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Journal of Public Policy and Marketing Courting Customers Assessing Consumer Racial Profiling and Other Marketplace Discrimination 2005

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Courting Customers: Assessing Consumer Racial
Profiling and Other Marketplace Discrimination
Anne-Marie G. Harris, Geraldine R. Henderson, and Jerome
D. Williams
Through an examination of 81 federal court decisions made between 1990 and 2002 involving
customers’ allegations of race and/or ethnic discrimination, the authors uncover three emergent
dimensions of discrimination: (1) the type of alleged discrimination (subtle or overt), (2) the level of
service (degradation or denial), and (3) the existence of criminal suspicion in the alleged
discriminatory conduct (present or absent). Using a framework that enables the categorization and
aggregation of cases with common themes, the authors demonstrate that real and perceived consumer
discrimination remains a problem in the U.S. marketplace, and they conclude that further research is
necessary for marketers to address the issue effectively.

any people have reflected on the strides that the
United States has made in education, housing,
employment, and other aspects of daily life following the passage of the Civil Rights Act of 1964. Given the
roots of the civil rights movement in marketplace interactions—for example, the consumer bus boycotts and consumer lunch-counter sit-ins of the 1950s and 1960s—it
seems appropriate to assess the progress that has been made
in the eradication of consumer discrimination in the marketplace 40 years later. To accomplish this goal, we examined
more than 80 federal court decisions spanning more than a
decade that address racial/ethnic marketplace discrimination. We begin with a discussion that explains the terminology that is frequently used in the literature and popular
press—for example, “shopping while black” (SWB) (Gabbidon 2003), consumer racial profiling (CRP) (Williams,
Henderson, and Harris 2001), consumer discrimination
(Harris 2003), and statistical discrimination (Lee 2000).
Next, we describe the extent of marketplace discrimination
and why we believe that this topic is important for marketers, and we discuss the legal issues and relevant legislation. In the remainder of the article, we focus on an analysis
of the federal cases.


Anne-Marie G. Harris is an assistant professor, Management Department, Salem State College School of Business in Massachusetts
(e-mail: Geraldine R. Henderson is an associate professor, College of Communication, Department of Advertising, University of Texas at Austin (e-mail:
Jerome D. Williams is F.J. Heyne Centennial Professor of Communication, Department of Advertising, with a joint appointment in the
Center for African and African American Studies, University of Texas
at Austin (e-mail: The second
author thanks the Institute for Innovation and Creativity at the University of Texas at Austin for its research support.

Vol. 24 (1)

Spring 2005, 163–171

Defining CRP
According to some definitions, CRP, or SWB, is analogous
to law enforcement racial profiling, which typically occurs
when law enforcement officers stop, question, investigate,
detain, and/or arrest people on the basis of their race/ethnicity rather than on probable cause or even a reasonable suspicion that these people have engaged in criminal activity.
This phenomenon is commonly referred to as “driving while
black or brown” (DWB).
However, many incidents of marketplace discrimination
do not involve suspecting customers of engaging in criminal
activity. In this article, we define CRP as a type of differential treatment of consumers in the marketplace based on
race/ethnicity that constitutes denial of or degradation in the
products and/or services that are offered to the consumer.
Our definition of CRP covers consumption experiences
beyond shopping in retail stores. For example, our analysis
of federal cases demonstrates that CRP frequently occurs in
places of public accommodation, such as hotels, restaurants,
gas stations, and service providers, as well as retail establishments, including grocery/food stores, clothing stores,
department stores, home improvement stores, and office
equipment stores. Furthermore, CRP affects members of
minority groups beyond those classified as black/African
American, such as Hispanics, Asians, Native Americans,
and Arab Americans. Indeed, since September 11, 2001,
there has been heightened interest and concern about CRP
as it applies to anyone perceived as Middle Eastern, including South Asians, Latinos, and even Jews (Nakao 2001).

Extent of CRP and Impact on Marketers
Compared with DWB, in which one survey reports that 37%
of African Americans believe that they have been victims of
racial profiling (Morin and Cottman 2001; Valia 2001), the
evidence suggests that SWB is a far more common experience among African Americans (Ainscough and Motley
2000; Henderson 2001). Williams and Snuggs (1997) conducted a mail survey of 1000 households and found that
Journal of Public Policy & Marketing


164 Policy Watch: Commentaries and Viewpoints

86% of African Americans believed that they were treated
differently in retail stores on the basis of their race. A 1999
Gallup poll reported that 75% of black men had been subjected to CRP (Knickerbocker 2000). Since 1990, the popular press has reported hundreds of accounts of CRP and marketplace discrimination against consumers of color.
Sociologist Feagin (1991) suggests that African Americans use several diverse strategies to cope with perceived
injustices, including withdrawal, resigned acceptance, verbal or physical confrontation, and the filing of lawsuits. In
Exit, Voice, and Loyalty, Hirschman (1970), a noted economist, describes a similar set of strategies: (1) exit (leave the
store), (2) voice (complain, file a lawsuit, and so forth), and
(3) loyalty (accept and continue to purchase from the
retailer). Our analysis focuses exclusively on the “voice”
strategy through lawsuits. For the sake of space and generalizability, we limit the current analysis to those cases filed
in federal courts in which judges issued published decisions
between 1990 and 2002, a time frame that coincides with a
large number of news accounts about CRP.
Given that consumers of color constitute approximately
one-third of the U.S. population and wield more than a trillion dollars of purchasing power (Humphreys 2004), it is
important to note that “exit” strategies due to SWB and
other forms of marketplace discrimination can have a direct,
negative impact on marketers. For example, sales at one
Treasure Cache store fell by more than 50% following an
SWB-related incident (Bean 2001). Dillard’s department
store stock has significantly dropped in the past few years,
which some link to the more than 100 CRP lawsuits filed
against the retail chain (Kong 2003). A Denny’s poll found
that approximately 50% of African Americans said they
would never eat at Denny’s again following negative publicity surrounding a CRP lawsuit, though in a subsequent
poll, the number fell to 13% because of aggressive efforts by
Denny’s to address CRP issues (Hood 2004).

Legal Review of CRP Issues and
Claims of marketplace discrimination are typically filed
under federal civil rights laws that stem from the Civil
Rights Acts of 1866 and 1964. We describe these two laws
and their application to cases of CRP and marketplace

Civil Rights Act of 1866
Congress enacted the Civil Rights Act of 1866 pursuant to
its Thirteenth Amendment authority to eradicate involuntary
servitude (Runyon v. McCrary 1976). Among the goals of
the Civil Rights Act of 1866 was to ensure “that a dollar in
the hands of a Negro will purchase the same thing as a dollar in the hands of a white man” (Jones v. Alfred H. Mayer
Co. 1968, p. 443). Plaintiffs who successfully prove intentional discrimination under this act are entitled to both equitable (injunctive) and legal (monetary) relief, including
compensatory and punitive damages (Johnson v. Railway
Express Agency 1975).
Victims of consumer discrimination have advanced valid
claims under two sections of the 1866 act, codified at 42

U.S.C. § 1981 and 42 U.S.C. § 1982. Section 1981 provides
that “[a]ll persons … shall have the same right … to make
and enforce contracts … as is enjoyed by white citizens.”
The term “make and enforce contracts” includes “the enjoyment of all benefits, privileges, terms, and conditions of the
contractual relationship.” The U.S. Supreme Court has
stated that the purpose of Section 1981 is “to remove the
impediment of discrimination from a minority citizen’s ability to participate fully and equally in the marketplace” (Patterson v. McLean Credit Union 1989).
Only a small number of plaintiffs have alleged that their
right to contract was violated during retail or other commercial transactions. Courts have narrowly interpreted the scope
of Section 1981 by focusing on conduct that prevents the
formation of the contract rather than on conduct that affects
the nature or quality of the contractual relationship. Many
federal courts insist that to state a valid claim, Section 1981
plaintiffs must produce evidence that they were denied an
opportunity to complete a retail transaction. This restricted
interpretation of the statute has resulted in the dismissal of
many plaintiffs’ claims at the summary judgment stage and
before the presentation of evidence to a fact finder
(Kennedy 2001).
Section 1982 provides that “[a]ll citizens of the United
States shall have the same right as is enjoyed by white citizens … to purchase personal property.” Personal property is
any tangible or intangible property that is not real estate.
Given that most courts interpret it similarly, this section
does not provide more effective relief than Section 1981
(Kennedy 2001). In general, the courts do not believe that
defendants have interfered with a plaintiff’s right to purchase personal property when that plaintiff is ultimately able
to purchase the goods or services he or she sought.

Civil Rights Act of 1964
Title II of the Civil Rights Act of 1964 prohibits discrimination and segregation in places of public accommodation.
This law aims to “eliminate the unfairness, humiliation, and
insult of racial discrimination in facilities which purport to
serve the general public” (House of Representatives 1964).
It provides a guarantee that “[a]ll persons shall be entitled to
the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any
place of public accommodation, as defined in this section,
without discrimination or segregation on the ground of race,
color, religion, or national origin.”
Although Title II does not require proof of intentional
discrimination, it disallows plaintiffs from seeking monetary damages. The statute permits a court to issue only equitable or declaratory relief (Newman v. Piggie Park Enters.,
Inc. 1968). Equitable relief, such as the issuance of a court
order that prohibits a defendant from engaging in discriminatory conduct, is nonmonetary. Declaratory relief is a binding adjudication of the rights and status of the litigants even
though no relief is awarded.
Title II also requires a plaintiff to notify the state civil
rights agency of the complaint before filing suit and within
a certain time frame from the alleged discrimination. This
notification requirement results in the dismissal of some
claims because many plaintiffs are not aware of it and fail to
meet the statutory deadline.

Journal of Public Policy & Marketing


Under Title II filings, courts must make a threshold determination as to whether the place in question is a “place of
public accommodation,” which Title II(b) defines as

exclusively on cases in which federal courts interpreted the
previously described federal laws.

1. Any inn, hotel, motel, or other establishment that provides
lodging to transient guests;
2. Any restaurant, cafeteria, lunchroom, lunch counter, soda
fountain, or other facility principally engaged in selling food
for consumption on the premises;
3. Any motion picture house, theater, concert hall, sports arena,
stadium, or other place of exhibition or entertainment; and
4. Any establishment that is physically located within the
premises of any establishment otherwise covered by this subsection, or within the premises of which is physically located
any such covered establishment, and which holds itself out as
serving patrons of such covered establishment.

The cases that we review include plaintiffs of all racial
groups who claimed that they were treated poorly compared
with white customers in commercial establishments. More
specifically, we analyzed cases in which people of color
alleged that defendants violated their rights under federal
statutes covering “the making and enforcing of contracts” (§
1981), “the purchase of personal property” (§ 1982), and
“the full and equal enjoyment … of places of public accommodation” (Title II). We report a total of 81 court cases that
were filed against 57 different defendants, indicating that
some defendants were pursued on multiple occasions. The
resulting database includes major retailers, such as OfficeMax, Wal-Mart, Sears, Dillard’s, Macy’s, and Home Depot.
Note that the inclusion of a company in our database of
cases is not an indication of guilt. This only means that a suit
was filed against the company (for a complete list of all 57
defendants along with the number of times each defendant
was implicated, see Table 1).

Most consumers and their counsel are surprised to discover that retail stores are not considered places of public
accommodation under Title II. There are some exceptions to
this rule because the act does cover retail stores that contain
eating establishments (and eating establishments that are
“located on the premises of any retail establishment”).
According to the Supreme Court, “Retail stores, food markets, and the like were excluded from [Title II] for the policy reason [that] there was little, if any, discrimination in the
operation of them” (Kennedy 2001, pp. 335–36). Legal
commentators argue that Title II should be amended to
include all retail establishments among the list of covered
entities—given their coverage in the Americans with Disabilities Act as well as many state public accommodations
laws—and to provide for monetary damages before it can
truly become an effective tool in addressing the discriminatory conduct that occurs in the marketplace (Harris 2003;
Kennedy 2001).

State Laws Prohibiting Discrimination
State laws also provide relief for some victims of marketplace discrimination. Several states have enacted civil rights
or human rights statutes similar to the federal Civil Rights
Acts. However, most consumer discrimination claims tend
to be mediated and resolved out of court, leading some commentators to characterize state statutes as ineffective in
terms of addressing systemic problems (Haydon 1997).
Although settlements may efficiently resolve individual
claims to the parties’ satisfaction, they may also enable
defendants to shield themselves from greater scrutiny and
bad publicity. In addition, potentially valid claims are not
adjudicated, and thus the courts are prevented from establishing precedent with the force of law. State courts have
decided only 89 cases of consumer discrimination that
involve state public accommodations laws, whereas federal
courts that interpret state public accommodations statutes
decided an additional 36 cases (Harris 2004). We have not
included lawsuits filed solely under state laws because of
limitations of space and overall generalizability.
Thus, judicial opinions contribute to an understanding of
CRP and marketplace discrimination, yet it is important to
note that complaints filed in court represent a “tiny and nonrandom fraction” of actual incidents of discrimination
(Siegelman 1999, p. 82). Our subsequent analysis focuses

Analysis of Cases

Our primary impetus in developing the framework for analyzing the cases was to categorize and aggregate cases with
common themes under a common heading. To achieve this
goal, we examined the case summaries to ascertain where
commonalities existed. Although it was not our intent to
engage in a sophisticated manifest or latent content analysis
study of the case summaries, we found it useful to use standard principles typically used in content analysis research to
place each case systematically in a meaningful category.
For example, training was conducted to ensure congruity
among the researchers across three themes (or dimensions).
With the researchers serving as coders, each author independently read the text of the 81 cases, using the case summary as the unit of analysis, and made a case-by-case
assessment of each of three dimensions using dichotomous
measures—for example, the type of discrimination (subtle
or overt), level of service (degradation or denial), and criminal suspicion (present or absent). Given that the coding
tasks the researchers performed were more typical of a manifest content analysis and required less interpretation of the
content by the coders in the unit of analysis (Kolbe and Burnett 1991), there was little disagreement in applying the
three dimensions to the cases. Most sophisticated content
analysis studies usually require some type of intercoder reliability measure that corrects for chance agreement, such as
Scott’s (1955) pi index. However, for this type of content
analysis, which was undertaken merely to categorize cases,
it was appropriate to use a simple percentage–of-agreement
method (Kassarjian 1977). The intercoder reliability scores
across all three dimensions exceeded 95%, which was well
above the .85 standard that is recommended when not correcting for chance agreement (Kassarjian 1977). Thus, we
are confident that the categorization framework using the
three dimensions successfully captures the commonalities of
all cases.

166 Policy Watch: Commentaries and Viewpoints
Table 1.

Number of Cases Filed Per Defendant


of Claims

Waffle House
Burger King
Dave & Buster’s
Pizza Hut
A&P Food Stores
ABC Liquors
Adams Mark
Avis Rent-a-Car
Baur’s Opera House


Budget Rent-a-Car
Cloverleaf Farms Dairy
Command Performance
Cracker Barrel
Days Inn of America
Domino’s Pizza
Don Stein Buick
Duty Free Shoppers
Fraternal Order of Eagles
Gordmans, Inc.
Great Clips
Holiday Inn
Home Depot
Hy-Vee Food Stores, Inc.
Jewel Food Stores
Kaybee Toys
Macy’s Department Store
Marriott International
Maryland Hospitality, Inc.
National Amusements


New York Yankees


Ocean Mecca Motel, Inc.
Philip Morris
Radio Shack
Restaurant Compostela
Romeo Carryouts
Rumors Restaurant
Sam & Harry’s
Sears Roebuck
Shell Oil
Steak ’n Shake
T.J. Maxx
Tommy Hilfiger
Tops Friendly Markets
United Refining Co. of


Large retail establishment
Large retail establishment
Fast food/carryout/delivery
Fast food/carryout/delivery
Fast food/carryout/delivery
Food/grocery store
Small retail establishment
Car rental/car dealers
social club
Car rental/car dealers
Food/grocery store
Hair salon
Gas station
Fast food/carryout/delivery
Car rental/car dealers
Small retail establishment
Food/grocery store
Entertainment/social club
Large retail establishment
Hair salon
Large retail establishment
Food/grocery store
Large retail establishment
Food/grocery store
Large retail establishment
Large retail establishment
social club
social club
Large retail establishment
Tobacco producer
Small retail establishment
Fast food/carryout/delivery
Large retail establishment
Gas station
Large retail establishment
Fast food/carryout/delivery
Large retail establishment
Small retail establishment
Food/grocery store
Gas station

Establishing a Framework for Analysis
We uncovered the following three emergent dimensions that
served to summarize accounts of marketplace discrimination against people of color: (1) the level of service that
results from the alleged discriminatory behavior (degradation or denial), (2) the type of discrimination (subtle or
overt), and (3) the existence of criminal suspicion in the discriminatory behavior (present or absent).
With respect to the first dimension, discrimination can
result in a level of service that is either an outright denial or
a degradation of the products and services. In a retail environment, the denial of goods or services occurs when customers are prevented from participating in consumption
experiences. Examples include refusing to wait on certain
customers or to provide them information about goods or
services that is available to other customers, denying customers access to the establishment, and removing customers
from the store. In contrast, a degradation of goods and services occurs when customers of color are allowed the opportunity to transact but are provided something less—in a variety of possible ways—that what white customers receive.
Degradation can take many forms, such as extended waiting
periods, prepay requirements, being charged higher prices,
and being subjected to increased surveillance and to verbal
and/or physical attacks, including the use of racial epithets.
In making such a distinction, we found support in the
Civil Rights Act of 1866. As we mentioned previously, Section 1981 prohibits race discrimination in “making and
enforcing contracts,” including commercial transactions.
This section prohibits a merchant or a service provider from
denying a customer the opportunity to engage in a transaction on the basis of the customer’s race. That statute further
defines “the right to make and enforce contracts” by stating
that it includes “the right to the enjoyment of all benefits,
privileges, terms, and conditions of the contractual relationship.” This language should ensure that all consumers
receive the same level of transaction experience when
spending the same dollars. Therefore, the law guarantees a
consumer both the right to buy a ticket to ride the bus and
the right to sit in any seat he or she chooses. Thus, we
believe that it is important to make the distinction between
“denial” and “degradation.”
The second dimension, overt versus subtle discrimination
type, is derived directly from extant research (Harris 2003;
Williams, Lee, and Haugtvedt 2004). Overt discrimination
is obvious and direct, whereas subtle discrimination is more
ambiguous and indirect (Harris 2003). The National
Research Council’s (Blank, Dabady, and Citro 2004) landmark study on the measurement of racial discrimination
identified two components in its definition of racial discrimination: (1) differential treatment (i.e., overt) and differential effect, which the report actually refers to as being
“subtle.” Furthermore, recent research on the measurement
of discrimination and prejudice has focused on constructs
and techniques designed to tease out the differences
between overt expressions of prejudice and more subtle
forms—for example, the symbolic racism scale, modern
racism scale, implicit association test, stereotypic explanatory bias, linguistic intergroup bias, and so forth (for a discussion of these constructs and techniques, see Williams,
Lee, and Haugtvedt 2004).

Journal of Public Policy & Marketing

The two dimensions of level of service and type of discrimination combine to form four different CRP categories:
(1) subtle degradation, (2) overt degradation, (3) subtle
denial, and (4) overt denial. Subtle degradation of goods and
services involves cases in which plaintiffs complain that
they did not receive what they expected in a particular consumption setting but do not have direct evidence that this
treatment was based on their race or ethnicity. In contrast,
overt degradation occurs when it is clear that nonwhite
patrons received less by way of goods and services than
white customers. Subtle denial refers to situations in which
plaintiffs allege that they were outright denied access to
goods or services; however, they are unable to identify
white patrons who received better treatment. Conversely,
overt denial occurs when there is clear evidence of preferential treatment of white patrons compared with nonwhite
counterparts. Table 2 summarizes these prototypes in matrix
The third dimension of criminal suspicion alludes to the
common misperception that minority consumers engage in
more criminal activity than majority consumers. The literature suggests that there is a predilection for singling out
people of color for increased scrutiny by criminal justice
officials (Gabbidon 2003). For example, because of the
increased concern over DWB, many states now engage in
ongoing data collection to assess the validity of traffic racial
profiling. Notably, some early results suggest that majority
drivers have a greater propensity to engage in criminal
activity. For example, Northeastern University Institute on
Race and Justice’s recent study of Rhode Island traffic stops
shows that nonwhite motorists were 2.5 times more likely to
be searched than white motorists (Farrell et al. 2003). Furthermore, when the traffic stop resulted in a search, whites
were more likely to be found with contraband; 23.5% of
white drivers who were searched were found with contraband compared with 17.8% of nonwhite drivers. Somewhat
related to this result, Federal Bureau of Investigation Uniform Crime Reporting data indicate that the greatest percentage of arrestees is white; for example, in 2002, more
than 70% of arrestees were white (Federal Bureau of Investigation 2004). However, recent signal detection studies in
psychology with blacks and whites in the roles of police
Table 2.

The CRP Grid

Level of




28 (35%)
06 0(7%)
34 (42%)

26 (32%)
21 (26%)
47 (58%)

54 (67%)
27 (33%)
81 (100%)

Table 3.

Extent of Discrimination


officers and criminals suggest a perceptual sensitivity effect;
that is, blacks were incorrectly shot at more than whites, and
guns held by blacks were less distinguishable from harmless
objects than were guns held by whites (Greenwald, Oakes,
and Hoffman 2003). Given the inconsistency of data on presumption and perception of involvement in criminal activity
versus actual involvement, we believe that “presence” versus “absence” of criminal suspicion is an important categorization theme.

Thematic Interpretation
Subsequently, we discuss the 81 cases on the basis of the
first two dimensions of level of service and type of discrimination (represented in the Table 2 matrix), along with the
third dimension of criminal suspicion. Table 3 summarizes
the status of each of the 81 cases.

Subtle Degradation
This category contains 28 cases, more than any other category, and it represents 35% of all the cases. Defendants
include bar/restaurants (2), car rental/car dealers (1), entertainment/amusement/social clubs (1), fast-food/carryout/
delivery establishments (2), food/grocery stores (3), hair
salons (1), large retail establishments (12), lodging (3),
small retail establishments (2), and tobacco producers (1).
More than two-thirds (19) of these cases were adjudicated in
favor of defendants, suggesting that courts did not believe
that any degradation of goods or services occurred as the
result of race or ethnicity. In one-fourth (7) of these cases,
defendants settled, and only two cases were decided in favor
of plaintiffs.
One of the most notorious subtle degradation cases
involved a black woman who was shopping at Dillard’s
department store. She selected her items and paid for them
at the checkout counter, where the sales associate gave her a
coupon for free cologne. She proceeded to the fragrance
counter and, while attempting to redeem the coupon, was
stopped by a security officer who searched her belongings.
Although there was no direct evidence that the security officer intentionally discriminated against her because of race,
he filed a two-page “Security Report” that referred to her
status as an African American 12 times (Hampton v. Dillard
Department Store 2002).
A Kansas City jury found that the store’s security officers
violated the plaintiff’s right to make and enforce contracts
when they harassed her at the fragrance counter. The jury
awarded her $1.1 million in punitive damages in addition to
compensatory damages. The Tenth Circuit Court of Appeals
upheld the jury award even though the harassment occurred
after Ms. Hampton paid for her merchandise, finding that

Status of CRP Cases

Description of Category
Settled cases
Cases with finding for plaintiff
Cases with finding for defendant
Total number of cases in category

Subtle Degradation
of Goods and/or

Overt Degradation
of Goods and/or

Subtle Denial
of Goods and/or

Overt Denial
of Goods and/or







168 Policy Watch: Commentaries and Viewpoints

the contractual relationship between her and Dillard’s had
not yet ceased when the security officer detained her. Nevertheless, the Tenth Circuit Court specifically rejected the
notion that consumers of all races have the right to a
harassment-free shopping experience, explaining that there
“must have been interference with a contract beyond the
mere expectation of being treated without discrimination
while shopping” (Hampton v. Dillard Department Store
2002, p. 1118). The United States Supreme Court denied
Dillard’s petition to review this decision.

Overt Degradation
This category contains the second-highest number of cases
(26, or 32%) and includes defendants such as bar/restaurants
(5), car rental/car dealer (1), entertainment/amusement/
social clubs (3), fast-food/carryout/delivery establishments
(5), food/grocery stores (2), gas stations (3), large retail
establishments (3), lodging (2), services (1), and small retail
establishments (1). Despite the overt nature of the discriminatory conduct in these cases, half of the cases (13) were
found in favor of the defendant. Regarding the other cases,
42% (11) were settled out of court, and only 2 were decided
in favor of the plaintiff. Many federal courts are narrowly
interpreting the statutory language of Section 1981, which
evinces their failure to understand the experiences of consumers of color, who are regarded as lacking a valid claim
of discrimination unless they suffer a complete denial of
An example of especially egregious discrimination
occurred at a Conoco store in Fort Worth, Tex. The plaintiffs, who are Hispanic, stopped to purchase gas and other
items on their way to a family picnic. When they presented
a credit card for payment, the Conoco employee immediately stated, “I will need to see [identification].” The plaintiff presented her valid Oklahoma driver’s license, but the
employee responded, “I’m not going to take that.” During
the dispute, one of the plaintiffs began to feel ill and decided
to leave the store to avoid complications to a chronic health
problem (Arguello and Govea v. Conoco, Inc. 2003). The
employee then begrudgingly agreed to the transaction but,
after additional discourse, told the plaintiff, “f— you, you
f—ing Iranian Mexican bitch, whatever you are.”
This verbal assault was followed by the employee shoving their purchases off the counter, gesturing obscenely at
the plaintiffs, and announcing over the store’s intercom that
they should “go back where you came from, you poor Mexicans,… you goat-smelling Iranians.” When one of the
plaintiffs tried to reenter the store to determine the
employee’s name, he was barred from doing so. The
employee readily agreed that she discriminated against
them. When the plaintiffs lodged their complaints with
Conoco management, their efforts were rebuffed, and the
company neither apologized nor responded.
According to the Fifth Circuit Court of Appeals, none of
the conduct alleged in the complaint or proved at trial
infringed on the plaintiffs’ rights as protected by Section
1981 and Title II. The court found that though the store clerk
may have deterred them, she did not prevent their ability to
contract with the firm under the same terms and conditions
as white customers. Therefore, neither plaintiff was entitled
to injunctive relief. The United States Supreme Court
refused to review the Court of Appeals’ decision.

Subtle Denial
Subtle denial, the smallest category of the four, contains
cases in which there was denial of service along with ambiguity as to whether this discrimination was based on race.
Establishments include a bar/restaurant (1), fast-food/carryout/delivery (1), hair salon (1), large retail establishment (1),
lodging (1), and small retail establishment (1). Half of these
cases (3) were found in favor of the plaintiff, 2 were decided
in favor of the defendant, and 1 was settled.
An example of subtle denial of service occurred when a
white woman took her two African American grandsons and
their mother on a weekend trip to the beach. The white
plaintiff entered a motel’s office to inquire about room
availability, while the remainder of her family stayed in the
car. She checked into the motel for two nights and paid the
bill in advance with cash. They then deposited their bags in
the room and headed for the outdoor pool. Within a few
minutes, the desk clerk appeared and demanded that they
leave immediately. When the plaintiffs asked, “Why? What
did we do?” the desk clerk said, “I want you off my
premises now.” He did not respond to their repeated
requests for an explanation (Murrell v. Ocean Mecca Motel,
Inc. 2001).
The desk clerk claimed that he was enforcing the fourperson room occupancy limit, though the plaintiff’s party
consisted of four people and the motel’s brochure and Web
site stated that all rooms had between five- and sevenperson limits. The clerk attempted to withhold $50 for a
room-cleaning charge, but the plaintiff protested that they
had occupied the room for less than ten minutes and eventually received a full refund. The 4th Circuit Court of
Appeals reversed the trial court’s decision that the plaintiffs
had failed to present sufficient evidence of race discrimination, finding the proffered circumstantial evidence

Overt Denial
This final category contains the greatest number of cases
involving outright denial of service and represents more
than one-fourth (21) of all CRP and discrimination incidents. Establishments include bar/restaurants (10), a car
rental/car dealership (1), entertainment/amusement/social
clubs (2), fast-food/carryout/delivery establishments (2), a
food/grocery store (1), a large retail establishment (1), lodging (2), services (1), and a small retail establishment (1).
More than half of the cases (13) were settled, which is the
highest among the categories. In contrast, fewer than 20%
(5) were found in favor of the defendant, which is the lowest percentage among the categories. The remaining cases
were decided in favor of the plaintiff (3).
This prejudicial conduct is exemplified by several lawsuits filed against Denny’s restaurants. One particular case
involved a server who forced African American customers
to wait an extraordinarily long time to be seated. He then
proceeded to make harassing gestures and directed racially
charged, derogatory comments toward them. The waiter
eventually refused to serve the table, informing managers
that they could not make him serve “n—.” In a similar case,
two African American customers at a different Denny’s
restaurant alleged that they were subjected to racially
derogatory comments, refused service, and directed to leave

Journal of Public Policy & Marketing

the premises without receiving their meals. Not surprisingly,
both cases resulted in confidential, out-of-court settlements
(Charity v. Denny’s 1999; McCoo v. Denny’s 2000).
Because these lawsuits were filed, Denny’s has paid $54
million in damages to settle two class-action suits and has
undergone a major restructuring to address these issues.
Today, Denny’s is consistently listed near the top in rankings of the best companies in the United States for African
Americans (Bean 2003; Hood 2004; for a detailed account,
see Adamson 2000).

Criminal Treatment
Our analysis reveals that 40% of all CRP cases involved
allegations that customers of color were treated with suspicion or as if they were criminals (see Table 4). Of these
cases, 16 involved subtle and 10 involved overt degradation
of service. Only 3 cases involved subtle denial, whereas 3
others involved overt denial of service. More than half of the
cases of subtle degradation involved some form of criminal
treatment. We describe two examples next.
The first example is a Massachusetts case in which a
white female reported that she was instructed by her
employer to engage in discriminatory treatment of minority
customers. “For example, … her supervisors … asked her to
shadow minority customers who were shopping in the store
because of their belief that such customers were more likely
to steal” (Commonwealth of Massachusetts v. The Children’s Place Stores, Inc. 2000, p. 3). She also alleged that
her white supervisors directed her to refuse minority customers large shopping bags because they would use the bags
to steal. In addition, she claimed that she and other sales
associates were told to withhold credit card applications
from minority customers. Supervisors also informed sales
associates “not to bother to attempt add-on sales with minority customers nor to inform minority customers of sales or
promotions” (Commonwealth of Massachusetts v. The Children’s Place Stores, Inc. 2000, p. 3).
After the complaint was filed, the Massachusetts Attorney General’s Office sent matched-pair testers to shop at
several Children’s Place stores throughout Massachusetts to
observe and record customer treatment. The testing showed
that black testers were more likely to be followed by store
personnel, whereas white testers were not subjected to such
surveillance. When testers made a major credit card purchase, Children’s Place employees were more likely to compare the black tester’s receipt signature to his or her credit
card signature and to scrutinize the black tester’s signature
more closely than the white tester’s signature. The Attorney
General’s Office subsequently filed suit against the Children’s Place, and both parties eventually arrived at a negotiated agreement under which the retailer agreed to require

Table 4.


training of all employees and to submit to additional testing
The second example is a class-action suit that was filed in
New York City against Macy’s and its parent company,
Federated Department Stores, which the parties settled in
July 2004. In the complaint, African American customers
alleged that Macy’s and Federated Department Stores systematically discriminated against people of color by targeting them as suspected shoplifters. The defendants’ common
discriminatory practices as described in the complaint
include the following:
Targeting people of color to be personally followed by plainclothes security detectives and watched by video surveillance by
the use of, among other things, “race codes” to identify AfricanAmericans when they enter Macy’s stores; tolerating the use of
racially derogatory comments by Macy’s security managers,
including referring to African-American shoppers as “Monkeys;” subjecting people of color to false accusations of
shoplifting in disproportionately high percentages whereby, in
certain Macy’s stores, people of color make up more than 90%
of the people grabbed for alleged shoplifting; imposing actual
“quotas” for the number of shoplifting cases that security personnel are required to make; demanding in-store monetary payments from people of color falsely accused of shoplifting to
increase Macy’s profits; threatening people of color with criminal prosecution or extended confinement in handcuffs or holding cells away from their family and friends to coerce false confessions and cash payments to security personnel in order to be
released; and subjecting people of color suspected of shoplifting
to ridicule, insults, verbal and physical abuse and harassment.
(Simmons-Thomas v. Macy’s East, Inc., Federated Department
Stores, Inc., et al. 2003, p. 2)

Through this research, we demonstrate that both race and
ethnic discrimination remain vexing problems in places of
public accommodation and retail establishments; the results
suggest the need for further research. We observed that the
number of lawsuits filed in federal court alleging marketplace discrimination has increased since we began our
study. Perhaps members of racial groups (especially blacks)
have transitioned from being vulnerable (Hill 1995) to being
vocal (Hirschman 1970). Because defendants face the perception among African Americans and other people of color
that business from minority customers is not valued as
highly as that of white customers, defendants faced with
charges of discrimination have financial and other incentives to settle such cases rather than subject themselves to
the publicity a lawsuit could engender.
In terms of further research, we recommend a more rigorous content analysis than that of our preliminary analysis,
which we undertook mainly for purposes of categorization.
In addition to placing each case in a cell with descriptive

Criminal Treatment of Customers in CRP Cases

Description of Category
Criminal treatment
Total number of cases in category

Subtle Degradation
of Goods and/or

Overt Degradation
of Goods and/or

Subtle Denial
of Goods and/or

Overt Denial
of Goods and/or







170 Policy Watch: Commentaries and Viewpoints

meaning, which was our main objective, it would be useful
to derive some prescriptive meaning from each cell. For
example, a deeper analysis might address such questions as
why there are so few cases in the subtle denial category
(6%), why there are so few cases with a finding for the
plaintiff (9) compared with out-of-court settlement (29) or a
finding for the defendant (38), how these results relate to the
case categories, and why the percentage of criminal treatment cases is so low for overt denial (14%, or 3 of 21 cases)
compared with subtle degradation (57%, or 16 of 28 cases).
Ultimately, additional research is necessary to determine
what prescriptive measures can address the problem or perception of CRP.
Lawful conduct and ethical treatment may require strategic policy changes to ensure a more diversity-friendly environment for customers of all races. One avenue is diversity
training designed to sensitize employees to explicit or
implicit prejudices that inhibit them from treating all customers with dignity and respect. Following such consciousness raising, firms should actively monitor interactions with
customers to ensure that both positive outcomes and negative incidents are consistent across diverse subgroups. For
example, some retailers recently have begun employing “the
demographic test” to detect and prevent discriminatory
behavior among their employees by using U.S. Census data
to determine the racial/ethnic makeup of their store trade
areas and by comparing those data with their store arrest and
detention records (Fifield and O’Shaughnessy 2001).
Regardless, people of color must be vigilant to the remaining vestiges of segregation and discrimination, understand
their legal rights, and make their voices heard by holding
offenders accountable. In this way, all consumers can ensure
that they receive equitable treatment for equal dollars.


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