To fight crime in stores and reduce reliance on local law enforcement, Wal-Mart is experimenting with a new program called “Restorative Justice,” Time Magazine reports.
The measure offers some accused shoplifters the option to pay an undisclosed sum to complete an online remedial program, thereby avoiding jail time.
With the initiative, Wal-Mart aims to reduce the number of police coming to its stores and "hopefully [give] people a second chance."
Many Wal-Mart stores nationwide are vulnerable to crime — mostly shoplifting and employee theft. Places from Kentucky to South Carolina and Florida regularly cite a disproportionately high number of 911 calls that originate from local Wal-Mart stores.
Now Wal-Mart is stepping in, aiming to reduce police presence in its stores with a new remedial program. While there are also violent altercations and other incidents that will require the help of law enforcement, Wal-Mart hopes its new program can deal with low-level incidents without needing to call the police.
Last year, Wal-Mart Stores Inc. pinpointed “shrink,” largely due to theft, as a priority item to protect margins; Bloomberg estimates the problem costs Wal-Mart a whopping $7 billion each year.
Retail shrinkage of all types accounts for 1.4% of sales on average, according to a 2014 NRF survey. More than one-third is due to old-fashioned shoplifting and almost that much comes as a result of theft by employees. The rest is made up of damaged goods, checkout errors, and other miscellaneous mistakes in inventory.
Wal-Mart is especially vulnerable because of its large stores, long hours, and its penchant for low staffing and wages, experts told Time. Compared to other rivals like Costco, which tend to lose less than a penny per dollar in sales to shrink, Wal-Mart loses about 2 cents for each dollar to shoplifting.
Experts say the best way to combat the problem is well-trained and well-paid people. Wal-Mart is addressing the problem in part by boosting wages and training of its employees. The retail giant has also reinstated door-greeters at many stores — partly to deter theft.
But Wal-Mart's tapping of third-party vendors to provide remedial education shows promise, according to some experts — but is also highly controversial. Such vendors charge alleged offenders for the remedial programs and have come under scrutiny for their tactics. One company used by Wal-Mart, Corrective Education Company (CEC), faces claims from the San Francisco City Attorney of overcharging and falsely imprisoning people accused of shoplifting.
Wal-Mart spokesman Brian Nick declined to comment on the lawsuit to Time, also saying he does not know how much alleged offenders are charged by CEC. “[The program] is 100% voluntary in terms of participation, and I do know that financial aid can be available,” he said.