How Civil Demand Letters Work

If you know a person who has been caught shoplifting - an act such as taking merchandise from a retailer without paying, retail fraud, or fraudulently paying less than the retail price due to an act such as price tag switching - that person may have received a civil demand letter from the store where the shoplifting incident occurred.

A civil demand letter asks that the shoplifter compensate the retailer for the costs associated with the shoplifting incident, and the amount demanded can sometimes be surprisingly high.

So what are civil demand letters and how do they work?

What is a Civil Demand

A civil demand letter is a demand from a retailer, sent to a person who is caught shoplifting, asking that the person pay a sum of money to settle a possible civil claim against them by the merchant. Although the details and amounts permitted vary by state, all states have civil recovery laws that permit retailers them to demand compensation from suspected shoplifters.

How Much Money Will a Civil Demand Request

As a general rule civil demand letters ask that the recipient of the demand pay:

  • The value of the merchandise: If the merchandise was not recovered in a condition that would allow for its resale, the merchant will normally demand the value of the merchandise taken or damaged by the shoplifter; and

  • Compensation for related expenses and losses: Civil demand laws are written with the understanding that merchants incur costs to try to prevent shoplifting and to catch and prosecute shoplifters, as well as the cost of merchandise lost to shoplifters who are not caught. Civil demand laws thus allow a merchant to charge an additional amount to help offset those costs. The amount that can be charged is sometimes based upon the value of the merchandise the shoplifter stole or attempted to steal, and is subject to a cap.

  • Legal fees: Civil demand laws normally allow the merchant to recover the cost of an action to collect the sum demanded from a shoplifter, potentially including attorney fees if a lawsuit is filed to recover the money.

In addition to the shoplifter, when the person caught shoplifting is a minor at the time of the incident, most states also hold the minor's parents responsible for payment of the demand.

When Will a Civil Demand Letter Come

The amount of time that it takes to receive a civil demand letter will vary by merchant, and in some cases no civil demand will ever arrive. If a civil demand is sent, it is likely to arrive within a few weeks of the incident, but in some cases a letter may not arrive for a period of months. As a general rule, the longer you wait without receiving a civil demand, the less likely it is that you will receive one.

What to Do if You Receive a Civil Demand

If you receive a civil demand, you may be wondering, should you pay the amount demanded or ignore the letter? If you are inclined to pay the demand, consider offering the merchant or its agent a lower amount as a settlement of the demand. Some civil demands can be settled for a relatively modest amount (such as $50) even if the amount demanded in the letter is much higher.

Even if you are not inclined to pay the demand, you may benefit from trying to negotiate a modest settlement. Settling the civil demand will give you the peace of mind of knowing that you won't be sued, and that the demand won't end up as a debt on your credit history.

If you reach a settlement agreement, make sure that the agreement is confirmed in a signed written document before you pay the agreed amount.

How Do You Pay a Civil Demand

The civil demand letter will include instructions on how to make a payment, and where the payment should be sent. The recipient will most often be the retailer itself, or a law firm or collections firm that the merchant has hired to issue civil demands and process payments.

What Happens if You Don't Pay a Civil Demand

If you do not pay a civil demand, the merchant's options include:

  • Filing a Lawsuit: The merchant has the option of filing a lawsuit, and may be able to recover attorney fees if it prevails in the lawsuit.

  • Reporting the Demand to Credit Reporting Agencies: A merchant can report the unpaid balance of a civil demand to credit bureaus, causing it to appear as an unpaid debt on your credit report. This type of debt is not a consumer debt, and is thus not subject to the protections of the Fair Debt Collection Practices Act.

Civil demands are legally enforceable, but most merchants do not file lawsuits to collect unpaid civil demands. Some people thus take the position that recipients should ignore the demands. As all merchants have the option of suing, and some merchants are considerably more likely to take action than others, there is a risk involved in ignoring the demand.

A lawsuit to collect a civil demand is significantly less likely in states in which a merchant cannot recover lawyer fees.

What Happens After You Pay a Civil Demand

The payment of a civil demand resolves the retailer's claims for a civil recovery from the shoplifter.

The payment does not affect any criminal prosecution related to the shoplifting incident. However, if a shoplifter is ordered to pay restitution to the retailer as part of any disposition of a criminal charge, the shoplifter should document any payment made in response to a civil demand and seek a credit of that amount toward any restitution ordered by a criminal court.

What if You Receive a Civil Demand But You Weren't Shoplifting

Most stores only send civil demands to suspected shoplifters if the shoplifters are being criminally prosecuted, or if the shoplifter signed a confession at the time of the incident. Still, sometimes a civil demand will be sent to somebody who happened to be in the store with a friend or relative who was caught shoplifting, even though the person was not participating in any act of theft, or the person accused of shoplifting asserts that the store is mistaken in its accusation.

If you do not believe that you are liable to pay a civil demand, based upon your not having done anything wrong, you have the option of not paying the demand. If you are sued, you may defend yourself against the lawsuit, attempting to convince the court that you were not shoplifting and are not responsible for the acts of any other person who may have been caught shoplifting. You should make sure that you file a timely and proper answer to any lawsuit, to avoid having a default judgment issued against you.

Can You Be Prosecuted for Failure to Pay a Civil Demand

As a civil demand is issued independently of any criminal case, nonpayment can result in a possible civil suit but does not affect prosecution.

There is a possibility that a merchant that has not previously reported a shoplifting incident to the police might do so if a civil demand goes unpaid. However, a merchant should never make a threat that the failure to pay a civil demand will result in criminal prosecution. Such a demand is not lawful and, depending upon the full facts and state law, may even constitute the crime of extortion.

Copyright © 2017 Aaron Larson, All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder. If you use a quotation, excerpt or paraphrase of this article, except as otherwise authorized in writing by the author of the article you must cite this article as a source for your work and include a link back to the original article from any online materials that incorporate or are derived from the content of this article.

This article was last reviewed or amended on May 8, 2018.