The Business Ethics Blog

I never thought I’d see an ethically-interesting story about shoplifting. For those of us who study ethics, stealing stuff is not exactly a subtle moral issue.

A story in today’s NY Times, “Some Leeway for the Small Shoplifter”, changes that.

Wal-Mart refuses to carry smutty magazines. It will not sell compact discs with obscene lyrics. And when it catches customers shoplifting — even a pair of socks or a pack of cigarettes — it prosecutes them.
But now, in a rare display of limited permissiveness, Wal-Mart is letting thieves off the hook — at least in cases involving $25 or less.
According to internal documents, the company, the nation’s largest retailer and leading destination for shoplifting, will no longer prosecute first-time thieves unless they are between 18 and 65 and steal merchandise worth at least $25, putting the chain in line with the policies of many other retailers.

The reason for Wal-Mart’s change of policy? The article cites two:
1) It’s not economically feasible to enforce zero-tolerance. According to one Wal-Mart exec quoted in the story: “If I have somebody being paid $12 an hour processing a $5 theft, I have just lost money….I have also lost the time to catch somebody stealing $100 or an organized group stealing $3,000.”
2) The zero-tolerance policy was putting a strain on some police departments, whose officers would need to be called in everytime some kid got caught swiping a pack of gum. “At some of the chain’s giant 24-hour stores, the police make up to six arrests a day…”

A few thoughts about the ethical dimensions of this story, in no particular order:

• Both of the reasons offered above serve to remind us that, from an economic point of view, there is pretty much always going to be some non-zero efficient level of crime, whether in a given store or in society more generally. That is, from a financial point of view, it’s almost never worth it to put in place sufficient enforcement mechanisms to drive the crime rate to zero.
• The change in policy is apparently based purely on localized economic factors. So it leaves aside questions like whether theft is a moral wrong that ought, morally, to be punished. Some would argue that retailers have an obligation to do their part in punishing wrong-doing, independent of whether doing so is strictly efficient.
• Some will see the amount of law-enforcement effort expended on arresting shoplifters at Wal-Mart as a “further” way in which Wal-Mart is subsidized by public coffers. In a sense, that’s true. But it’s only true in the same sense that your own security costs (and mine) are subsidized by public coffers. The fact that the city I live in has an effective police force is part of the reason I don’t need a full-time security guard at my home. The more interesting question, regarding Wal-Mart, is whether there’s something about Wal-Mart that makes it a disproportionate drain on law-enforcement budgets. That is, does your average Wal-Mart use up more law-enforcement resources than other stores its size, or than however many smaller stores you’d have to add up to equal its size? Is anything about Wal-Mart especially criminogenic?

(Note: See also the interesting blog entry on this over at the Freakonomics blog.)

Relevant Books:
Shoplifting: A Social History, by Kerry Segrave
The Sociology of Shoplifting: Boosters and Snitches Today, by Lloyd Klemke
Retail Security: 150 Things You Should Know, by Louis A. Tyska, Lawrence J. Fennelly