Let’s Make a Deal

A startup helps stores like Bloomingdale’s and Whole Foods give suspected shoplifters a choice: Pay $320, or we’ll call the cops.

H&M, New York City.
An H&M, one of the chains that has stores offering the deal. (The people pictured are not shoplifters.)

Photo by Joe Kohen/Getty Images for Teen Vogue

Imagine you’re browsing at Bloomingdale’s when a security guard taps you on the shoulder and accuses you of shoplifting. He takes you to a private room, sits you down, and runs your name through a database to see if you have any outstanding warrants. Then he tells you that you have two options. The first involves him calling the police, who might arrest you and take you to jail. The second allows you to walk out of the store immediately, no questions asked—right after you sign an admission of guilt and agree to pay $320 to take an online course designed to make you never want to steal again.

Which would you choose?

Over the past four years, about 20,000 people around the country have faced versions of this dilemma and chosen to pay up instead of taking their chances with the criminal justice system. Collecting their money and administering the course is a Utah-based outfit called Corrective Education Company (CEC), which was started by a pair of Harvard Business School graduates in 2010.

According to Darrell Huntsman, CEC’s co-founder and CEO, the company serves four purposes: It saves retailers time that they would have to spend dealing with the police; it frees up law enforcement resources that could be spent on higher priority cases; it reduces the likelihood that a shoplifter will come back to the store to steal again; and it gives second chances to offenders who would otherwise be saddled with a criminal record for life.

CEC operates in most major American cities, said Huntsman, including Chicago, New York, San Francisco, Boston, Dallas, Houston, San Diego, Los Angeles, Miami, and Atlanta. They work with approximately 20 different retailers, including grocery stores, big-box discount stores, clothing stores, and pharmacies. According to the company’s VP for account management, E.J. Caffaro, retail chains that have used the company’s services include Bloomingdale’s, Burlington Coat Factory, and the shoe store DSW; CEC also contracts with third-party security firms that provide loss prevention services in regional branches of Whole Foods and H&M. Retailers can collect a cut of CEC’s $320 fee each time they present an offender with the option of signing up for the program—a form of restitution, said Caffaro, which usually ends up being around $40 per case. CEC doesn’t charge retailers for their services, which the company refers to on its website as being “completely offender funded.”

(I reached out to all of the stores mentioned in this piece. Representatives for H&M, DSW, Whole Foods, and Bloomingdale’s declined to answer questions. The loss prevention department at Burlington Coat Factory did not respond to an interview request.)

Offenders who are eligible for the CEC course (meaning they have been deemed sufficiently low-risk, based on their criminal history, by the store security guard who apprehended them) are given a card with CEC’s phone number on it, and instructed to call it within 48 hours to begin the process. Usually though, a “life coach” from CEC will call the individual immediately—“while they’re walking out to their car or driving home,” said Caffaro—to tell them about the course and make a payment plan.

The company accepts credit cards, e-checks, and money orders, and while they offer a “scholarship” program for people below the poverty line, Caffaro said that about 85 percent of offenders pay the full fee, and less than 2 percent qualify for a free ride.

I ran CEC’s business model by four attorneys at public defense organizations. None of them had ever heard of a company quite like it, and all of them were pretty appalled.

“There’s no judicial oversight, there are no constitutional protections, there’s no due process,” said Susannah Karlsson, an attorney with the Brooklyn Defender Services, which provides free legal help to people who can’t afford it. “It’s a private company acting as prosecutor, judge, jury, and collector. That’s remarkable.”

Another lawyer, Steven Wasserman of the Legal Aid Society’s Criminal Practice Special Litigation Unit, said it sounded like CEC was “flirting with the crime of coercion in the second degree”—at least in New York State, where that crime is defined as compelling or inducing “a person to engage in conduct which the latter has a legal right to abstain from engaging in… by means of instilling in him or her a fear that, if the demand is not complied with,” he or she will be accused of a crime or face criminal charges. In other words, pressuring people into giving up their rights in exchange for $320.

CEC executives emphasized that not one of the 20,000 people who have gone through their program were coerced into doing so. “It’s all voluntary,” Huntsman told me. “If someone started to take the course and paid for it—if they change their mind and they want to get their day in court, we’ll refund their money and put the case back in the retailer’s hands. They’ve got multiple opportunities to step back from this.”

Huntsman added that when offenders are apprehended, they are shown a brief video about CEC before they’re sent home, which tells them that if they believe they are innocent, they should obtain legal counsel and fight whatever charges may come. But according to Caffaro, more than 90 percent of people who have been offered the course during CEC’s four years in business have elected to take it.

The core of the CEC course—which primarily lives online, but can also be taken on paper—was developed by Robert Setty, a clinical psychologist in Austin, Texas, and adapted by CEC for the purpose of rehabilitating shoplifters. The course takes a total of about six to eight hours to complete, and those who sign up are required to finish and pay within 90 days of their apprehension. If they don’t, their cases revert to the retailer’s loss-prevention department, which usually means the police are called, and formal charges ensue.

The CEC course for adults—there’s a separate version for juveniles, who can only enroll in CEC with the consent of a parent or guardian—focuses on helping accused shoplifters develop life skills, so that they are less likely to reoffend in the future, Caffaro said. “There’s a chapter that helps them understand what could have happened if they’d gone through the traditional process. But after that, we give them skills and the ability to actually go out and get a job,” he said. “These people that are getting apprehended typically haven’t been taught the life principles of how to build a resume, how to be presentable in an interview. They haven’t been given the skills to understand what a budget is, never mind how to manage their money. So as they’re going through the course, they build their own resume, they build their own budget, a work-out plan, an eating plan.”

That sounds pretty helpful—and according to CEC’s own analysis, it works: When the company presented a law enforcement agency in Florida with a list of several hundred people in their jurisdiction who had completed the CEC course during the previous two years, they were told that less than 1 percent of the sample had since been arrested for any crime, according to Huntsman. It’s important to note that CEC’s study was not verified by any outside experts.

Helping people is what CEC executives talk about most when asked to describe their mission. “We operate on the premise that some good people make some dumb mistakes,” said Huntsman. “I have yet to talk to a prosecutor or a law enforcement official who would say that, for first-time offenders, the best thing to do is strap them in handcuffs, haul them off to jail, and prosecute them. That’s where they’re going to learn to be a criminal.”

A lot of defense attorneys and criminal-justice reformers would agree with that. But that doesn’t mean they see CEC as the solution. Alexis Karteron, a senior staff attorney at the New York Civil Liberties Union who focuses on civil rights, says the problem with CEC’s model is that retailers make mistakes when identifying shoplifters—and that, as demonstrated during New York’s recent “shop and frisk” scandal, there’s good reason to think people who are wrongly accused tend to be disproportionately minorities.

“It’s very, very troubling,” said Karteron, referring to the practice of offering suspects the chance to avoid prosecution in exchange for money. “How are they figuring out who is a suspected shoplifter? Do they have criteria for figuring that out? Whoever they target, they’re going to induce into admitting their guilt by saying ‘we’ll call the cops,’ and that is very worrisome if there are not standards in place to make sure their suspicion is founded in fact, rather than just a hunch.”

Asked whether CEC takes steps to ensure that innocent people aren’t simply agreeing to pay for their courses because they’re too scared to deal with police and prosecutors, Caffaro deflected, saying that CEC has nothing to do with the approach retailers take in identifying suspects.

“We plug into the current policies and procedures of the retailer, meaning the loss prevention agents … are trained by the establishment, when they’re hired, on how to make those stops, and how to go about making those stops in the right way,” he said.

That is not quite good enough when you’re offering suspects a chance to buy their way out of being arrested, said Susannah Karlsson of Brooklyn Defender Services. “What we know for sure is that [security guards] don’t have a 100 percent hit rate” when it comes to correctly identifying shoplifters. “That’s why we have a criminal justice system and that’s why we have defense attorneys,” she said.

Huntsman says he thought about this argument himself when he first started his company. But ultimately he decided that CEC would make the world a better place.

“It’s a win from every angle,” he said. “It’s a win for the offender. It’s a win for the retailer. It’s a win for the criminal justice system. It’s a win for the community. Who loses in this?”