The introduction of on-the-spot fines for crimes such as shoplifting means some persistent offenders avoid picking up a criminal record, police say.
The fines were introduced by the government in 2004
Details of fines handed out in England and Wales do not have to be put onto the police national computer.
The Police Federation says this means people can offend repeatedly without facing court action and that police overuse fines to help meet targets.
But the Home Office insists fines provide "swift and effective justice".
The British Retail Consortium, which represents shop owners, said the use of fines for serial shoplifters is "ridiculously out of proportion" to the crimes they are committing.
The Home Office said the majority of offences are recorded on the police national computer.
A spokeswoman said: "Convictions aren't the only way to ensure justice and in many cases they are not the best solution.
"Pre-court disposals, such as penalty notices, have been strongly supported by the police as a way of immediately punishing low-level offenders."
But the Police Federation's Jan Berry told BBC Radio 4's Law in Action that because spot fines do not count as a criminal record, the details of those who receive them do not have to be entered onto the police national database.
"Someone could get caught shoplifting in different towns, receiving spot fines, and nobody would know," she said.
On-the-spot fines for theft and criminal damage, officially known as penalty notices for disorder, were introduced by the government in 2004.
In 2004, 2,072 were issued for shop thefts of under £200
In 2005, that figure increased to 21,997
And in the first six months of 2006, 16,807 were given out
They can be used for shoplifting when the value of the goods stolen is under £200, and for cases of vandalism when the estimated cost to repair the damage is less than £500.
The fines are £80 for over-16s and £40 for younger offenders.
Richard Dodds, from the British Retail Consortium, said: "Retailers were told that they would not be given to repeat offenders, that they would only be given with the victim's consent, and that they would only be given where the value of goods was less than £200.
"We're quite clear from feedback that we get from retailers that actually these guidelines are frequently being ignored."
Mr Dodds also claimed a Home Office consultation paper which suggested first-time offenders could simply be required to give an "on-the-street apology" to the shopkeeper rather than a fine was "a licence to walk into shops and take things".
The fines are not meant to be used in cases where the offender is suspected of being a drug addict - so the offender can be given help by the probation and prison services to tackle their addictions.
But there is evidence to suggest that in some force areas, this is being ignored.
Liverpool solicitor Tony Murphy told Law in Action some drug-addicted offenders were slipping through the net.
Law in Action is broadcast on BBC Radio 4 at 1600 GMT on Tuesday 6 March.