Almost all states have statutes that protect retailers by providing a civil remedy that allows for the recovery of actual damages arising from incidents of theft. Actual damages are in addition to any civil statutory (penalty) damages the retailer may be entitled to and generally include restitution. In a previous article from our Firm, it was explained that even if merchandise is recovered in merchantable condition, there are actual damages. Likewise, and even less likely to be contested, when the retailer is not able to recover the merchandise or the assets taken by the theft offender, the retailer suffers actual damages. When a retailer suffers actual damages, the retailer has a right to request reimbursement for actual losses sustained in addition to any available civil statutory (penalty) damages.
Generally, when a theft offender is apprehended, it is beneficial for the retailer to obtain a verbal and written admission from the theft offender. If the theft offender is an employee, it is advisable to also get a signed promissory note for any restitution amounts owed. It is also helpful to notify the theft offender of the retailer’s intention to request civil statutory (penalty) damages and/or restitution from the theft offender whether through an in house process or through a civil recovery law firm. If a promissory note is freely and voluntarily signed by the theft offender, a request for restitution and/or, if available and mentioned as an exception to the promissory note, civil statutory (penalty) damages can then be made by the retailer.
Is a promissory note required? No, but it can be useful in strengthening the retailer’s civil restitution claim. The purpose of a promissory note is to contractually bind the theft offender to his or her promise to pay the retailer back for any actual losses the retailer sustained. A promissory note is an unconditional written promise, signed by the theft offender, to pay a sum of money to the retailer. If a promissory note is well drafted and the promissory note is breached, a retailer could be entitled to pursue the agreed upon amount listed in the promissory note, any statutorily prescribed interest rates, court costs, attorneys’ fees and any other amounts allowable by law.
If the police are contacted and the theft offender is prosecuted, a theft offender may generally choose to remain in compliance with the terms listed in the promissory note by making payments to the retailer’s civil recovery company during the criminal case process. The amount of restitution paid to the retailer’s civil recovery company during the criminal case process should be treated as a set-off to reduce the restitution amount ordered in the criminal court matter. If the criminal court orders an amount lower than the promissory note amount, a retailer may elect to continue to pursue the remaining balance of the promissory note.
If the theft offender is not criminally prosecuted, a retailer may elect to request any restitution and/or civil statutory (penalty) damages it may be entitled to. Should the theft offender refuse to make payment after demand has been made, a retailer may elect to pursue civil litigation.
While having a promissory note may be beneficial, it is important to note that while clearly distinct from the criminal prosecution of the theft offender for the wrongful act(s), some jurisdictions have prosecution policies that seem to blur the civil/criminal distinction. For this reason, it is important for the retailer to find out the local policy in the jurisdiction where the store is located. While the majority of states and jurisdictions follow the statutes and supporting case law that specifically allow for a civil matter to be pursued regardless of whether or not there is a criminal matter, it is important to check with your local courts to ensure that the local judge and/or prosecutor agrees with this position. If successful pursuit of criminal charges takes precedence over the enforcement of a promissory note, the retailer may elect to forego a promissory note and instead choose to obtain a written admission statement from the theft offender. If the retailer elects to forego the promissory note because of a local prosecution policy that discourages same, the retailer should determine whether a statement expressing the theft offender’s willingness to repay the admitted theft amount could hamper a prosecution. Generally, absent any unusual prosecution policy, having the theft offender indicate a willingness to repay is helpful. The retailer should keep well-documented evidence of such losses in the event that the retailer elects to pursue a civil restitution claim for any difference in restitution that is not ordered in the criminal matter.
When a person is apprehended for shoplifting in a store, the retailer may suffer actual damages in addition to civil statutory (penalty) damages. When a theft incident takes place, it is important for the retailer to have procedures in place that will help strengthen the retailer’s chances of recovering the damages it may have sustained. In many instances, the signing of a promissory note by an internal theft offender can help to strengthen the retailer’s position and improve the chances of recovering money owed by the theft offender to the retailer.
 See Black’s Law Dictionary 492 (3rd pocket ed. 2006)