Michigan Penal Code Section 356c (MCL 750.356c): First-Degree Retail Fraud

1. Definition and Elements of the Crime

“Retail fraud” is another word for shoplifting. In Michigan, retail fraud is graded into three degrees depending on the value of the pilfered property. First-degree is the most serious degree, involving theft of property worth $1,000 or more.

There are three theories of first-degree retail fraud. First is a straightforward “theft” theory, which has five elements:

1. First, the defendant took some property that a store offered for sale.
2. Second, the defendant moved the property. Any movement is enough. It does not matter whether the defendant actually got the property past the cashier or out of the store.
3. Third, the defendant intended to steal the property—in other words, the defendant intended to permanently take the property from the store without the store’s consent.
4. Fourth, this happened either inside the store or in the immediate area around the store, while the store was open to the public.
5. Fifth, the price of the property was $1,000 or more.

The second way to establish first-degree retail fraud is a “price-switching” theory:

1. First, the defendant altered or switched a price tag or in some other way misrepresented the price of property.
2. Second, the defendant did this intending either to pay less than the actual price for the property or not to pay for the property at all.
3. Third, this happened either inside the store or in the immediate area around the store, while the store was open to the public.
4. Fourth, the difference between the sale price and the price the defendant intended to pay was $1,000 or more.

The third way to establish first-degree retail fraud is a “false exchange” theory:

1. First, the defendant exchanged or tried to exchange property that had not been paid for and that belonged to the store. It does not matter whether the defendant tried to exchange it for money or other property.
2. Second, the defendant did this with the intent to defraud or cheat the store.
3. Third, this happened during store hours, either inside the store or in the immediate area around the store.
4. Fourth, the amount of money or value of the property that the defendant obtained or attempted to obtain was $1,000 or more.

So first-degree retail fraud can be committed in many ways. And the value of the stolen property can be aggregated if the defendant committed separate theft incidents that were part of a scheme over a 12-month period.

2. Examples

A woman is shopping at an expensive department store. She takes five dresses into a fitting room. She walks out holding only two. Security guards stop her and find the other three dresses—worth several hundred dollars each—stuffed in her purse.

A man goes into a store to buy a new grill. He sees a top-of-the-line model that costs $1,500. He removes the price tag and replaces it with the tag from a low-end model that costs $100. The cashier notices the switch and alerts a loss prevention officer.

3. Related Offenses

Other similar or related offenses include:

1. Larceny, MCL 750.356
2. Second-degree retail fraud, MCL 750.356d
3. Third-degree retail fraud, MCL 750.356d

4. Defenses to First-Degree Retail Fraud

Common defenses to first-degree retail fraud include (1) lack of intent and (2) mistake.

Take the woman with the purse full of dresses. She might claim that she put the dresses in her purse planning to take them out and pay for them at the register. In other words, she wasn’t trying to steal them. The viability of this defense will depend on the circumstances. For example, if the woman had no money or credit cards in her purse, it would be difficult to argue that she planned to pay for the dresses. If, on the other hand, the woman was wealthy and had ample cash or credit cards in her purse, “I was going to pay for them” will likely be more believable.

Now consider the man who tried to switch the price tags on the grills. Suppose he claims that he didn’t switch the price tags at all and that an employee at the store must have mismarked the expensive grill. If that’s the case, the man didn’t commit price-switching. But how can he prove he didn’t switch the tags? Today, most stores—especially those peddling expensive merchandise—have cameras covering every inch of the store. The cameras will often prove or dispel a shopper’s claim of innocence.

5. Penalties

First-degree retail fraud is a felony punishable by up to 5 years in prison plus a fine of up to $10,000 or 3 times the value of the difference in price, property stolen, or money or property obtained or attempted to be obtained, whichever is greater.

6. Criminal Defense for First-Degree Retail Fraud

First-degree retail fraud is the most serious form of retail fraud. Store Owners often aggressively push for charges, and most prosecutors are happy to oblige. If you’re under investigation for or have been charged with first-degree retail fraud, you need to hire an experienced criminal defense attorney as soon as possible. Grabel & Associates has been in business for more than 20 years and has handled hundreds of theft cases. Our highly respected attorneys know what it takes to obtain the best result in your case.

For more information about first-degree retail fraud and to talk about your case, contact Grabel & Associates at (800) 342-7896.