Do we really need to throw shoplifting kids into prison, which will only serve as a training school for worse crime? Stores have insurance for this kind of loss.
Return or replace the stolen items as restitution. Pay the value of the stolen items as punishment. And since we want poor kids to get the same lesson as rich kids, make them work the value of their punishment off with a real job, like graffiti removal or trash pickup or municipal grounds-keeping or something.
Sliding down the slope means replacing insurance with government, and turning this into a type of basic income. Let people take what they want from the store, and pay the store back with taxes.