Unfortunately for your parents, they drew a dumbass cop. This is not a small claims matter, it is a theft. In Kaleefornia it would be a felony because the value was over 400 dollars. Too bad.
The cop said it wasn't a theft because he didn't see it. My Dad asked him if he stuck a gun at somebody out here and took their money and he didn't see it, would that not be a theft. The cop said, "No, it would be armed robbery." My Dads said it was still a theft and the cop said it wasn't.
Or a lazy cop. Sometimes it's hard to tell the difference because lazy cops disguise themselves as dumbass cops.