> The police bungled this badly by setting up a fake photo lineup...*
FWIW, this process is similar to traditional police lineups. The witness is shown 4-6 people – one who is the actual suspect, and several that vaguely match a description of the suspect. When I was asked to identify a suspect in my robbery, the lineup included an assistant attorney who would later end up prosecuting the case. The police had to go out and find tall slight-skinned men to round out the lineup.
> ... with the loss prevention clerk who submitted the report (who had only ever seen the same footage they had).
Yeah, I would hope that this is not standard process. The lineup process is already imperfect and flawed as it is even with a witness who at least saw the crime first-hand.