Funny Business with Jane Wells

Has California's plastic bag ban backfired?

Bag ban leads to theft

Several large cities in California, including Los Angeles and San Francisco, have banned the use of plastic bags in grocery stores, and the legislature there is considering a ban for the entire state.

Plastic bags are bad for the environment, they choke wildlife, and many end up in landfills. To placate grocers, they're usually allowed to charge 10-cents for every paper bag a consumer needs, money the stores get to keep.

However, the effort to go green is costing some stores quite a bit of green. "It is increasing shoplifting," said Mark Arabo, president and CEO of the Neighborhood Market Association, a group of 2,400 small markets in the West. "We've received hundreds of phone calls from our members saying that once these plastic bag bans have been enacted, shoplifting has increased in our markets."

"What's happening is they're putting stuff in there," said Arabo, referring to shoppers placing items in reusable bags. "Frozen food items, health and beauty items, and when they get to the cashier, they are actually arguing with them and saying, 'I actually brought this in with me,' and the store has to check the (surveillance) tape, and it's just a bunch of red tape."

"I've noticed since the plastic bag ban, it's made it a bit more challenging to spot someone who may be trying to steal some of these items," Long Beach Police Sgt. Robert Woods told the Long Beach Press-Telegram.

The Los Angeles Daily News reports the manager of one Rite Aid claims his weekly theft rate has at least doubled to almost $1,000, blaming the lack of plastic bags. "Unless employees physically see someone putting something in their bag and then not paying for it, they are not allowed to search them or confront them."

A pedestrian carries a single-use plastic bag while shopping in the Chinatown section of Los Angeles, June 24, 2014.
Kevork Djansezian | Bloomberg | Getty Images

A survey of Seattle grocery store owners by the state of Washington found that more than one in five believe the plastic bag ban has created at least a small shoplifting problem.

Meanwhile, the plastic bag manufacturing industry is fighting a proposed law in California that would make the ban statewide, claiming it will kill 2,000 jobs. It even claims reusable bags are more harmful to the environment, as they are made from thicker plastic.

However, there is no hard evidence so far—only anecdotal—connecting the use of reusable bags to higher theft rates, also called "shrink."

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The National Retail Federation told CNBC it has not noticed a connection, nor has the California Retail Association. "We haven't heard from any members that there is an increase in shoplifting after implementation of a ban," said Bill Dombrowski, the CRA's president and CEO.

But Mark Arabo said his members tell him it's happening. "Right now we're actually putting together a study to see exactly how much it's costing," he said.

"We know that shrink has increased."

—By CNBC's Jane Wells; Follow her on Twitter: @janewells