The civil recovery notice issued by The Warehouse to shoplifter Laura Fischer, demanding $275 for stealing an item worth $11.

The Warehouse has been accused of illegally demanding "compensation" from shoplifters it catches stealing in its stores.

The claim was made by a lawyer for two foreign tourists in Hastings District Court on Tuesday, who admitted stealing from The Warehouse in Blenheim last month.

The store issued a "civil recovery notice" to German Laura Fischer, 21, and Dutchman Jimmy Haluani, 22, demanding $275 each in recompense. Fischer's notice said the goods she had taken were worth $11.

FAIRFAX NZ The two foreign shoplifters said they believed they were obliged to pay the civil recovery notices issued by The Warehouse. But their lawyer told Hastings District Court the demands were illegal.

Lawyer Alan Cressey said the pair believed they were required to pay up, but in fact the "intimidating" notice was illegal, he told Judge Max Courtney, and was a way for The Warehouse to claim money it was "not entitled to".

READ MORE:

* Tourists target The Warehouse

* Is shoplifting fee legal?

* Shop used 'standover tactics'

Such cases have previously attracted criticism from the legal profession, with many agreeing such civil recovery notices were illegal.

Upper Hutt barrister Michael Bott successfully fought a case about eight years ago in which a homeless teenager was prosecuted for stealing a muffin from a Wellington supermarket. He refused to pay more than $100 demanded by the supermarket in a civil recovery notice "because he didn't have any money". He was later discharged without conviction.

"It was completely outrageous," Bott said on Tuesday. "They went after a homeless teen, who was starving, over a muffin.

"I said in court, 'This man needs a muffin break'."

Bott believed such notices bordered on extortion, because they threatened to seek more money if the shoplifter refused to pay up.

"If you are caught stealing a $2 tube of lipstick, you might suddenly get hit by a $275 cost. It's difficult to see how to justify that. I don't think it's lawful."

Community Law, a nationwide free legal service, agreed.

Its handbook stated that shoplifters had no legal responsibility to pay an amount charged in a civil recovery notice unless the store proved a civil claim against them in the Disputes Tribunal or district court.

"It's doubtful whether these notices are legally enforceable, and you can refuse to pay them."

However, retailers using civil recovery notices have the backing of the country's largest trade association, Retail NZ.

Spokesman Greg Harford said retail crime cost New Zealand about $1.3 billion a year, which was mostly from shoplifting, and was expensive for retailers to deter, through such measures as installing CCTV cameras and employing security guards.

Retailers were forced to take their own action, such as issuing civil recovery notices, because police typically treated retail crime as a low priority, he said.

"This has arisen because there is no effective mechanism for retailers to take against shoplifters.

"We encourage our members to pursue all avenues to deter shoplifting and to seek restitution from those who steal."

Harford was aware of several large retailers using civil recovery notices, including The Warehouse and Farmers, and believed the notices were enforceable in court.

"I think retailers will be acting on legal advice. We certainly believe they are legal."

Fischer and Haluani were accused of being part of a shoplifting gang that stole $1200 of clothing, electrical gear, outdoor equipment and groceries from six Blenheim stores, of which The Warehouse was one.

They appeared in court in Hastings because they are in Hawke's Bay picking fruit.

Cressey asked the judge to take the $275 payments made to The Warehouse into consideration if he was going to fine the pair.

But Judge Courtney said the "brazen" nature of their offending meant it warranted more than a fine, and sentenced each to 100 hours of community work.

He also ordered them to pay $132 each in reparations to cover the value of unrecovered goods.

The Warehouse has been approached for comment.