Proposed Reforms Aim to Ensure Crime Doesn’t Pay on Retail Theft


Money from retail theft supports the illicit drug trade, prostitution, homelessness, and California’s ever increasing overdose deaths, which exceeded 10,000 deaths in 2021.

California is in its tenth year of a noble but failed idea – Prop 47.   Despite the well-meaning and overwhelming number of voters who supported Prop 47 when it was passed in 2014 and who have twice resisted ballot initiatives to amend it, Prop 47 has not lived up to expectations – perhaps it never could – and today we are feeling the consequences.

According to the National Retail Federation the retail shrinkage rate, the amount of loss experienced by retailers,  increased to 1.6 percent in 2022 from 1.4 percent in 2021.  In all, 2022 shrinkage accounts for over $112 billion dollars in losses nationwide.   According to the report:

While retail shrink encompasses many types of loss, it is primarily driven by theft, including organized retail crime. Theft – both internal and external – accounts for nearly two-thirds (65%) of shrink overall and up to 70% in some retail sectors.

That means that nationwide thieves share in a $78.4 billion dollar retail theft pot of gold.   While the NRF doesn’t provide state by state statistics, it is safe to assume that California, with roughly ten percent of the US population, accounts for at least $7.8 billion in those losses.  In 2022 there were a reported 902,977 property crimes, subtracting for burglaries and auto thefts that leaves 577,733 of which were defined as larcenies or theft.

Simple, but albeit unscientific arithmetic, shows that the reported larcenies could be worth an average of over $13,500 each.  This would be an alarming figure if they were worth just a quarter of that.

Money from retail theft supports the illicit drug trade, prostitution, homelessness, and California’s ever increasing overdose deaths, which exceeded 10,000 deaths in 2021.

These and other statistics are not lost on the California Legislature which, according to the California League of Cities, has resulted in “at least 30 bills aimed at reducing retail theft this year. But a bill backed by Assembly Speaker Robert Rivas and Asm. Rick Zbur has gained the lion’s share of attention.”

Assembly Bill 2943, called the California Retail Theft Reduction Act, is co-authored by Rivas, Zbur and the bipartisan Assembly Select Committee on Retail Theft.

If enacted, AB 2943 would target professional retail thieves and stolen goods resellers, allow for aggregation of crimes where there are multiple victims, require online resellers to establish a “chain of custody” to establish the origin of goods being sold, require large retailers to maintain non-proprietary theft data, expand diversion and rehabilitative programs for offenders, allow police officers to arrest without a citizen’s arrest for crimes the officers didn’t witness, and allow repeat offenders to be held in custody.

Will these reforms work?  The past president of the California District Attorneys Association (CDAA), Jeff Reisig doesn’t think so.

In 2023, the CDAA conducted a study of organized retail theft (ORT) prosecutions statewide and found that the current ORT statute (490.4 PC) is ineffective and nearly impossible to prove.  So much so that in 2023, only 36 percent of California counties even attempted to prosecute individuals under the statute.  In a survey conducted by the CDAA, just three counties of those who provided data reported more than ten prosecutions.

Most counties had no successful prosecutions at all.  Los Angeles, San Francisco, and Alameda County did not participate in the survey.   The statewide convictions for the ORT stand at just .08 percent of all theft prosecutions statewide.

Reisig points out that prior to Prop 47, “case law in California already restricted a prosecutor’s ability to aggregate smaller amounts from separate thefts to get a felony.  That controlling law has never changed.”  Legal experts including district attorneys, public defenders and the Legislature’s own lawyers in the Office of the Legislative Counsel agree.

Even in rare case of a criminal conviction under the ORT statute, the individual convicted will be sentenced under AB 109 (what prosecutors call an 1170h sentence) and receive a short county jail sentence due to overcrowding.

So new are the very few convictions under 490.4 PC and so light the sentences that appeals are few and yet to be decided.   It is possible that California’s Appellate Courts will rule both 490.4 and AB 2943 are inconsistent with the intent of Prop 47 and consequently unenforceable.

Reisig believes that the only alternative is to repeal Prop 47. CDAA’s solution is the Homelessness, Drug Addiction, and Theft Reduction Act, which is currently gathering signatures to qualify for the November 2024 ballot.

The Act would continue to provide drug and mental health treatment for people who are addicted to hard drugs such as fentanyl, cocaine, heroin, and methamphetamine but will close many of Prop. 47’s loopholes regarding retail theft and drug crimes.  Among its provisions, the Act would add new laws to address the increasing problem of “smash and grab” thefts that result in significant losses and damage, or that are committed by multiple thieves working together.

Have Californians reached the tipping point?

In 2022, California’s violent and property crime statistics increased over 6 percent – bucking a general downward trend nationwide.

Whether AB 2943 will be enough to reduce crime and satisfy voters or will they turn to the ballot box in November is still an open question.

Steve Smith is a senior fellow in urban studies at the Pacific Research Institute, and author of the recent PRI study on California’s growing crime problem, “Paradise Lost.”


Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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