Overdue Books

I have worked at two fairly different public libraries - one a large county system, and the other a medium sized stand alone library. At both libraries there are problems concerning overdue books. My question is when does a book move from being merely "overdue" to being labeled stolen? 1 year, 2 years, 3 years, a decade? Maybe never, since we public libraries are so forgiving and don't want to associate ourselves with bill collectors god forbid we send a bill to someone on a fixed income, or an old lady who might call the local news. Instead we leave the book status as "overdue" when we know that there is a very small likelihood of the library ever reclaiming the book. This then brings up another important question - to use, or not use a collection agency?