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It's Debt Collection, Not Extortion

True crime buffs who have been following

our tale

of the Dangerous Duo who ripped off a Forever 21 store will be glad to see another installment: Hair Balls spoke to Nat Reifler, a partner in the Florida firm of Palmer Reifler, which recovers money for big retailers like Wal-Mart and Walgreen’s, in addition to Forever 21.

First, Reifler told us the firm initially demanded $500 each from the families; the amount increased only after the letters were allegedly ignored. However, Reifler said he was revisiting the issue to see if $1,500 is a reasonable demand for the theft of merchandise totaling $25-$50.

Reifler also says the civil recovery process is in the best interest of not only the retailer, but for consumers.

Says Reifler: “During a tough economy when [retailers are] trying to watch their bottom line…as the margins come down further and further, this is one way for them to help recover some of the money [from] the people that are committing the act of theft, as opposed to the honest consumer that’s out shopping. So in one sense, it helps keep retail prices down.” (Apparently, civil recovery’s effectiveness in this respect is shown by the complete absence of overpriced tchotskes at the mall – they simply don’t exist).

He says retailers often operate under such thin profit margins that “If an item costs $5 and it’s stolen, they may have to sell 100 or 200 more dollars that day just to cover for that specific cost.”

Civil recovery also makes a good deterrent, according to Reifler, who says, “If everyone was allowed to try to take something and all they had to do was give back the merchandise, then it would not send a good signal.”

However, John Ventura, director of the Texas Consumer Complaint Center at the University of Houston Law Center, questions civil recovery’s effectiveness as a deterrent. He asks if retailers are posting notices in their stores, alerting potential shoplifters to the possibility of civil recovery.

Ventura also says, “for a long time, I think that [retailers] just considered it part of the cost of doing business. And the way that they compensated themselves for it, is that they allowed in the pricing of their merchandise…to pass the cost on to consumers as a whole.” (Pretty cynical, if you ask us. $20 for a CD is a totally reasonable price – do you know how expensive CDs are to make?!)

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But one thing Reifler wants people to know: civil recovery is not extortion.

“Making a request for civil damages based in statutes in exchange for a person not being sued civilly is not extortion,” he says. “Some people may not like it or may feel it’s unfair, but extortion typically would involve the threat of criminal prosecution in exchange for a civil payment, or the threat of bodily injury in exchange for a request for civil payment.”

So just to clarify: demanding money from someone who has not been charged with a crime and who has not incurred a debt, in exchange for not being sued, is absolutely, positively, supercalifradulously not extortion. Capisce?

-- Craig Malisow

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