At TJ Maxx, shoppers are greeted by security body cameras. Customers in the beer aisle at Walmart can watch themselves on overhead video monitors. A drugstore patron discovers toothpaste trapped behind plexiglass.
Shoplifting and more aggressive theft costs are all part of the U.S. retail industry, costing tens of billions of dollars annually. But even as retailers deploy high-tech wiretapping techniques to win the war against shoplifting, new evidence shows they’re losing.
Theft poses a complex set of problems for U.S. retailers. When products disappear, sales decrease and overhead costs for insurance and additional security measures increase. A 2023 industry study found that 36 percent, or $40 billion, of so-called shrinkage, a measure of inventory losses, was due to external theft.
Complaints about locked items are also causing shoppers to flee stores, with nearly a fifth of in-store shoppers choosing to shop online after seeing such items, according to market research firm Numerator. That’s what it means.
The most stolen items are often items that are easy to put into pockets or can be made into money, such as cosmetics and deodorant from drug stores and power tools from home improvement chains.
Target announced earlier this year that its shrink costs increased by more than $500 million in 2023 compared to 2022, but the company announced Wednesday that its third-quarter loss decreased.
A Criminal Justice Council report released Wednesday showed shoplifting will trend upward from 2023 to 2024 in a sample of 23 cities. New York, Los Angeles and Chicago are all seeing more shoplifting than before the coronavirus pandemic.
Some retailers said efforts to curb theft were paying off. Home Depot Chief Financial Officer Richard McPhail said last week: It’s difficult to quantify. What we can say is that our investments are paying off. ”
U.S. retail giant Walmart said Tuesday that its “forecast for contraction in the U.S. is slightly better” than it expected at the beginning of the year.
Retail theft has become a prominent social issue, as shoppers face locked store shelves and videos of brazen thefts circulate on social media. California voters this month restored repeated shoplifting to felony status after a decade of classifying it as a misdemeanor. As a candidate, President-elect Donald Trump said store thieves should be shot.
Retailers are responding with new ways to deter shoplifting. Many rely on electronic monitoring.
According to research firm Coresight, surveillance cameras are now equipped with computer vision that can pick up clues such as suspicious walking or sweeping of shelves.
Cameras installed in hardware store parking lots can now scan not just license plates, but also the color, scratches, and dents on individual vehicles. The technology can alert the company to the arrival of a suspected stolen vehicle at another store.
Scott Glenn, Home Depot’s vice president of asset protection, said: Added a lockable cart to the store. This made it impossible for people to easily put large amounts of items in their carts and take them out of the store. We have added camera packages, public view monitors, and off-duty police officers and security guards in our stores. ”
“And there’s a lot of technology behind the scenes that I’m not going to go into too much because it’s a bit of a secret sauce,” he added.
Retailers have installed self-checkout kiosks to save money on cashiers, but some retailers are also experiencing an increase in stolen merchandise. Dollar General, the discount chain, is removing self-checkout lanes from most of its 20,000 stores to combat store shrinkage.
But the retail industry has gotten smarter with self-checkout techniques, such as moving barcode stickers from cheaper items to more expensive items, and installing more sophisticated scanners at self-checkout stations.
“We’re very excited to be able to provide self-checkout and point-of-sale technology to retailers like Walmart and Target,” said David Wilkinson, chief executive officer of NCR Voyix, which provides self-checkout and point-of-sale technology to retailers such as Walmart and Target. “You can even tell the difference between a Kool-Aid package and a T-bone steak” If you peel the barcode off a Kool-Aid pack and try to scan a steak over it. ”
Cameras at the cash register are also targeting customers. “We found that there was a psychological effect of knowing that you were being watched,” Wilkinson said in an interview earlier this year.
Some retailers are employing facial recognition technology to identify visitors suspected of committing theft or other crimes in the past. FaceFirst, a Texas-based vendor, says its algorithm “can find all recent instances of that person entering any location.” result? Human investigation with advanced (artificial intelligence) verification to calculate past losses and date/time stamped evidence packaged for law enforcement and prosecutors. ”
There was resistance to this technology. One-third of U.S. consumers surveyed by Coresight said they would shop less often or avoid shopping at stores whose cameras have facial recognition software. In December, federal regulators banned drugstore chain Rite Aid from using facial recognition for surveillance purposes for five years after the company accused customers of fraud based on false matches.
“Facial recognition is a very powerful surveillance technology,” said Jeremy Scott, senior advisor at the Electronic Privacy Information Center. “When retailers introduce this to their customers and employees, they lose anonymity and control over their identity. They can connect not just to the stores they go to, but to what they look at and who they are with. Every in-store action is now a potential data point for scrutiny and analysis.”
Ernesto López, senior research specialist at CCJ, said it’s not surprising that some retailers are pointing to a decline, even though shoplifting rates are reported to be rising.
With new technology introduced to deter shoplifting, “detection could increase,” he said.
