Sticky-fingered Sam goes to the local shoe store to purchase a new pair of shoes. The last pair of shoes in her size are priced at $150. Deciding that these are too expensive, Sam removes a sticker from a box of shoes on the clearance shelf priced at $30 and places the sticker on the box of the shoes she wants. Sam takes the $150 shoes to the register with the $30 sticker on them, pays the lower price, and leaves. Has Sam committed a larceny? Has Sam committed the crime of larceny from a merchant under G.S. 14-72.11?
Sam’s acts do constitute larceny and are similar to the acts of the defendant in State vs. Hill, 291 N.C. App. 633 (2023). However, the North Carolina Court of Appeals held that a defendant’s use of a price label sticker from another product did not represent larceny by product code (a form of larceny from a merchant) under G.S. 14-72.11(3). The court acknowledged that there is another larceny statute that would have been more appropriate for this circumstance. In response to Hill, the North Carolina General Assembly has amended the laws related to larceny and retail theft to bring more clarity about its scope. This post discusses the holding in State v. Hill and examines the newly amended laws applicable to these specific types of larceny.
Facts and holding of State v. Hill. In this case, a Walmart manager saw the defendant putting a sticker with a product code for a Tupperware container over the product code on a Cricut crafting machine box. At the self-checkout, the defendant scanned the sticker, which resulted in a $7.98 charge for the $227 Cricut machine. The defendant was charged with larceny by product code pursuant to G.S. 14-72.11(3). Under this statute, it is a Class H felony to commit larceny against a merchant “[b]y affixing a product code created for the purpose of fraudulently obtaining goods or merchandise from a merchant at less than its actual sale price.”
The Court of Appeals considered the charge, specifically looking to the meaning of “created” in the provision. Explaining that this was a matter of first impression, the court looked to the plain meaning of “create,” as well as its use in context of the section, to weigh whether this language contemplated repurposing an existing product code as defendant had done here. The court agreed with defendant that the charge was not applicable, concluding:
Because the larceny [statutes] are explicit about the conduct which constitutes each level of offense, we conclude the word “created” in Section 14-72.11(3) applies to the specific scenario where (1) an actor (the defendant or another person) created a false product code “for the purpose of fraudulently obtaining goods or merchandise at a reduced price” and (2) the defendant affixed it to the merchandise. Section 14-72.11(3) does not apply where a defendant transfers a legitimate product code printed on the price tag from one product to another ….
The court concluded that the trial court erred by denying the defendant’s motion to dismiss the charge of larceny from a merchant by product code fraud under G.S. 14-72.11(3) and vacated the defendant’s conviction for this charge.
Statutory amendments. In June, the North Carolina General Assembly amended the larceny laws to reflect the holding in State v. Hill. Effective for offenses committed on or after December 1, 2024, S.L. 2024-22 (HB 495) removes existing subsection (3) from G.S. 14-72.11 and creates three new subsections defining ways by which a person can commit larceny from a merchant.
Fraudulently creating a price tag for an item. Under the first new subsection, a person can commit the offense “by fraudulently creating a product code or any other price mechanism utilized by a merchant to determine the price of a good with the intent to fraudulently obtain goods or merchandise from a merchant at less than its actual sale price.” While this provision appears to be similar to the one to be deleted, it focuses solely on the creation of the fraudulent price tag. This provision would punish the person who creates the price tag, as opposed to punishing the person who affixes the fraudulent price tag. A person who creates a price tag at home for the purpose of attaching it to an item in the store and purchasing the item at a lower price would be punished under this provision for the creation of that tag, regardless of who affixed the price tag to the item.
Fraudulently affixing a price tag to an item. Another way a person can commit larceny against a merchant is “by affixing a product code or any other price mechanism utilized by a merchant to determine the price of a good when the product code or other price mechanism was created by someone other than the merchant or manufacturer of the goods or merchandise for the purpose of fraudulently obtaining goods or merchandise from a merchant at less than its actual sale price.” Where creation and affixation were previously wed, this new provision punishes only the person who affixes the price tag to the item. Note that under this provision, the price tag must have been created by someone other than the merchant or manufacturer of the goods. Therefore, similar to the issue in Hill, a person cannot be punished under this provision for simply transferring an existing price tag from one product to another.
Presenting an item for purchase with a fraudulent price tag. The last subsection punishes a person who commits the offense “by presenting a good for purchase for the purpose of fraudulently obtaining goods or merchandise from a merchant at less than its actual sales price knowing that a product code or any other price mechanism utilized by a merchant to determine the price of the good has been replaced by a product code or other price mechanism created by someone other than the merchant or manufacturer.” This provision contemplates an act beyond the creation or affixation of the price tag. It punishes the person who makes it to the register to purchase the item at the lower price, knowing that the fraudulently created price tag was affixed to the item.
Units of prosecution. While each of these new provisions could be accomplished by three different actors for a single transaction, it may often be the case that only one person acted in the creation, the affixation, and the presentation. It is not clear whether a single person can be properly charged with three counts of larceny from a merchant for engaging in each of the three acts. There is an argument that because each of the acts was criminalized in a separate provision, each act should support its own charge. Even if the goal in creating the separate provisions was to account for more than one actor, each actor could have been held to account under previous law by way of aiding and abetting liability.
On the other hand, the rule of lenity requires “doubt [to] be resolved against turning a single transaction into multiple offenses.” State v. Smith, 323 N.C. 439, 442 (1988). In other words, “the presumption is against multiple punishments in the absence of a contrary legislative intent.” State v. Boykin, 78 N.C. App. 572, 577 (1985). Taking this approach, a person who engages in all three acts to obtain an item would be charged with only one count for the entire transaction, provided that there was only one fraudulently created, affixed, and presented price tag.
Transferring an existing price tag. The State isn’t without recourse against those who engage in the same kind of price tag repurposing done by Sticky-fingered Sam and Defendant Hill. In the opinion, the court noted that G.S. 14-72.1(d) seemed to more appropriately reflect the act of transferring a legitimate product code printed on the price tag from one product to another. Under this provision, it is unlawful for a person to transfer a price tag between items in a store so that a higher priced item is labeled with a lower price tag. This act is a Class 3 misdemeanor for the first offense, which is a substantial downward departure from the Class H felony offenses covered above.
However, effective for offenses committed on or after December 1, 2024, S.L. 2024-22 also creates a felony version of this offense. Under new G.S. 14-72.1(d2), it will be a Class H felony for a person to switch a price tag so that there was more than a $200 difference between the actual price of the item and the price listed on the new price tag. Mere possession of the item or the production by shoppers of improperly priced merchandise for checkout cannot constitute prima facie evidence of guilt for this offense.
It will be interesting to see how these changes play out in practice. Our larceny laws are already complicated, as there are several versions. These changes, while responsive to the case law, may further complicate the area.
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