Legal Question in Criminal Law in California

The store cannot unilaterally drop the charges. It is not a party to the case. The parties are the state and your relative. The state filed the charges, so only the state can drop them.

There is a procedure in California called a civil compromise under which the state will drop charges if the defendant and the victim settle the victim's civil claim. This does NOT happen automatically, and the prosecutor is NOT required to drop the charges if the parties reach a settlement on their own. Your relative should discuss the prospects for a civil compromise with his lawyer; hopefully the lawyer can work one out for him.

Your relative should not try to do this on his own. If he does, he will almost certainly fail to complete the process correctly. At the same time, he will almost certainly end up admitting his guilt. Then, when the case goes to trial, that admission will be used as evidence against him -- and it will be very persuasive. In other words, trying to negotiate directly with the store is very likely to make your relative's position worse instead of better.

Mr. Hoffman is right. The Prosecutor is the only one who can request dismissal, and the judge has the discretion to say yes or no to dismissal.