Shoplifting Fraud Under $5000 charges in Canada

Price tag switching, improper self-checkout activity, false returns are all classified as fraud under $5000 by s. 380(1)(b) of the Criminal Code

When most people think of shoplifting they think of someone sneaking an item under their jacket but many cases are fraud allegations that the accused changed a price tag, obtained an improper discount, fraudulently tried to obtain store credit on a gift card for a return item, or worked in tandem with an employee to be given a discount they were not entitled to receive.

Most people do not realize how serious the potential consequences to their actions are until it is too late.

As of 2022 with the increased use of self-checkout machines people are tempted to manipulate price tags, improperly scan items, fail to scan items, and sneak unpaid merchandise out of the store. As a result more people are being charged with fraud under $5000 (CC s. 380(1)(b)) after using the self-checkout machines. Most of the cases we see come from Loblaws/Superstore, Canadian Tire, Home Depot, Shoppers Drug Mart, Costco, and Wal-Mart but this by no means an exhaustive list.

Some are also charged with Theft Under $5000 (CC s. 334(b)) and Possession of Property Obtained by Crime (CC s. 354(1)) along with Fraud. The exact charges will by listed on the Form 9 Appearance Notice or Form 10 Undertaking. Anyone who receives these documents in Canada is being criminally charged by the police and their case will be handled by the courts.

Can I just go back to the store later and ask the manager or owner to drop the charges?

Once you receive a Form 9 or Form 10 the store is simply a Crown witness/victim and is not in charge of the prosecution. They have no power to drop the charges whatsoever. Please also note that most stores (particularly the larger ones) have a policy to strongly ask the police to press charges. They put a lot of pressure on the police to charge in some jurisdictions.

Price tag switching Fraud Under $5000 cases

The most common form of fraud under charges relating to shoplifting involves people who switch a price tag or otherwise attempt to manipulate the price they pay for the item(s) they purchase in a store. Sometimes the accused will scan a barcode that does not correlate to the items they are purchasing. In most cases the accused takes a price tag from another item in the store and sticks it on something else to attempt to pay a lower price.

Improper barcodes are sometimes obtained via the internet. Most of the fraud charges related to these cases happen at the self checkout machines but sometimes the accused goes through the regular cashier who just happens to notice that something doesn’t match up. At this point the security (loss prevention) will arrest the accused until the police arrive and criminally charge them by giving them a fingerprinting date and court date.

Fraud charges relating to improper use of the self-checkout machines

While stores love self-checkout machines because they reduce their labour costs, they also know that they may tempt some people to try to cheat the system by improperly or not properly scanning items. For this reason, they invest significant amounts of money to have store security guards (loss prevention) to watch and record all activity at the self checkout machines via CCTV video. Store security can move the camera, zoom in on, and document via video every transaction made at the self checkout machines. This is often from multiple camera angles at big-box style stores.

In our experience, the self-checkout machine related cases tend to have more CCTV video footage than others. There are normally multiple cameras focused on the accused. If the loss prevention personnel suspects a person they will actively watch and record their activities by zooming in on them and sometimes also following them around both on foot even before they arrive at the self-checkout. While stores have plain clothes security on the floor, all CCTV camera monitoring is done in the security/loss prevention office. Large big-box stores have security solely dedicated to monitoring the self-checkout cameras from multiple angles.

As of 2022, the CCTV video is most focused on the self-checkout machines, the regular checkout, and on customers who are known to security.

Store security (loss prevention) are following evidence collection rules that normally require high standards before a fraud is reported to the police.

Sometimes they may have previously suspected a person of changing a price tag, improperly ringing in merchandise at the self check-out, or returning items for cash or credit illegally but never had enough to call and report it to the police. These people are “on their radar” so to speak and they will be on the lookout to watch and record them on video the next time they see them in their store. This includes both alleged shoplifters, store employees, and 3rd parties who work in the store stocking shelves, delivering products, etc.

In our experience in Ontario, Canada most of the self-checkout fraud cases will originate from large retail stores such as:

1. Home Depot
2. Superstore / Loblaw stores / Zehrs
3. Wal-Mart
4. Canadian Tire
5. Shoppers Drug Mart

The larger stores and companies have the resources to collect evidence and request the police to charge the accused. They also have far more customers to watch for shoplifting (fraud, theft, etc).

Gift cards, store credit cards, and fraudulent receipt returns

Charges for fraud under $5000 in a department store shoplifting context also often relate to items being improperly returned in exchange for money, gift cards, and store credit. Sometimes the person charged is accused of buying an item using improperly obtained store credit, or using a receipt to return an item that was taken from the shelf. The receipt may be from a prior purchase at the store or a different location or even a receipt found in the parking lot.

At some stores, customers can return items without a receipt in exchange for store credit. Some people charged with shoplifting related offences will be accused of making an improper return. The store security may have been aware of and surveilling the individual for a while to gather the evidence before reporting it to the police. Some of the larger department stores have policies that require their store security to gather more than one incident as evidence before reporting it to the police.

The typical arrest process in a shoplifting fraud case

Whether the offence occurs at the self-checkout or the cashier the charging process is usually pretty similar

After the accused leaves the store security will confront them, arrest them, and hold them for the police to take over the arrest.

Prior to the arrival of the police, security will often try to coax the accused to comply, admit their guilt/confess, and come back with them into the store and subsequently into the usually small security office. At this point the police have often already been called and are on their way to the scene. Security may also ask very personal questions of the accused, handcuff, photograph them (usually with a cellphone), and go through their pockets, bags, and purse. They are legally allowed to conduct a reasonable search incident to arrest.

If the person runs away security will report the information they have to the police such as transaction records (names on credit and debit cards), video evidence, licence plate, accused description, etc. who will attempt to identify the accused and charge them. The police will then cross check the known government photos of the suspect (driver’s licence, passport, OHIP, PR card etc.) with the name and if it matches may show up at the door and arrest the accused. Alternatively, the police may call the accused on the phone (usually from an Unknown/Blocked) number and make arrangements for them to surrender.

The arrest may end in the police providing the accused with a court and fingerprint date in the future. This is normally done by serving them with either a Form 9 Appearance Notice or a Form 10 Undertaking. In other cases they may take them to the police station for processing and eventually release them from the station or hold them for bail in jail to be brought before the courts to decide if they should be released while their case is pending.

Every store has different policies regarding physically restraining accused shoplifting suspects

While some stores will instruct their security to physically arrest those they believe are shoplifting, others have policies that prevent any physical contact. In cases where the accused flees the scene, often believing they are not legally able to be arrested, they may also be charged with escape lawful custody or resisting arrest when the police eventually make contact with them.

It is important to note that while store security are not police officers they do have the power to arrest someone they witness committing an indictable offence as agents of the store via the Criminal Code. While they can detain/arrest a suspect and hold them until the police arrive the amount of force they use must be reasonable.

It should also be noted that fraud under $5000/shoplifting is a Crown elect indictable offence despite the myriad of websites declaring it to be a summary offence. It is not.

In our experience, most fraud under $5000 related charges in the GTA and throughout Ontario result from incidents that occur in larger (big-box) type stores. This is because they have the resources to hire security to watch their customers either in plain clothes (fake shoppers) or via CCTV that is recorded and provided to the police. They essentially have done all of the police work prior to the arrival of the police and hand them the evidence requesting that charges be laid.

Those who get caught or try to shoplift from or defraud small local businesses may be charged and have their CCTV footage exposed on the internet via social media

While the larger stores have more customers and resources to watch them, this is a double edged sword as smaller stores are often even more vigilant to report, publicly expose, and pressure the police to charge those they determine to be shoplifting or defrauding their store. It is generally taken more personally and a somewhat rare event to catch someone switching a tag to steal from a small, perhaps family owned store. It may have taken hours of reviewing CCTV video footage to uncover the incident.

Smaller stores also have, arguably, more at stake from retail theft or fraud because they are locally owned businesses whose store owner will actually see a loss in their pocket. They tend to call the police to report the crime and also out the person on various social media platforms especially if they are not aware of their identity.

Virtually everyone is wearing a lower face mask due to COVID which makes smaller stores more likely to ask the public for information about the person’s identity than before. Many of these stores are in smaller Ontario communities leading to them easily being identified, shamed, and charged by the police with fraud, theft, or more.

We often get calls from shoplifters who defrauded a local store and later found a video of themselves on Facebook, YouTube, or other forms of social media. If the video gets enough attention local news may also report on it.

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