Someone correct me if I'm wrong, but this is how I understand it:
If they put their hands on you, they must put you under citizen's arrest or else it's illegal. And basically any citizen can arrest anyone if they have probable cause, and they have to call the cops, and I know there are specific rules on how it's gotta be done. Rent-a-cops put people under (citizens) arrest all the time around here, then when the cops come they take care of it from there. Since it's private property, and the owners of the property hired them to do that job, they have more rights somewhat than if they would be out in public.
Oh yeah also, it's there for the mere presence. Most people will tend to behave if they see an "official" walking around, even if he is wearing a really funny uniform.
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