How Costco’s unique strategies thwart rising retail theft

Jun 1, 2023
Written by WR Communications


Retail theft is soaring across the US, with giants like Walmart, Target, and Dollar Tree bearing the brunt of losses. However, Costco remains resilient, reporting no significant surge in inventory losses due to theft or fraud.

Costco’s CFO, Richard Galanti, revealed a brief increase in shrinkage following self-checkout introduction three years ago, but rates soon returned to usual levels. As its competitors struggle with escalating losses, with Target predicting shrinkage costs to top $1 billion in 2023, Costco’s success raises the question: what’s its secret?

The answer lies in four strategic practices:

Personal data collection: As a members-only retailer, Costco collects customers’ personal information only, creating a potential deterrent for theft.

Strict membership rules: Shoppers must prove membership upon entry and at purchase, ensuring all visitors are accountable members.

Receipt check at exit: Costco ensures receipts match cart items before customers leave the store, an added layer of scrutiny against theft.

Oversized packaging for valuable items: This discourages pilferage as items cannot be easily concealed. Even for organized retail crime rings, bulkier items prove less profitable for online reselling.

These core strategies have allowed Costco to navigate a climate of rising retail theft with minimal losses, demonstrating the effectiveness of its unique approach.

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