Most credit card companies have a policy called "zero liability," which means that if your credit card is stolen, you are usually only responsible for a small part, if any, of the unauthorised purchases. Even if a thief puts thousands of dollars on your credit card, you don't have to pay for it if you have a "zero liability" policy.
Your credit card being stolen doesn't just hurt you, though. The stores that accepted the stolen credit card (not knowing it was stolen, of course) lose the cost of the goods bought with the card as well as a lot of time and effort trying to get some of their money back.
Who do you think pays the bills when someone steals a credit card? Who pays for all of these financial damages if the person whose credit card was stolen doesn't have to pay for the unauthorised charges, the thief is rarely caught, and the stores are out the goods that were bought with the stolen credit card? Consumers. To help make up for credit card theft, stores raise their prices and credit card companies raise their interest rates and fees.
So, even though the person whose credit card was stolen doesn't have to pay for the unauthorised purchases, the rest of the customers who are already paying for their purchases have to pay more in fees to make up for the stolen cards.
On April 3, 2007, in Sioux Falls, South Dakota, Attorney General Larry Long talked to the South Dakota Retailers Association about how to stop theft. Long says that some of these rising costs could be stopped if stores had a plan for how to catch shoplifters. The South Dakota Retailers Association put on the seminar where Long spoke. The goal of the seminar was to help retailers come up with ways to stop theft, fraud, and scams.
Statistics from The Retailers Association show that employees stealing, shoplifting, vendor fraud, and administrative mistakes cause over $37 billion in inventory loss each year across the country.
Joseph LaRocca, who is the Vice President of Loss Prevention for the National Retail Federation in Washington, DC, said that they have made a system that businesses and law enforcement can use to track theft across the country. It's a safe online database system that was made because LaRocca says that theft, fraud, and scams are problems for everyone.
Shoplifters and thieves aren't prosecuted by Attorney General Long or the office of the Attorney General, but the state helps people and businesses that have been hurt by these crimes. Local law enforcement is in charge of the case. Even though the goal is to help consumers, Long knows that doesn't mean we have to be against merchants and retailers.
The state's consumer protection office only hears about about one out of every eight or nine cases of fraud. Scams and fraud happen all the time, even more than most people realise. Long says, "Not a week goes by when we don't hear from at least one person who's been taken in by one of these scams."
South Dakota has laws that let stores try to get stolen goods and costs back from the thieves. Long thinks that stores need to have a plan to catch shoplifters if they want to do this well.
As Long suggests, there should be a standard policy for how to deal with this kind of activity, and a plan would require retailers to hold thieves until the police arrive in a safe and effective way.
