I assume you were stopped or arrested for shoplifting in JCPenney's. That letter is a "civil demand" letter. A retail merchant is allowed to sue for up to $500 for the cost of any merchandise and the cost of investigation for your incident. They seem to set a random amount, but they range from about $200 to $450 in the cases I've handled.
If you pay, it is a settlement of any civil case against you and they cannot file suit. If you don't pay, they can file a civil suit and try to collect that way. Often, they don't go to the trouble to file a suit, since the dollar amount is low and it's more hassle than it's worth. They'll just count on a certain number of people paying based on the letter like the one you got. If they do in fact file suit, you can always choose to settle at that point, but they may demand more money to cover the cost of filing the suit, etc.
Keep in mind - this does absolutely nothing to stop any criminal case from going forward and can in fact be used as an admission of guilt against you in the criminal case in some cases. I practice in Orange County and the Harbor Justice Center where any theft case against you would be sent. If you were also arrested and there's a criminal case pending against you, let me know if you want to discuss it further. There are things I can do to keep this from coming a conviction against you and on your record to haunt you for years to come.
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