"My question is what are my rights?"
*** As a parent of an unemancipated minor, you are liable for his conduct. And since there is nothing in your post that says the charges are incorrect, your 'rights' are limited.
"Do I have to pay the fee?"
*** Yes, or face a lawsuit.
"Can I get it reduced since the value of the item stolen was $20.00?"
*** Of course you can ask it to be reduced, but there is no obligation for them to do so.
"What if I ignore the letter?"
*** The merchant can sue you in small claims court.
Applicable statute:
CA Penal Code, §490.5(b):
"When an unemancipated minor's willful conduct would constitute petty theft involving merchandise taken from a merchant's premises or a book or other library materials taken from a library facility, any merchant or library facility who has been injured by that conduct may bring a civil action against the parent or legal guardian having
control and custody of the minor. For the purposes of those actions the misconduct of the unemancipated minor shall be imputed to the parent or legal guardian having control and custody of the minor.
The parent or legal guardian having control or custody of an unemancipated minor whose conduct violates this subdivision shall be jointly and severally liable with the minor to a merchant or to a library facility for damages of not less than fifty dollars ($50) nor more than five hundred dollars ($500), plus costs. In addition to the foregoing damages, the parent or legal guardian shall be jointly and severally liable with the minor to the merchant for the retail value of the merchandise if it is not recovered in a merchantable condition, or to a library facility for the fair market value of its
book or other library materials. Recovery of these damages may be
had in addition to, and is not limited by, any other provision of law which limits the liability of a parent or legal guardian for the tortious conduct of a minor. An action for recovery of damages, pursuant to this subdivision, may be brought in small claims court if
the total damages do not exceed the jurisdictional limit of that court, or in any other appropriate court; however, total damages, including the value of the merchandise or book or other library materials, shall not exceed five hundred dollars ($500) for each action brought under this section.
The provisions of this subdivision are in addition to other civil remedies and do not limit merchants or other persons to elect to pursue other civil remedies, except that the provisions of Section
1714.1 of the Civil Code shall not apply herein."