Costco, the beloved warehouse retailer, has managed to escape the rampant theft that has plagued some of America’s retail giants like Target and Walmart.

Costco has found a way to dodge the theft issue that’s causing headaches for big retailers like Target and Walmart. And you might be surprised at how simple their strategy is.

A Simple Solution in a Season of Turmoil

During a recent fourth-quarter earnings call, Richard Galanti, their CFO shared the key to their success: they’re not big fans of self-checkout. Unlike many stores that have jumped on the self-checkout bandwagon, Costco’s chosen a different route.

The Self-Checkout Conundrum

Sure, Costco has some self-checkout spots, but only in a few places. Walmart, on the other hand, is all in on self-checkout, even trying out stores that only have self-checkout, as CNN Business points out.

Here’s the thing: The National Retail Federation found that unsold items (due to theft or other issues) jumped by 53%, costing an astonishing $94.5 billion between 2019 and 2021. A study from the University of Leicester showed that stores with self-checkout saw about 4% of their stuff get swiped, while stores without it only had 1.5% go missing.

Retail Theft is a Big Deal Now

As we recently wrote in the blog post, Retail Theft: New Strategies To Manage Loss Prevention, “if the headlines are to be believed, our post-pandemic, inflationary, recessionary retail world is seeing rates of pushout theft, smash and grabs, shoplifting, and staff skimming soar.” And executives at Walmart, Home Depot, and Target have voiced their concerns about this growing theft problem.

Target’s CEO, Brian Cornell, has gone as far as to label it “unacceptable” and unsustainable. It’s gotten so bad for Target that they’ve shut down nine stores across four states.
But they’re not alone. Stores like CVS, Macy’s, and Walmart are also having a tough time with theft. More and more, we’re seeing stores locking up goods because of organized theft rings. Plus, random acts like the recent looting in Philadelphia aren’t helping.

As Retailers Blame Shoplifting, are the Concerns Real or Overblown?

The National Retail Federation says lost items set retailers back about $112 billion. But some folks in the know question if these numbers are painting the full picture, hinting that maybe employees are part of the problem.

While a lot of stores are quick to point fingers at shoplifters, some deep dives suggest that things like employee theft and messy stock control might also be culprits. And as stores face challenges, like people buying more essentials and fewer luxuries, they might be looking for something to blame.

How Retailers Can Tackle Theft

Wrapping up, it seems like Costco’s “less is more” approach to self-checkout might be helping them dodge the theft bullet.

Retailers looking to tackle this issue need to get creative. There’s still debate on what the real problems are, but one thing’s for sure: stores need to stay nimble and really get what their customers are about.

For those wanting to up their game, things like Electronic Article Surveillance (EAS), Display and Fixture Lockups, and cool AI face-spotting tech might be the way to go.

And if you’re curious about diving deeper into these tools, give our team a shout. Together, we can help you create a customer-focused retail space ready to grow despite the challenges of the modern retail landscape.