Thanks to the zero liability policy offered by most credit card issuers, if your credit card is stolen you’re typically only liable for a very small portion of the unauthorized purchases- if any. Even if a thief charges thousands of dollars on your credit card, a zero liability policy means you don’t pay for it.
You’re not the only one affected by your stolen credit card, though. The retailers who accepted the stolen credit card (not knowing it was stolen, of course) lose price of the merchandise purchased with the credit card, and also considerable amounts of time and effort as they attempt to recover some of their costs.
Who do you think pays for the costs of credit card theft? If the cardholder of the stolen credit card is not required to pay for the unauthorized charges; and the thief is rarely caught; and the retailers are out the merchandise that was purchased with the stolen credit card- who pays for all of these financial damages? Consumers. Retailers raise their prices and credit card issuers raise their interest rates and fees to help compensate for credit card theft.
So while the cardholder of the stolen credit card doesn’t pay for the unauthorized purchases; the rest of the consumers who are already paying for their purchases are paying higher fees to compensate for the stolen cards.
Attorney General Larry Long spoke to the South Dakota Retailers Association about loss prevention in Sioux Falls on April 3, 2007. Long says that retailers need a plan for how to catch shoplifters, in order to alleviate some of these escalating costs. The seminar that Long spoke at was sponsored by the South Dakota Retailers Association and aimed to assist retailers for developing strategies to stop theft, fraud and scams.
Statistics provided by The Retailers’ Association indicate an annual inventory loss of over $37 billion nationwide for theft from employees, shoplifting, vendor fraud and administrative errors.
The Vice President of Loss Prevention for the National Retail Federation based in Washington, DC, Joseph LaRocca, said they have developed a system that law enforcement and businesses can use in order to track nationwide theft. It’s a secure online database system created because LaRocca insists that the issues of theft, fraud and scams effect everyone.
Attorney General Long, and the office of the Attorney General are not directly involved in the prosecution of shoplifters and thieves, but the state assists people and businesses who have been targets of such crimes. The local law enforcement handles the prosecution. While the goal is to be advocates of consumers, Long realizes that doesn’t necessarily mean in order to do that we have to be on the opposing side of merchants and retailers.
It’s estimated that only about one out of every eight or nine cases of fraud are reported to the state’s consumer protection office. Scams and fraud are extremely common, and more so than most people fully understand. Long says, “There is not a week that goes by that we don’t have at least one person who says they’ve been a victim of such a scam.”
Under laws in South Dakota, retailers can attempt to recoup lost merchandise and expenses from the thieves. In order to effectively do this, Long believes that retailers must have a plan in place to catch shoplifters.
A plan would require retailers to effectively and properly detain thieves until law enforcement arrives once they are identified as thieves, and as Long suggests, there should be a standard policy in place for handling such activity.