lawsuit is to keep it from being filed; the best way to encourage a lawsuit is to pretend no wrong occurred and/or try to cover it up." ("Shoplifting - Managing the Problem," ASIS 2006).

No truer words were ever written in the world of retail security litigation avoidance. If only retailers would follow that advice. Although some attorneys advise their retail clients not to apologize for suspected wrongdoing on their part, I have found that if a retailer makes what is known as an "unproductive" stop, potential litigation could have been avoided if the retailer had just apologized for the error. It does not get much simpler than that, especially when industry figures indicate that the cost of successfully defending a lawsuit can be $50,000 or more and settlements or jury awards skyrocket from there.

When Shoplift Apprehensions Go Badly

A lawsuit is the Plaintiff's complaint against the retailer. The complaint contains the facts (as claimed by the Plaintiff) and alleges such egregious acts as negligent hiring, training, supervision, retention and other acts. These claims open the retailer's records for a thorough inspection. Failure to properly hire, train, supervise and retain employees with a record of violations of a company's loss prevention policies often leads to increased awards by the court. In more severe cases where injuries occur, juries may award punitive damages. Punitive damages are just what are implied. Such damages are designed to penalize companies for aggravated acts and normally are not covered by insurance companies.

In one such case against a major retailer that resulted in a $3.8 million award, the appellate court stated in its ruling: "The evidence of negligent hiring included proof (store name) hired Doe based on a partially completed application that failed to list any references as requested, and gave only two years of employment instead of the ten requested, and failed to provide complete addresses for past residences. (Store name) also failed to investigate Doe's prior experience, from which it would have discovered that he was fired from several jobs and kicked out of high school in the 11th grade. Based on Doe's troubled work history, several store witnesses - including local, regional and national loss control managers - gave testimony suggesting that (store name) should not have hired him. The Security Expert Witness, hired by the Plaintiff's attorney, also testified that hiring Doe was 'dangerous' because it put 'an unknown quantity' in a position where he was going to be detaining and arresting people. Thus, the Security Expert opined that by hiring Doe the store did not meet the industry standard of care."

Merchant's Privilege

Most states, if not all, have enacted what is commonly called a Merchant's Privilege statute. The statutes were enacted to grant merchants and their employees (or their agents) the right to detain suspected shoplifters and grant them protection from lawsuits, provided the merchant has followed the requirements. The language is different in every state, but it generally requires that the detention be based on probable cause that the person detained committed a theft; the detention was for investigative purposes; the detention was for a reasonable amount of time; and the detention was done in a reasonable manner.

The issue is that the various Merchant Privilege statutes fail to spell out what is probable cause, just how far the merchant can go in investigating, what is a reasonable time and what is a reasonable manner. This is for the individual courts to decide when a Plaintiff files a lawsuit claiming the merchant failed to follow the tenets of the Merchants Privilege statute.

Although not all-encompassing, here is a list of points retailers should consider regarding litigation avoidance:
- Never make a "bad" or questionable stop.
- Never make a false arrest.
- Never injure a customer.
- Never assault a customer.
- Never improperly search a customer.
- Never fail to investigate a suspect's claim of innocence.
- Never fail to document.
- Never fail to admit errors in dealing with shoplifters.
- Never fail to apologize when in the wrong.

This may sound like a long list of things not to do, but I have seen all of these points appear in security-related civil litigation cases against retailers.

These words bear repeating: "The best way to avoid a lawsuit is to keep it from being filed; the best way to encourage a lawsuit is to pretend no wrong occurred and/or try to cover it up."
Curtis Baillie, CSC, is president of Security Consulting Strategies LLC. He is a member of the International Association of Security Consultants (IAPSC) and a frequent contributor to