After a trip to the grocery store, my five year old confessed that she had taken a candy bar. She had eaten it so we couldn’t return it. What’s the best way to handle this?
The first thing to do is to have a talk with her about things that belong to her and things that belong to others. She wouldn’t like having someone take her things without permission and she shouldn’t do this to someone else. After this you can take her back to the store and let her explain (with your help) and pay for the candy bar. If she gets an allowance or has birthday money she should pay for it with her own money.
Let her experience your disappointment at having done something dishonest and explain some of the consequences that grownups have to face when they steal, such as loss of a job or jail time. If she does this again then maybe a consequence like loss of a favorite toy or a time out would be a stronger message.