Law enforcement should be left to law enforcement. Either you call the cops or you let them go, extra-judicial settlement is problematic for quite a few reasons, the most important of which is that you're determining guilt and setting an arbitrary price all in one go using the 'or cops' as a way to threaten a suspect.
And it's a problem especially since a large chunk of the money does not go to the retailer but to some other party who has a large incentive to get you to settle.
But this deal does not involve determining guilt either (in any legal sense), they are merely signing an obligation to take a course.
You can bet that if the people then struggle with paying for the course, CEC will threaten to present this admission to the cops.
The article also states that:
If someone started to take the course and paid for it—if they change their mind and they want to get their day in court, we’ll refund their money and put the case back in the retailer’s hands. They’ve got multiple opportunities to step back from this.
So I'm not sure how the two of those square.
I'm not vouching for this sort of practice (and it's probably been abused) - but it may in fact be preferable for a dumb young teenager/adult, to take an online course, than to have theft on their criminal record (that would probably make it pretty hard to find employment, even at a crappy job).
If you refuse to pay after the fact, and decide you should have rights after all, then the retailer can send the police your signed admission of guilt - at which point due process disappears. That admission represents credible blackmail material to get you to pay.
"Sign this sheet of paper that says you murdered someone and pay me $50,000, or I will accuse you of murder publicly"
Making this proposition is very likely a criminal offense independently of whether it would be a false police report or not.
Although it's probably more likely that you can't sign away or admit guilt without correct legal procedure, and such documents are simply not worth anything (i.e. like user-agreements which supposedly say you waive your rights to legal action). Would be interesting to see someone with a legal background comment on this.
> Retailers can collect a cut of CEC’s $320 fee each time they present an offender with the option of signing up for the program—a form of restitution, said Caffaro, which usually ends up being around $40 per case.
Because nearly no one would pay and they'd alienate regular customers.
We have long abolished the idea that law enforcement should only be carried out by government agents. Most western countries have more private security employees than police officers.
If this idea was ever seriously implemented in the first place. For nearly the entire history of Europe law was predominantly private.
Why not, let's try price elasticity on this and maximize the take.
Imagine you went shopping (not shop-lifting) and a store employee approached you with a "pay $300 or we will call the cops" proposition? What would be your response? Substantially different than "knock yourself out"?
Of course, I would then denounce them to everyone I could, from the cops to regulators to newspapers, but if I was actually a member of those groups, how would you rate the probability that I would be believed?