Costco earns top marks in a Consumer Reports poll ranking retail chains

Costco Wholesale's receipt-checking policy states: "To ensure that all members are correctly charged for the merchandise purchased, all receipts and merchandise will be inspected as you leave the warehouse."

(Oregonian/file photo)

A story about a Costco Wholesale shopper who wouldn't show his receipt as he was leaving the chain's Northeast Portland store -- and ultimately ended up with a broken leg -- has generated lots of debate among readers and civil attorneys alike.

Timothy Walls filed a $670,000 lawsuit last week against Costco, claiming store employees wrongly held onto his shopping cart -- full of his newly purchased items -- when he refused to show his receipt. The store has a blanket policy of checking receipts at the exit.

When Walls tried to remove one employee from his shopping cart by grabbing onto the employee’s shirt collar, a second employee executed a martial-arts style strike to Walls’ leg, breaking it in several places, according to the suit.

The details of the case have spurred many readers to wonder exactly when a store can detain and search a customer as part of loss-prevention efforts -- and just what a customer’s rights are.

Nearly 5,000 votes had been cast in an OregonLive.com poll, and three out of four respondents were siding with Costco -- that stores should be able to have blanket receipt-checking policies in an effort to prevent shoplifting. About 25 percent of respondents thought that even though shoppers are on private property, they still have rights against unreasonable stops and searches.

Mark Bunch saw the issue as straightforward, but his view fell into the minority:

"You can't detain someone after they have paid for their merchandise. It is their property regardless of policy. He is going to win this lawsuit for sure."

1962gal held a more popular view:

"How many people walk out of Costco in one hour on a Saturday? If one-half of one percent were tempted to walk out with something, how much stuff would that be? If checking at the door makes people who want to shoplift want to do it somewhere else, why would I have a problem with that?

Privacy? I can't imagine owning a store and having my customers tell me it isn't my right to look carefully at what they're carrying with them as they walk out of my store pushing the cart I provided them…"

Portland attorney Mark McDougal -- whose firm Kafoury & McDougal has represented people wrongly accused of shoplifting from Walgreens, The Dollar Store, H&M and other retailers -- is not representing Walls or associated with the case. But attorneys from his firm read the details of the case with interest.

When representing clients, McDougal routinely points to Oregon law, which he says states that stores can stop and question a shopper if the store has “reasonable suspicion” that a theft might have occurred.

What's more, under ORS 131.655, store employees can take a shopper by the arm and even handcuff the shopper during a theft investigation if the employees have reached a higher standard of "probable cause," such as an employee actually witnessing a theft occur. The law -- also known as the Shopkeeper's Exception Law -- states that the detainment must be for a reasonable time and be done in a reasonable manner.

Now what’s different about Walls’ encounter at Costco, McDougal said, is that Costco didn’t have probable cause, let alone reasonable suspicion, to stop Walls, according to the facts presented in Walls’ lawsuit.

“They just stop everybody,” McDougal said. McDougal said he doesn’t know without doing research if Costco’s policy will stand up to the law, because it’s a club that requires membership, which comes with rules.

But McDougal said, in his view, stores open to the general public without memberships couldn't legally stop every shopper.

“If Fred Meyer was stopping everyone, I’d say ‘Stop it right now. You can’t do that,’” McDougal said.

Want to take part in the discussion? Take the poll. Comment below. Or visit the original story and chime in.

-- Aimee Green