A lot of times they do not call the cops and they simply tell people that to scare them. In terms of the Civil Demand you do not have to pay it. The only time that letter is justified (and you still don't need to pay) is if you actually got away with the stuff and they lost their merchandise. Here, it sounds like they already got it back from you and so there are no grounds for the demand and you should not pay it.
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Kohls or Bloomingdales? Either way you won't get arrested after the fact. I advise my clients to ignore Asen as I've necer seen him sue to collect. He will write many letters and also call so I write him for my clients to only deal with me.
I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases. Feel free to check out my web site and contact me at (212) 577-9797 or via email at Eric@RothsteinLawNY.com. I was named to the Super Lawyers list as one of the top attorneys in New York for 2012. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. The above answer is for informational purposes only and not meant as legal advice.
You got stung.
You may very well be arrested and prosecuted for shoplifting. You can expect an A.C.D. if this is your first time. Part of the sentence will be restitution so you'll have to reimburse the store. The letter from the lawyer is an attempt at a civil settlement on top of and in addition to the criminal restitution remedy. So you'll pay way more than the items were worth. The ban will be in effect only as long as the store personnel remember you.
Also, be careful as prosecutors snoop through social media and Avvo to get evidence to use against you. Protect your Fifth Amendment right to remain silent by not saying too much in here. The A.C.D. is not guaranteed and I would recommend you speak with an attorney. Our society is so overly litigious that it is insane. The government spoke of tort reform but they were hiding a major uptick in arrests and civil actions against citizens.