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SJC-11965

COMMONWEALTH vs. KIM HENRY.

Essex. February 10, 2016. - August 8, 2016.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & 

Hines, JJ.

Restitution. Practice, Criminal, Probation, Restitution. 

Supreme Judicial Court, Superintendence of inferior courts.

Complaint received and sworn to in the Salem Division of 

the District Court Department on November 7, 2013. 

A proceeding to determine restitution was had before 

Michael C. Lauranzano, J.

The Supreme Judicial Court granted an application for 

direct appellate review. 

Rebecca Kiley, Committee for Public Counsel Services, for 

the defendant.

Kenneth E. Steinfield, Assistant District Attorney, for the 

Commonwealth.

Matthew R. Segal & Jessie J. Rossman, for the American 

Civil Liberties Union Foundation of Massachusetts, amicus

curiae, submitted a brief.
2

GANTS, C.J. This case presents two issues on appeal: 

first, whether a defendant's ability to pay should be considered 

by a judge in deciding whether to order restitution as a 

condition of probation and in deciding the amount of any such

restitution; and second, where goods are stolen from a retail 

store, whether the amount of the victim's actual economic loss 

for purposes of restitution is the replacement value or the 

retail sales value of the stolen goods. As to the first issue, 

we hold that in determining whether to impose restitution and 

the amount of any such restitution, a judge must consider a 

defendant's ability to pay, and may not impose a longer period 

of probation or extend the length of probation because of a 

defendant's limited ability to pay restitution. As to the 

second issue, we hold that, in cases of retail theft, the amount 

of actual economic loss for purposes of restitution is the 

replacement value of the stolen goods unless the Commonwealth 

proves by a preponderance of the evidence that the stolen goods 

would otherwise have been sold, in which case the retail sales 

value is the better measure of actual loss.1 

Background. The defendant was employed as a cashier at a 

Walmart department store in Salem. A Walmart video camera 

captured the defendant "free-bagging" items; that is, with

 

1 We acknowledge the amicus brief submitted by the American 

Civil Liberties Union of Massachusetts.
3

certain customers, she placed some store items into bags without 

scanning the items at the cash register, so that these customers 

received these items without paying for them. As a result, in

November, 2013, a complaint issued in the Salem Division of the 

District Court Department alleging that the defendant stole the 

property of Walmart having a value of more than $250 pursuant to 

a single larcenous scheme on various dates between July 20 and 

September 4, 2013, in violation of G. L. c. 266, § 30 (1). In 

April, 2014, the defendant admitted to facts sufficient to 

warrant a finding of guilty, and the judge continued her case 

without a finding for eighteen months, with restitution to be 

determined at a later date.

2 The defendant was placed on 

administrative probation for eighteen months, with a special 

condition that she have no contact with Walmart. 

At a restitution hearing in September, 2014, the defendant 

stipulated that the loss to Walmart was $5,256.10, and a judge 

(who was not the plea judge) ordered that restitution in that 

amount be paid. However, in October, 2014, the defendant filed 

a motion to revise and revoke the order of restitution, which 

 

2 The defendant recommended that her case be continued 

without a finding for eighteen months. The prosecutor 

recommended that a guilty finding be entered, that she be placed 

on probation for a period of two years, and that she be ordered 

as a condition of probation to pay Walmart $5,256.10 in 

restitution. The defendant accepted the judge's disposition 

even though it exceeded her recommendation. See G. L. c. 278, 

§ 18.
4

was allowed, and a new restitution hearing was held in November,

2014, before yet another judge. At this evidentiary hearing, 

the Commonwealth offered testimony from Ronald Capistran, the 

loss protection manager at the Salem Walmart, who calculated 

that the retail sales price of the items stolen totaled

$5,256.10. He estimated that the "markup" on most of the items 

sold in the store was "somewhere between [seven per cent] and 

probably [fifteen per cent]" but, in a rare case, "it could be 

[fifty]" per cent. The defendant testified that she was 

"discharged" from Walmart in September, 2013, after working 

there as a cashier for nearly twelve years. She received 

unemployment benefits for approximately three months following 

her termination, but was found ineligible for such benefits 

after a department of unemployment assistance hearing and was 

ordered to reimburse the Commonwealth for the benefits she had 

received. At the time of the restitution hearing, she had been 

unable to find employment and had no income or government 

assistance of any kind. She had been evicted from her apartment 

and was staying with someone, but not paying rent. She 

testified that she "free-bagged" the items only for friends, and 

received only fifty dollars once for having done so. 

The prosecutor argued that restitution should be based on 

the retail sales value of the items stolen because the theft was 

at the point of sale, and Walmart was deprived of the value of 
5

the goods that should have been paid by the customer. The 

prosecutor also argued that the amount of restitution should not 

be reduced based on the defendant's inability to pay because the 

defendant "by her actions created her inability to pay in that 

she was fired from a job by stealing." The defendant argued 

that the actual loss to Walmart is the replacement cost of the 

stolen goods, not their retail price, because Walmart is not 

entitled to recover in restitution for its lost profits. The 

defendant also argued that she should not be ordered to pay

restitution because she was financially unable to pay, noting 

that, if ordered to pay "any figure remotely near" the amount of 

restitution sought, she will be in violation of her probation 

because of her inability to pay. The judge declared that the 

loss is measured by the retail loss and ordered that restitution 

in the amount of $5,256 be paid during the period of probation 

at a rate to be determined by the probation department.3 The 

defendant timely appealed from this order, and we allowed the 

defendant's application for direct appellate review.

Discussion. A judge may order a defendant to pay 

restitution to the victim as a condition of probation provided 

that the "[r]estitution is limited to economic losses caused by 

the defendant's conduct and documented by the victim." 

 

3 The judge waived the probation supervision fee and the 

indigent counsel fee.
6

Commonwealth v. McIntyre, 436 Mass. 829, 833-834 (2002). See 

Commonwealth v. Nawn, 394 Mass. 1, 6 (1985) ("There is no 

question that restitution is an appropriate consideration in a 

criminal sentencing"). "The procedure used to determine the 

amount of restitution or reparation must be reasonable and 

fair." Id. at 6-7. The prosecution should disclose prior to 

the hearing the amount of restitution it seeks. Id. at 7, 

citing People v. Gallagher, 55 Mich. App. 613, 620 (1974). 

Where the defendant does not stipulate to the amount, the judge 

should conduct an evidentiary hearing at which "the Commonwealth 

bears the burden of proving by a preponderance of the evidence 

the amount of the victim's losses." Nawn, 394 Mass. at 7-8. At 

such a hearing, the victim may testify regarding the amount of 

the loss, and the defendant may cross-examine the victim, with 

such cross-examination limited to the issue of restitution. Id. 

at 8. The defendant may rebut the victim's estimate of the 

amount of loss with expert testimony or other evidence. Id. at 

7. 

1. Ability to pay. In deciding whether to order 

restitution and, if so ordered, the amount, the judge should 

"consider whether the defendant is financially able to pay the 

amount ordered." Nawn, 394 Mass. at 7, citing Model Sentencing 

and Corrections Act § 3-601(d), 10 U.L.A. 322 (Supp. 1984), and 

ABA Standards Relating to Probation § 3.2(d) (1970). "The 
7

amount of restitution is not merely the measure of the value of 

the goods and money stolen from the victim by the defendant; . . 

. the judge must also decide the amount that the defendant is 

able to pay and how such payment is to be made." Nawn, supra at 

8-9. 

In practice, this means that, at the close of the 

evidentiary hearing, the judge must make two findings in 

deciding whether to order restitution as a condition of 

probation and, where ordered, the amount of restitution to be 

paid during the period of probation. First, the judge must 

determine the amount of the victim's actual economic loss 

causally connected to the defendant's crime. See McIntyre, 436 

Mass. at 834. The Commonwealth bears the burden of proof as to 

this finding. See Nawn, 394 Mass. at 7-8. The order of 

restitution may not exceed this amount. See Commonwealth v. 

Rotonda, 434 Mass. 211, 221 (2001). Second, the judge must

determine the amount the defendant is able to pay. See Nawn,

supra at 8-9. Where a defendant claims that he or she is unable 

to pay the full amount of the victim's economic loss, the 

defendant bears the burden of proving an inability to pay. See 

Commonwealth v. Porter, 462 Mass. 724, 732-733 (2012) (defendant 

bears burden of persuasion regarding indigency, in part because

"[a] criminal defendant is the party in possession of all 

material facts regarding her own wealth and is asserting a 
8

negative"). Cf. United States v. Fuentes, 107 F.3d 1515, 1532 

(11th Cir. 1997) (regarding restitution, "the defendant must 

establish her financial resources and needs by a preponderance 

of the evidence"). 

We require a judge to consider the defendant's ability to 

pay when setting the restitution amount because a judge may 

order restitution in a criminal case only as a condition of 

probation, and therefore the collection of restitution is 

enforced by the threat or imposition of a criminal sanction for 

violation of a probation condition. See Commonwealth v. Denehy, 

466 Mass. 723, 737 (2014); Commonwealth v. Goodwin, 458 Mass. 

11, 15 (2010). Cf. G. L. c. 258B, § 3 (u) (victim shall be 

informed of "right to pursue a civil action for damages relating 

to the crime, regardless of whether the court has ordered the 

defendant to make restitution to the victim"). A defendant can 

be found in violation of a probationary condition only where the 

violation was wilful, and the failure to make a restitution 

payment that the probationer is unable to pay is not a wilful 

violation of probation. See Commonwealth v. Canadyan, 458 Mass. 

574, 579 (2010) ("where there was no evidence of wilful 

noncompliance, a finding of violation of the condition of 

wearing an operable [global positioning system (GPS)] monitoring 

device was unwarranted, and is akin to punishing the defendant 

for being homeless"); Commonwealth v. Gomes, 407 Mass. 206, 212-
9

213 (1990) (imposition of default costs permitted only when 

default is wilful). Cf. Bearden v. Georgia, 461 U.S. 660, 669 

n.10 (1983) ("Numerous decisions by state and federal courts 

have recognized that basic fairness forbids the revocation of 

probation when the probationer is without fault in his failure 

to pay the fine" [footnote omitted]). 

To allow a judge to impose a restitution amount that the 

defendant cannot afford to pay simply dooms the defendant to 

noncompliance. Such noncompliance may trigger a notice of 

probation violation even though a probationer cannot be found in 

violation for failing to pay a restitution amount that the 

probationer cannot reasonably afford to pay. See Canadyan, 

supra; Gomes, supra. Not only would a notice of violation under 

such circumstances waste the time of the court, but it imposes 

upon the blameless probationer the risk of an arrest on a 

probation warrant, of payment of a warrant fee, of being held in 

custody pending a hearing, and of probation revocation if the 

judge were to fail to recognize that inability to pay is a 

defense to the alleged violation. See G. L. c. 276, § 87A; Fay

v. Commonwealth, 379 Mass. 498, 504 (1980); Rule 3 of the

District/Municipal Courts Rules for Probation Violation 

Proceedings, Mass. Ann. Laws Court Rules (LexisNexis 2015-2016). 

Burdening a defendant with these risks by imposing 

restitution that the defendant will be unable to pay violates
10

the fundamental principle that a criminal defendant should not 

face additional punishment solely because of his or her poverty.

See Canadyan, supra; Gomes, supra at 212-213. Cf. Bearden, 461 

U.S. at 668-669 ("if the probationer has made all reasonable 

efforts to pay the fine or restitution, and yet cannot do so 

through no fault of his own, it is fundamentally unfair to 

revoke probation automatically without considering whether 

adequate alternative methods of punishing the defendant are 

available" [footnote omitted]). To avoid this unlawful result, 

we require the judge to consider the defendant's ability to pay 

when initially setting the restitution amount.4 See State v. 

Blank, 570 N.W.2d 924, 927 (Iowa 1997) ("A court's assessment of 

a defendant's reasonable ability to pay is a constitutional 

prerequisite for a criminal restitution order"). Cf. Fuentes, 

107 F.3d at 1529 ("Although a sentencing court may order 

restitution even if the defendant is indigent at the time of 

sentencing, . . . it may not order restitution in an amount that 

the defendant cannot repay").

 

4 Where, because of the defendant's limited ability to pay, 

the restitution amount is less than the victim's total economic 

loss, nothing bars the victim from filing a civil action and 

obtaining a judgment against the defendant for the full amount 

of the loss. The victim may seek to collect on this judgment 

through a civil execution. See Commonwealth v. Klein, 400 Mass. 

309, 311 (1987); Commonwealth v. Malick, 86 Mass. App. Ct. 174, 

178 (2014); Fidelity Mgt. & Research Co. v. Ostrander, 40 Mass. 

App. Ct. 195, 199 (1996). See also G. L. c. 258B, § 3 (u).
11

A judge may not ignore a defendant's ability to pay in 

determining restitution under the rationale that, if the 

defendant were to violate the probation condition of payment of 

restitution because of an inability to pay, the judge would not 

revoke probation but would instead extend the period of 

probation to allow the defendant more time to pay. Probation 

"serves as a disposition of and punishment for a crime; it is 

not a civil program or sanction" (emphasis in original). 

Commonwealth v. Cory, 454 Mass. 559, 566 (2009). It punishes a 

defendant by ordering the defendant to comply with conditions 

deemed appropriate by the sentencing judge and, "[i]f a 

defendant violates one or more conditions of probation, a judge 

may revoke his probation and sentence him to a term of 

imprisonment for his underlying conviction, or return the 

defendant to probation, with new or revised conditions." 

Commonwealth v. Goodwin, 458 Mass. 11, 15 (2010).

An extension of the period of probation punishes a 

defendant in two ways. First, it extends the restrictions on a 

defendant's liberty arising from probation. Under the general 

conditions of probation, a probationer may be required to report 

periodically to his or her probation officer, may not leave the 

State without permission, and must pay a monthly probation fee 

or, in lieu of payment, provide community service, unless 

payment is waived by the judge because of the order of 
12

restitution. See G. L. c. 276, § 87A; Commentary to Rules 2 and 

4 of the District/Municipal Courts Rules for Probation Violation 

Proceedings, Mass. Ann. Laws Court Rules, at 77-78, 86 

(LexisNexis 2015-2016). A probation officer may search the home 

of a probationer by obtaining a warrant supported only by 

reasonable suspicion rather than probable cause. See 

Commonwealth v. LaFrance, 402 Mass. 789, 792-793 (1988). 

Special conditions, where ordered, may impose further 

restrictions and obligations, such as drug and alcohol testing 

and evaluation, participation in treatment programs, GPS

monitoring, and home confinement curfews. See G. L. c. 276, 

§ 87A. 

Second, where a probationary period is extended, and a 

defendant commits a new crime during the extended period, the 

defendant, in addition to being convicted and sentenced for the 

new crime, can have his or her probation revoked and be 

sentenced anew on the conviction for which he or she was placed 

on probation. See Goodwin, 458 Mass. at 17. And probation may 

be revoked for the commission of a new crime based on proof by a 

preponderance of the evidence, so a defendant may be found not 

guilty at trial of committing the new crime where the evidence 

fell short of proof beyond a reasonable doubt but still have his 

or her probation revoked because a judge found it more likely 

than not that he or she committed the new crime. See 
13

Commonwealth v. Hartfield, 474 Mass. 474, 481-483 (2016). Thus, 

extending the length of a probationary period because of a 

probationer's inability to pay subjects the probationer to 

additional punishment solely because of his or her poverty. See 

Canadyan, 458 Mass. at 579; Gomes, 407 Mass. at 212-213. We 

need not reach the question whether an extension of the length 

of probation in such circumstances violates the Massachusetts 

Declaration of Rights, because we invoke our superintendence 

power to declare that a judge may not extend the length of 

probation where a probationer violated an order of restitution 

due solely to an inability to pay. 5,6 

For the same reasons, equal justice means that the length 

of probation supervision imposed at the time of sentence should 

not be affected by the financial means of the defendant or the 

ability of the defendant to pay restitution. See Superior Court 

 

5 A judge remains free to revoke probation or extend the 

term of probation where a probationer violates a condition of 

probation by willfully failing to pay a restitution amount he or 

she had the ability to pay. See Bearden v. Georgia, 461 U.S. 

660, 668 (1983) ("If the probationer has willfully refused to 

pay the fine or restitution when he has the means to pay, the 

State is perfectly justified in using imprisonment as a sanction 

to enforce collection"); .Commonwealth v. Avram A., 83 Mass. 

App. Ct. 208, 212-213 (2013).

6 We acknowledge that extending the length of probation in 

such circumstances has not been recognized to be in violation of 

Federal constitutional law. See Bearden, 461 U.S. at 674 (where 

defendant on probation is unable to pay fine, court may extend 

time for payment).
14

Working Group on Sentencing Best Practices, Criminal Sentencing 

in the Superior Court: Best Practices for Individualized 

Evidence-Based Sentencing, at 15 (Mar. 2016) (Superior Court 

Best Practices for Sentencing) ("An extended period of 

supervision for the purpose of collecting money can be 

particularly troublesome since it necessarily means that greater 

burdens are imposed on poor offenders compared to those with 

economic resources"). To ensure that a defendant does not face 

a longer probationary period because of his or her limited 

means, the ability to pay determination should be made only 

after the judge has determined the appropriate length of the 

probationary period based on the amount of time necessary to 

serve the twin goals of rehabilitating the defendant and 

protecting the public. See Cory, 454 Mass. at 567; Commonwealth

v. Lapointe, 435 Mass. 455, 459 (2011). See also State v. 

Farrell, 207 Mont. 483, 498-499 (1984) (to impose longer 

suspended sentence because of defendant's indigency in order to 

extend time to pay restitution would violate due process and 

fundamental fairness). Cf. Superior Court Best Practices for 

Sentencing, supra ("probationary terms should generally be 

limited in duration, extending only long enough to facilitate a 

period of structured reintegration into the community"). Once 

the judge has determined the appropriate length of the 

probationary period, restitution may be a condition of probation
15

for the length of that period at the maximum monthly amount that 

the defendant is able to pay, provided the total amount does not 

exceed the actual loss. The amount of restitution ordered 

should not exceed this monthly amount multiplied by the months 

of probation, even if that amount is less than the amount of 

financial loss sustained by the victim. The monthly amount must 

be determined by the judge; it cannot be delegated to the 

probation department. But the judge may be aided in that 

determination by the guidance of the probation department.7 

 

7 For example, where a defendant has been found guilty of 

shoplifting and the judge determines that the economic loss to 

the victim is $5,000, the judge might decide that the

defendant's risk of future criminal conduct is most effectively 

diminished by two years of treatment for the defendant's drug 

and mental health problems, and that the defendant should 

therefore be placed on supervised probation for two years, with 

special conditions of drug and mental health treatment. Once 

the judge has decided on this two-year probationary period, the 

judge must then consider the defendant's ability to pay and

determine the amount of restitution that the defendant is able 

to pay. The judge might determine that, for example, the 

defendant has the ability to pay fifty dollars per month for 

each of the twenty-four months. If the defendant successfully 

completes the probation period and meets the required monthly 

payments, the defendant's probation must be terminated, even 

though the defendant paid only $1,200 in restitution; probation 

may not be extended so that the victim may be paid the balance 

of $3,800. The victim may initiate a civil action to recover 

the unpaid balance of economic loss. 

Where a judge determines that there is no reason to impose 

probation other than to collect restitution, a judge may impose 

a brief period of probation (e.g., thirty or sixty days) and 

determine how much of the economic loss the defendant is able to 

pay during that time period, and make that amount of restitution 

a condition of the brief period of probation.
16

The defendant may be required to report to his or her 

probation officer any change in the defendant's ability to pay, 

and the probation officer may petition the judge to modify the 

condition of probation by increasing or decreasing the amount of 

restitution due based on any material change in the 

probationer's financial circumstances. See Goodwin, 458 Mass. 

at 18, quoting Buckley v. Quincy Div. of the Dist. Court Dep't,

395 Mass. 815, 820 (1985) ("A judge may add or modify a 

probation condition that will increase the scope of the original 

probation conditions only where there has been a 'material 

change in the probationer's circumstances since the time that 

the terms of probation were initially imposed,' and where the 

added or modified conditions are not so punitive as to 

significantly increase the severity of the original probation"). 

Cf. United States Sentencing Commission Guidelines Manual

§ 5B1.3(a)(7) (updated Nov. 2015) ("the defendant shall notify 

the court of any material change in the defendant's economic 

circumstances that might affect the defendant's ability to pay 

restitution").

Because we have not previously had the opportunity to 

articulate the legal standard for determining the defendant's 

ability to pay restitution, we do so here for the first time. 

In determining the defendant's ability to pay, the judge must 

consider the financial resources of the defendant, including 
17

income and net assets, and the defendant's financial 

obligations, including the amount necessary to meet minimum 

basic human needs such as food, shelter, and clothing for the 

defendant and his or her dependents. Cf. G. L. c. 261, § 27A 

(a) (defining "[i]ndigent" with respect to civil litigants who 

seek waiver of court fees as person who is "unable to pay the 

fees and costs of the proceeding in which he is involved or is 

unable to do so without depriving himself or his dependents of 

the necessities of life, including food, shelter, and 

clothing"); United States v. McGiffen, 267 F.3d 581, 589 (7th 

Cir. 2001), citing United States v. Embry, 128 F.3d 584, 586 

(7th Cir. 1997) (in determining whether defendant is financially 

able to contribute to cost of appointed counsel, judge must find 

"whether requiring the contribution would impose an extreme 

hardship on the defendant, whether it would interfere with his 

obligations to his family, and whether there were third parties 

with valid claims to the funds"); Museitef v. United States, 131 

F.3d 714, 716 (8th Cir. 1997) (test of inability to pay costs of 

appointed counsel "is whether repayment would cause such 

financial hardship as to make it impractical or unjust . . . .

The ability to pay must be evaluated in light of the liquidity 

of the individual's finances, his personal and familial needs, 

or changes in his financial circumstances"); Model Penal Code: 

Sentencing § 6.04(2) (Proposed Official Draft 2012) ("The total 
18

severity of economic sanctions imposed on an offender may never 

exceed the offender's ability to pay while retaining sufficient 

means for reasonable living expenses and existing family 

obligations").

The payment of restitution, like any court-imposed fee, 

should not cause a defendant substantial financial hardship.

See People v. Jackson, 483 Mich. 271, 275 (2009) (in determining 

defendant's ability to pay, judge must consider "whether the 

defendant remains indigent and whether repayment would cause 

manifest hardship"). Cf. S.J.C. Rule 3:10, § 10 (a), 475 

Mass. (2016) ("The indigent counsel fee shall be waived 

where a judge, after the indigency verification process, 

determines that the party is unable without substantial 

financial hardship to pay the indigent counsel fee within 180 

days"). Restitution payments that would deprive the defendant 

or his or her dependents of minimum basic human needs would 

cause substantial financial hardship. Where a defendant has 

been found indigent by the court for purposes of the appointment 

of counsel, a judge should consider carefully whether 

restitution can be ordered without causing substantial financial 

hardship. 

A judge may also consider a defendant's ability to earn 

based on "the defendant's employment history and financial 

prospects," Nawn, 394 Mass. at 9, but a judge may attribute 
19

potential income to the defendant only after specifically 

finding that the defendant is earning less than he or she could 

through reasonable effort. Cf. Child Support Guidelines (Aug.

1, 2013) (allowing attribution of potential income "[i]f the 

Court makes a determination that either party is earning less 

than he or she could through reasonable effort").

2. Order of restitution. We now turn to the order of 

restitution in this case. The judge here ordered restitution in 

the amount of the "retail loss" -- $5,256 -- even though the 

judge appeared to recognize that the defendant could not afford 

to pay that amount during the remaining period of her probation.8

The judge did not set a monthly amount for the defendant to pay, 

but instead directed that the probation department set a payment 

schedule. It was error for the judge to order restitution based 

only on the amount of loss, without considering whether the 

defendant was financially able to pay that amount during the 

remaining period of her probation. It was also error for the 

 

8 When the restitution hearing was conducted, the defendant 

had only approximately eleven months remaining on her eighteenmonth probation term. The judge acknowledged that "you can't 

get blood out of a stone" and declared it "a sad case." He said 

that he did not know whether "she can get a job somewhere at 

Dunkin' Donuts and pay it off that way." He added, "I'm not 

sitting here feeling great about this, believe me. I feel 

terrible. . . . [B]ut a lot of that's on her. . . . [I}t's 

tough. I feel bad for her." 
20

judge to delegate to the probation department the responsibility 

of establishing a payment schedule. 

The consequence of these errors demonstrates why it is so 

important that the ability to pay be considered in setting the 

amount of restitution. Although the record does not reveal what 

payment schedule was established by the probation department, a 

notice of violation issued on May 11, 2015, for the defendant's

failure to pay the required amount,

9 and a warrant issued for her 

arrest when she failed to appear at the probation violation 

hearing on May 22. The warrant was recalled on June 4, and she 

stipulated to a violation of her probation at a hearing on July

15, where the judge restored her to the same terms and 

conditions of probation, but ordered her to make restitution 

payments of thirty dollars per month. Although the defendant 

made the required monthly payments, on October 28, 2015, the day 

her probation was set to expire, the probation department issued 

a second notice of violation for her failure to pay the balance 

of her restitution, which the probation department calculated as 

$5,176.10 The probation hearing on that notice of violation has 

 

9 The record on appeal reflects that the defendant made only 

two payments of five dollars for restitution. 

10 The Commonwealth correctly noted that this amount is in 

error, and that the amount of restitution due on that date was 

actually $5,126.
21

been continued in light of this pending appeal.11 If the 

defendant had not been poor, she could have afforded to pay the 

restitution in full before October 28, 2015, and would no longer 

have been subject after that date to the conditions of probation 

or the risk that a new crime might result in her being 

resentenced on her larceny from Walmart. It was only because of 

her poverty that she was subject to the prolonged punishment of 

probation. 

3. Calculation of amount of economic loss. The defendant 

claims that the judge erred, not only in failing to consider her 

ability to pay, but also in calculating the amount of 

restitution as the retail price of the items stolen. We earlier 

noted that the payment of restitution "is limited to economic 

losses caused by the defendant's conduct and documented by the 

victim." McIntyre, 436 Mass. at 834. Because the purpose of 

restitution is to reimburse the victim "for any economic loss 

caused by the defendant's actions," Rotonda, 434 Mass. at 221, 

the amount of restitution may not exceed the victim's actual 

loss. See McIntyre, supra. See also United States v. Ferdman, 

779 F.3d 1129, 1132 (10th Cir. 2015), quoting United States v. 

James, 564 F.3d 1237, 1243 (10th Cir. 2009) ("a district court 

may not order restitution in an amount that exceeds the actual 

 

11 The record reflects that the defendant continued to make 

monthly restitution payments of thirty dollars at least through 

December, 2015.
22

loss caused by the defendant's conduct, which would amount to an 

illegal sentence constituting plain error"); United States v. 

Boccagna, 450 F.3d 107, 119 (2d Cir. 2006) ("Criminal 

restitution . . . is not concerned with a victim's disappointed 

expectations but only with [its] actual loss").

Where items are stolen from a retail store, the actual loss 

to the victim is the replacement value of the items, that is, 

their wholesale price, unless the Commonwealth proves by a 

preponderance of the evidence that the items would have been 

sold were they not stolen, in which event the actual loss would 

be the retail price of the items. See Ferdman, 779 F.3d at 1140 

(considering restitution in the context of retail theft and 

holding that, "unless the Government can show the defendant's 

crime depleted the stock of a particular fungible or readily

replaceable good . . . at a time when the victim might otherwise 

have been able to sell that good to a willing buyer, something 

akin to replacement or wholesale cost clearly appears the more 

accurate measure of actual loss"); People v. Chappelone, 183 

Cal. App. 4th 1159, 1178-1179 (2010) (because prosecutor 

presented no evidence that store lost any sales of "massproduced consumer goods" that it "sold in abundance," judge 

erred in awarding restitution in amount of retail value rather 

than replacement cost); State v. Islam, 359 Ore. 796, 807 (2016) 

("[W]hen goods for sale are stolen from a retail seller and not 
23

recovered, . . . the measure of 'economic damages' for the 

seller in a restitution proceeding is the same measure of 

damages that would be available to the seller in a tort action 

for conversion[:] . . . the reasonable market value of the goods 

converted at the time and place of conversion, and the market 

that determines that reasonable value is the market to which the 

seller would resort to replace the stolen goods, generally the 

wholesale market"). But see State v. Smith, 144 Idaho 687, 693 

(Ct. App. 2007) ("the district court did not err in calculating 

the amount of restitution owed for the property stolen . . . by 

using the ascertained retail value of that property").12 

Here, the record reflects that the theft occurred when the 

defendant's friends brought merchandise to her cashier counter, 

and that the defendant scanned some items and "free-bagged" 

others. Although the record is silent as to how the defendant 

chose which items to "free-bag" and whether her friends knew in 

advance that she would "free-bag" particular items (or "freebag" any), the judge reasonably could have inferred from the 

circumstances of the theft that, had the defendant scanned these 

 

12 The concurrence contends that we should declare the 

retail price to be the best measure of actual loss in order to 

avoid placing an "extra burden" on victim retailers who seek 

restitution. Post at . A retailer should be able to 

ascertain the wholesale price of stolen items as easily as the 

retail price, and we do not think it unfair to require the 

victim retailer to show that it is more likely than not that the 

stolen items would have been sold to obtain the higher retail 

price as the measure of restitution.
24

items at her counter, the friends would have paid for them. 

Therefore, because these items were stolen, not from inventory, 

but after they were brought to the cashier's counter, the judge 

reasonably could have found by a preponderance of the evidence 

that these items would have been sold had they not been stolen, 

and that the retail price of the items was the appropriate 

measure of the victim's actual loss. Although it is not plain 

that the judge applied this analysis in calculating the amount 

of restitution as the "retail loss," we conclude that the judge 

did not err in determining that the appropriate amount of the 

victim's actual loss in these circumstances was the aggregate 

retail price of the items stolen. 

Conclusion. Because the judge erred in failing to consider 

the defendant's ability to pay in determining whether to order 

restitution and in determining the amount of restitution, we 

vacate the judge's restitution order and remand the case to the 

District Court for further proceedings consistent with this 

opinion.

So ordered.
CORDY, J. (concurring in part). I agree that in setting an 

amount of restitution especially as a condition of a probation, 

a judge can and should take into account the likely ability of 

the defendant to pay that amount during the term of the 

probation imposed. I disagree with the extra burden the court 

seems prepared to place on victims in establishing their 

economic loss in the context of thefts from a retail enterprise.

It seems to me that the economic loss incurred in that 

context should be presumed to be the retail price of the goods 

stolen, an amount that can be readily ascertained and presented 

to the court at a restitution hearing. See State v. Smith, 144 

Idaho 687, 693 (2007) (where retailer's items stolen, correct 

value for restitution will generally be retail market value of 

items). 

The court suggests, however, that store owner victims are 

only entitled to restitution based on the retail prices of the 

items stolen if they can affirmatively prove by a preponderance 

of the evidence that the specific items would have been sold at 

the retail price if they had not been stolen. This is an 

unnecessary burden in the ordinary case, and the cases cited by 

the court in support of its proposition are far from ordinary. 

For example, in People v. Chappelone, 183 Cal. App. 4th 

1159 (2010), the victim was the Target department store, and the 

principal defendant was an employee responsible for seeing that 
2

damaged items and merchandise withdrawn by manufacturers were 

taken off the sales floor and returned to the appropriate entity 

for credit (or sold for deeply discounted prices to charitable 

organizations). Id. at 1163, 1165-1166. The theft at issue 

involved large quantities of such items awaiting disposal from 

storage. Id. at 1165.

The court set restitution at $278,678, based on the full 

retail price of the goods.1 Id. at 1170. On appeal, the Court 

of Appeal noted that the vast majority of stolen goods had in 

fact been recovered and returned to Target, and that the items, 

even before the theft, were identified by Target as damaged or 

otherwise not saleable at retail in any event.2 Id. at 1173-

1174. In these circumstances, the Court of Appeal reasonably 

held that valuing the merchandise at its full retail price 

highly inflated its actual value, and the recovery of that 

amount would result in a windfall to Target. Id. at 1178-1179. 

While the retail price was a "reasonable starting point the 

value should have been discounted to reflect the true nature of 

the goods." Id. at 1175. Consequently, the restitution order 

was vacated and the matter remanded for a further hearing.

 

1 This amount also included $44,000 in expenses incurred by 

the Target department store during the investigation. People v. 

Chappelone, 183 Cal. App. 4th 1159, 1170 (2010).

2 The merchandise was ultimately donated by Target to 

charities. See id. at 1171.
3

The facts in United States v. Ferdman, 779 F.3d 1129 

(2015), are also exceptional. The items at issue in that case 

were eighty-six cellular telephones that the defendant purchased 

at Sprint stores (fraudulently using various corporate accounts) 

for a "subsidized price" contingent on Sprint service 

agreements. Id. at 1131, 1136. The defendant then resold the 

telephones. Id.

The trial judge ordered restitution in an amount based on 

the full retail price that could have been charged to a customer 

purchasing the telephones without a service agreement.3 Id. at 

1131. While the Appeals Court concluded that the trial court 

judge could ordinarily include lost retail sales and lost 

profits in a restitution order, the specific language of the 

Federal Mandatory Victims Restitution Act of 1996, as applied in 

this case, required more than just an unverified letter from 

Sprint stating that its losses were the full unsubsidized retail 

prices of the telephones, without any evidence from which the 

trial judge could infer that the defendant's theft caused the 

victim to lose actual retail sales at those prices. Id. at 

1136-1137, 1139-1140.

In sum, it is unnecessary in the present case to conclude 

anything other than that the retail price of goods stolen from a 

 

3 This amount included apparently $3,300 in investigative 

costs incurred by Sprint. See United States v. Ferdman, 779 

F.3d 1129, 1134 (2015).
4

retail store in the straightforward circumstances of this case 

was proper.