Retail fraud charges in Michigan: what each degree actually means.
Michigan splits retail fraud into three degrees based on the value of the merchandise. Third degree covers property under $200 and carries up to 93 days in jail. Second degree covers $200 to $1,000 and carries up to a year. First degree covers $1,000 or more and is a felony with up to 5 years in prison. The degree can also climb if you have a prior retail fraud conviction.
What counts as retail fraud in Michigan?
Retail fraud is Michigan's legal name for shoplifting, but the statutes reach further than slipping something into a pocket and walking out. Under MCL 750.356c and MCL 750.356d, you can be charged for any of three things done in a store that's open to the public:
- Taking merchandise with the intent not to pay for it, or to pay less than the marked price.
- Price switching, meaning altering, removing, or swapping a price tag so an item rings up for less than the store is asking.
- Fraudulent returns or exchanges, meaning getting money or store credit back for property the store never actually owed you a refund on.
That last category surprises people. You can be charged with retail fraud without ever leaving the store, and in return cases, without taking anything off a shelf at all. Loss prevention teams document these incidents carefully, and prosecutors in Wayne County file them routinely.
What are the three degrees of retail fraud?
The degree is driven mostly by the dollar value of the merchandise involved. Here's how the three degrees break down:
| Degree | Value involved | Charge level | Maximum penalty |
|---|---|---|---|
| Third degree (MCL 750.356d) | Under $200 | Misdemeanor | 93 days in jail, fine up to $500 or 3 times the value |
| Second degree (MCL 750.356d) | $200 to under $1,000 | Misdemeanor | 1 year in jail, fine up to $2,000 or 3 times the value |
| First degree (MCL 750.356c) | $1,000 or more | Felony | 5 years in prison, fine up to $10,000 or 3 times the value |
For each degree, the fine is the listed dollar amount or 3 times the value of the property, whichever is greater. The jump from second to first degree matters enormously, because it's the line between a misdemeanor and a felony. If you're not sure why that distinction changes everything from jail exposure to background checks, we walk through it in our guide to misdemeanors versus felonies in Michigan.
Prosecutors calculate value using the retail price of the merchandise, and they can aggregate items from the same scheme. A cart of items that individually cost little can still add up to a second or even first degree charge.
Do prior convictions raise the degree?
Yes, and this catches a lot of people off guard. A prior retail fraud conviction bumps the next charge up a level:
- A theft under $200 that would normally be third degree becomes second degree if you have a prior retail fraud conviction.
- A theft between $200 and $1,000 that would normally be second degree becomes first degree, a felony, if you have a prior.
So a person with an old shoplifting case from years ago can walk out of a store with a $40 item and face a charge that carries a year in jail. This enhancement rule is one of the strongest arguments for resolving a first case in a way that doesn't leave a conviction behind.
What about the civil demand letter from the store's lawyer?
A few weeks after the incident, many people get a letter from a law firm representing the retailer demanding a few hundred dollars. This is called a civil demand, and it's separate from the criminal case. Michigan law, MCL 600.2953, lets a merchant recover the full retail price of merchandise that wasn't recovered in salable condition, plus civil damages of 10 times the retail price of the property, with that civil damages amount capped between $50 and $200.
Two things to understand before you do anything with that letter:
- Paying it does not resolve the criminal charge. The civil demand and the prosecution are independent. People sometimes pay quickly thinking it makes the case go away. It doesn't.
- You're not required to respond on their timeline. The letter is a demand, not a judgment. Anything you write back, including an apology, can potentially be used against you in the criminal case.
Our advice is simple: don't pay, don't respond, and don't call the number on the letter until you've talked to your own lawyer. We can usually tell you within one conversation how the demand fits into your overall situation.
Are there options for first time offenders?
Usually, yes, and they're worth pursuing aggressively because the goal in most retail fraud cases isn't just avoiding jail. It's avoiding a theft conviction on your record. Depending on your age and history, the options can include:
- The Holmes Youthful Trainee Act. If the offense happened between your 18th and 26th birthdays, HYTA can resolve the case with no public conviction at all. We explain how it works in our full guide to HYTA.
- Delayed sentencing. Michigan judges can delay sentencing while you complete conditions, which often opens the door to a reduced charge or dismissal.
- Local diversion programs. Many district courts in Wayne County run first offender programs that end in dismissal after classes, community service, and a clean period of behavior.
None of these happen automatically. Eligibility rules differ, some require the prosecutor's agreement, and the way the case is charged in the first place affects what's available. That's why getting counsel involved early matters more in retail fraud cases than people expect.
Why is a shoplifting case worth defending?
Because retail fraud is a theft crime, and theft crimes follow you differently than almost any other misdemeanor. Employers read a theft conviction as a statement about honesty. Background checks for jobs in healthcare, banking, retail management, education, and government routinely screen for it. Landlords see it. Professional licensing boards ask about it. A 93 day misdemeanor can quietly cost far more over ten years than the item involved ever did.
It's also a charge with real defenses. Intent is an element the prosecutor has to prove, and absentminded mistakes happen: an item left in a cart's bottom rack, a distracted self checkout scan, a return made in genuine good faith. Loss prevention employees make mistakes too, and video doesn't always show what the report claims. An experienced criminal defense attorney can test the evidence, negotiate the charge down, or position you for one of the dismissal options above.
And if you already have a retail fraud conviction from years past, it may not have to stay on your record. Michigan's Clean Slate laws expanded who can clear old convictions, and we cover the process in our guide to expungement under the Clean Slate Act.
We're a Dearborn firm, and we handle retail fraud cases in the district courts where these charges actually get filed, including the courts serving Dearborn, Wyandotte, and the surrounding Downriver communities. We know which programs each court offers and what local prosecutors will realistically agree to. If you or your kid is facing a retail fraud charge, call us at (313) 274-6200. The consultation is free.
Quick answers
Is retail fraud a felony in Michigan?
It can be. First degree retail fraud, which covers merchandise worth $1,000 or more, or a theft of $200 to $1,000 with a prior retail fraud conviction, is a felony punishable by up to 5 years in prison under MCL 750.356c. Second and third degree retail fraud are misdemeanors under MCL 750.356d.
Do I have to pay a civil demand letter from the store's lawyer?
Not automatically, and paying it does not make the criminal case go away. Under MCL 600.2953 a merchant can seek the retail price of unrecovered merchandise plus civil damages of 10 times the retail price, capped between $50 and $200. Talk to a lawyer before you respond or pay anything.
Can a first retail fraud charge be kept off my record?
Often, yes. Depending on your age and history, options like the Holmes Youthful Trainee Act, a delayed sentence, or a local diversion program can end with the charge dismissed and no public conviction. Eligibility varies by court and by case, so have a lawyer review your situation early.
Related reading
- HYTA: Michigan's Second Chance Law for Young Adults
- Michigan Expungement and the Clean Slate Act
- Criminal Defense at D.C. Law