The felony threshold in California is $950. In Texas it's like $2,500. Below that theft is a misdemeanor which typically means they're eligible for incarceration of up to one year. It's pretty difficult to prosecute people that the cops don't arrest.

Do you think the companies that insure these stores will just trust that something has been stolen if the store didn’t report it to the police?

There is no point in insuring against a predictable cost of doing business. An insurer would simply charge a premium equal to the expected amount of theft, plus a margin for their profit and the (small) risk they are taking. For the many retail stores where insurance doesn't make sense, filing a police report is just extra wasted time and effort if it won't result in any tangible results.

You think stores buy insurance against shoplifting?

You think insurers offer it? How much do you think it would cost?

My estimate for the cost is on average more than the shoplifting costs... Plus all the administrative work.

The correct answer is - it would be prohibitively expensive to get insurance for shoplifting, so shops don't have any. They just take the hit as "shrinkage".

> any theft less than $1k isn’t prosecutable.

It absolutely is, the cops and the DA just choose not to give a shit.