Judge queries Warehouse's letter to shoplifter

A judge has questioned whether retail giant the Warehouse has the right to recover $150 from a shoplifter who stole a $19.99 item from the company's Whangarei store.

Judge John McDonald queried the store's actions last week after a man pleaded guilty in Whangarei District Court to stealing a packet of miniature skateboards worth $19.99 from the Whangarei megastore.

The thief told the judge he had already been hit with a letter, written on behalf of the Warehouse, seeking $150 from him for the theft. Security company Theftec was seeking the money on behalf of the Warehouse for "damages, costs and expenses incurred" as a result of the theft, the letter said.

The letter was sent to the man before he was convicted of an offence. After reading the letter Judge McDonald said: "I don't know if they can charge you for that. I wouldn't pay it until I got some free legal advice about it."

The man was convicted of theft and fined $250 plus $130 court costs and ordered to pay $19.99 reparation to the Warehouse.

Consumers Institute chief executive David Russell said the Warehouse was entitled to bring a civil action against the shoplifter, independent of the criminal action, but said they may be breaching the Fair Trading Act by sending the letter before he was convicted.

"They are jumping the gun. They are pre-judging the case and making the assumption he will be convicted," Mr Russell said.

The courts took a "dim view" of private companies trying to impose their own penalties "because $150 could have an element of nice little profit margin in there as well", Mr Russell said.

Warehouse spokeswoman Cynthia Church said the civil recovery was independent of any criminal proceedings.

Civil cases could be brought against someone when there was a "balance of probability".

"This is not an effort in profit-making. This is an effort to recover costs ... beyond what the person has stolen," Ms Church said.

The letters were sent regardless of whether or not the person was convicted in a criminal court of law.

"Theftec, as our agent, sends a letter to the individual to seek recovery of costs related to damages, loss and expenses incurred as a result of the theft.

"The amount is a nominal amount of $150 regardless of the value of the stolen goods," Ms Church said.

The Warehouse incurred costs related to shop theft amounting to millions of dollars every year.

"Less than 1 per cent of our costs are recovered through this $150 charge, which is meant to act as a deterrent as well to emphasise that theft will not be tolerated."

Cost recovery was "standard business practice across the retail industry", she said.

The letter to the Whangarei shoplifter said that if the $150 payment was not received The Warehouse Whangarei would seek to recover its losses in the district court through a civil claim.

Philip Morgan, QC, convener of the New Zealand Law Society's criminal law committee, said: "The real issue is whether the Warehouse can prove they suffered those losses and I think that is very difficult."

- NORTHERN ADVOCATE (WHANGAREI)