Wal-Mart acts to stem rising shoplifting

Wal-Mart is recommending its stores prosecute shoplifters at a younger age, tightening guidelines for store managers as it fights rising theft, which has eroded its profit.

Wal-Mart Stores Inc. said Wednesday that it issued new guidelines to its U.S. stores this week lowering the age at which it recommends they prosecute first-time shoplifters to 16 from 18.

The change comes two months after Bentonville, Ark.-based Wal-Mart said an increase in shoplifting, employee theft and other inventory loss was among factors hurting profitability in the first quarter.

A year earlier, Wal-Mart relaxed its policy by recommending stores prosecute first-time offenders only when the items stolen are worth $25 or more, a guideline that remains in force.

Wal-Mart spokesman John Simley said the latest guidelines were not a response to the company’s May statement of concern about theft. Instead, he said, they were the result of suggestions from stores around the country going back to the start of the year. “The fact is, [the anti-theft policy] is always evolving; it’s always moving,” Simley said.

Simley said prosecuting at the age of 16 was in line with most other retailers.

Joseph LaRocca, vice president of loss prevention at the National Retail Federation, said most retailers held teenagers accountable for shoplifting, whether by calling parents or police.

Specific rules vary among stores, LaRocca said, but most retailers consider 16-year-olds mature enough to face consequences for their actions.

Wal-Mart’s policy change applies to first-time shoplifters. The guidelines are a suggestion and store managers have leeway to prosecute anyone accused of theft, Simley said.

The new policy shortens the time a store will wait for parents before calling police on a child suspected of shoplifting. The wait time is now one hour, compared with 90 minutes under previous rules.

Wal-Mart also will prosecute repeat offenders regardless of age, Simley said.

Eduardo Castro-Wright, president and CEO of Wal-Mart’s U.S. store division, cited theft in a mid-May conference call with analysts. He said first-quarter gross margins were dragged down by problems, including higher “shrinkage,” or losses from shoplifting, employee theft, paperwork errors and supplier fraud.

Wal-Mart has declined to detail the theft problem or how much it has grown. Simley said the company still had a lower overall loss rate to theft than the industry average.

Theft cost retailers $41.6 billion last year, according to an annual survey by the National Retail Federation and the University of Florida. They found the theft rate as a percentage of sales ticked up to 1.61% of sales in 2006 from 1.6% in 2005.