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Is It Legal for Stores to Demand a Receipt Upon Exit?

One of my pet peeves is the exit bag check—the “voluntary” security bag inspection when leaving a store. There are a few varieties I’ve noticed over the years, and recently it seems more and more “big box” stores are implementing the procedure.

A common scenario is leaving a store and just before exiting, a security guard will ask to see your receipt and open your bag. Mostly it’s a quick procedure, although during rush hours, it can often involve another queue to wait in.

Consumers can rest assured that exit bag checks are completely voluntary and you do not have to comply. Furthermore, unless the store has reasonable suspicion of theft, it's perfectly legal to simply say “no thanks” and continue to your car.

But it’s not so simple; declining the inspection will certainly ruffle some feathers, raise tensions, and at worse, trigger an undesired result of further inspection or detention. Additionally, some club stores like Costco have member agreements that allow for exit checks, and failing to comply can mean forfeiting your membership. So most people simply conform and treat it as an inconvenience of shopping.

Exit checks fall under the moniker of “Loss Prevention.” This is a loose term used to describe measures stores take to keep products from illegally flying off the shelf. And you can’t blame them, with “Inventory Shrinkage” as high as 20 percent annually in some sectors; retailers are certainly entitled to protect their stock. However, the more common shrinkage occurs around 1 to 2 percent annually according to a 2006 National Retail Security Survey.

The study broke down the inventory loss into these categories:
      • 46.8 percent from employee theft
      • 31.6 percent from shoplifting
      • 14.4 percent from administrative error
      • 3.75 percent from vendor error
      • 2.86 percent from unknown error

Why are stores performing exit checks?
There are a number of reasons stores implement loss prevention tactics like exit checks; they work to prevent both employee and consumer theft. It’s a low-priced method that doesn’t require special skills or training, and is usually accomplished with low paid employees.

Exit checks:
      • Ensure cashiers are correctly charging for items
      • Prevent errors for automated pricing systems
      • Create a perception of a more secure store to potential shoplifters
      • Ensure all items are paid for

What are the laws surrounding this practice?
The law varies slightly based on municipality; however, there are overriding rules to which stores must comply. A store can never force someone to perform an exit check. They can ask the customer only after they paid for goods. This rule is unfortunately is sometimes violated, as in this hair-raising account.

A store can only detain someone if there is reasonable suspicion that there has been a theft. Most stores follow a six-step rule for probable cause:

      1. You must see the shoplifter approach your merchandise
      2. You must see the shoplifter select your merchandise
      3. You must see the shoplifter conceal or carry away or
          convert your merchandise
      4. You must maintain continuous observation of the
      5. You must see the shoplifter fail to pay for the
      6. You must approach the shoplifter outside of the store

Short of this, a store can risk a false arrest claim, which is often more costly than the suspected merchandise loss itself. If a store detains a suspect, they must do so for the purpose of recovering their merchandise and/or summoning the police. The suspect is not technically under arrest; rather, he/she is “temporarily investigated.”

Personally, I hate exit checks, but I’m torn on the issue. I don’t like to be treated with suspicion whenever I buy something, and I certainly don’t enjoy being delayed trying to leave the store. On the other hand, I do realize that it is an effective means to prevent loss and appreciate the reasons stores use this technique. Overall I dislike it, as many Americans do, and prefer a less invasive system like electronic tagging, increased surveillance, and employee monitoring. Stores should be able to protect themselves, but not at the expense of their customer.