What should a franchisee do if a customer shoplifts?

Summarise with: ChatGPT Claude Perplexity Microsoft Copilot

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Table of Contents

• How to accuse a customer without becoming liable
• Case law
• Takeaways
• Conclusion

Making sure you have clear policies and procedures for your staff when dealing with customers is very important, particularly if you want to avoid any legal dispute with unsatisfied customers. If a customer shoplifts, don’t keep them in the store against their will, and certainly don’t become aggressive.

How to accuse a customer without becoming liable

It is unfortunate that theft in a retail environment is a fact of business. Franchisor and franchisee staff should have training and clear written guidelines and procedures for how any customer should be approached where there are concerns of theft within a store.

Case law

A NSW Court decision involving a customer and a retail supermarket provides a reminder and some guidance for franchisors and franchisees in the retail industry.

A customer of a supermarket was confronted by the store manager who accused him of theft while shopping saying ‘We’re going to keep you – I will keep you here as long as it takes. You’ve been stealing prawns and we want to see them’. The confrontation between the men was heated, lasted between 10 and 20 minutes and was witnessed by about 30 bystanders. One bystander who gave evidence at the trial described both the customer and the store manager as being ‘very distressed’. Eventually the police were called, though no charges were laid against the customer.

The customer commenced proceedings against the supermarket for injurious falsehood, assault, intimidation, harassment and wrongful imprisonment. The supermarket vigorously defended the case.

The Judge heard evidence from 7 witnesses and had to make findings on credibility and the reliability of the testimonies and ultimately favoured the customer’s version of events. The Court noted that the manager was entitled to make accusations, however, the manner in which it was done was ‘aggressively confrontational’ and went ‘too far’.

Takeaways

This case highlights that:

• any concerns should be raised discreetly and calmly, without immediate aggressive accusations;
• staff should listen and obtain an account from the customer before accusations are made; and
• the customer should be afforded an opportunity to defend themselves against the allegations.

For Coles, this was a very costly and, ultimately, embarrassing situation. Not only was the customer awarded significant damages, but Coles also had to pay his costs of the proceedings, as well as their own legal/insurance costs. The case was reported in the major print media, and in the age of social media, any negative publicity travels quickly and can prove damaging to your brand.

Conclusion

LegalVision has experienced franchise lawyers who can assist with implementing the right policies and procedures into the Operations manual and company Employment Contracts. If you need to train your staff on dealing with alleged shoplifters, get in touch with LegalVision today on 1300 544 755 and we will provide you with a complimentary legal health check.