Anytime I read these kinds of things, I can usually find an answer with two seconds of Googling. This is one of those cases. Apparently it's not necessarily that police are being instructed to ignore shoplifting altogether, but because of jail overcrowding, time involved with all the paperwork, etc. they will typically give a ticket/citation if the total amount of stolen items is under a felony amount, if the theft was non-violant, and if the person doesn't have a record of similar behavior. And yes, apparently in some cities/states, police cannot arrest someone for shoplifting unless they personally saw it happen. This means the store employees must apprehend the person, and obviously there are many stores that will discourage staff from doing so for a number of reasons.