海角大神

Locked-up merchandise deters theft, but have retailers gone too far?

The National Retail Federation reported $94.5 billion in inventory losses last year, and now some retailers are using more locked display cases to prevent shoplifting. But the practice can feel discriminatory, especially for people of color, critics say.

First Look

When the pandemic threat eased, Maureen Holohan was eager to scale back her online shopping and return to physical stores so she could more easily compare prices and scour ingredients on beauty and health care products for herself and her three children.

But that experience was short-lived. In the past six months or so, CVS, Target, and other retailers where Ms. Holohan shops have been locking up more everyday items like deodorant and laundry detergent as a way to reduce theft. And the Chevy Chase, Maryland, resident is now back to shopping online or visiting stores where she doesn鈥檛 have to wait for someone to retrieve products.

鈥淚 know they鈥檝e got to do something, but locking the stuff up definitely just has me walking by that aisle,鈥� said Ms. Holohan, a business consultant.

Across the retail landscape, businesses have been putting items under lock and key as a quick way to stop thieves. Some are considering extreme measures, including Rite Aid Corp., whose chief retail officer Andre Persaud told analysts on an earnings call late last year that it鈥檚 looking at 鈥渓iterally putting everything behind showcases to ensure the products are there for customers who want to buy it.鈥� It鈥檚 also considering using off-duty police officers at some of its stores.

But by trying to solve one problem, these businesses may be creating another: turning off shoppers with overreaching measures.

鈥淓verything has changed. We used to be catered to,鈥� said Sheila Schlegel of Queens, New York.

But now, 鈥渋f you鈥檙e coming to the store, there鈥檚 one person at that store, and that person you can tell has been there for 15 hours,鈥� said Ms. Schlegel, who recalled an incident where she waited for a sales clerk to unlock an item only to be told he didn鈥檛 have the key. 鈥淵ou don鈥檛 want to ask them for something if you don鈥檛 have to.鈥�

For consumers of color especially, the stepped-up security measures risk alienating a population that already feels overpoliced. That could unravel some of the inroads that chains like CVS, Sephora, and Walmart made in the aftermath of George Floyd鈥檚 murder in 2020, when they promised to avoid racially biased practices like locking up products only for Black customers.

鈥淲henever there鈥檚 a push toward greater criminalization, whenever there鈥檚 a narrative of increased crime and things like that, it is always consumers of color that are going to be bearing the brunt,鈥� said Tiffany Gill, associate professor of history at Rutgers University, and an expert in African American Women鈥檚 History, fashion, and beauty culture.

CVS Health Corp. and Sephora declined to comment on the story. Walmart said that its position of not locking up beauty products for women of color remains the same. Target confirmed it was locking up more products, but instead of targeting certain items, it locks up entire categories.

It鈥檚 unclear how much money retailers are losing due to organized retail crime 鈥� or if the problem has substantially increased. But the issue has received more notice in the past few years as high-profile smash-and-grab retail thefts and flash mob robberies have garnered national media attention.

The National Retail Federation, the nation鈥檚 largest retail trade group, said its latest security survey of roughly 60 retailers found that inventory loss 鈥� called shrink 鈥� clocked in at an average rate of 1.4% last year, representing $94.5 billion in losses.

The greatest portion of shrink 鈥� 37% 鈥� came from external theft, including products taken during organized shoplifting incidents, the trade group said. It also noted retailers, on average, saw a 26.5% uptick in organized theft incidents last year.

But while high theft in stores depletes inventory and limits sales, locking up items also reduces sales 鈥� by 15% to 25%, according to Joe Budano, CEO of Indyme, a technology company that sells retailers security devices.

John Catsimatidis, who owns the New York supermarket chains Gristedes and D鈥橝gostino鈥檚, said the chain has locked up more products like aspirin and deodorant in the past year but not as many as his drug store chain rivals. His chains have also doubled the number of security guards at some of its stores

He acknowledged that the move has resulted in some lost sales from impulse shopping but the added security has made shoppers more comfortable and has helped reduce theft, although he鈥檚 not sure by how much.

鈥淭his is not an exact science,鈥� he said.

Store workers, meanwhile, face the pressure of trying to do their jobs while also monitoring theft. Isabela Burrows, a manager at pet supplies chain PetSmart in Howell, Michigan, noted that her store in recent months has had to lock up more items like diffusers to calm dogs and cats and electric shaving shears. But while she feels more comfortable, she鈥檚 also had to deal with shopper annoyance.

鈥淚 feel overwhelmed,鈥� Ms. Burrows said. 鈥淭hey鈥檙e frustrated with me, and I have to find the item.鈥�

In what could be a sign of the overall challenges, drugstore chain Walgreens acknowledged that it might have overblown the shoplifting threat and gone too far in its security measures.

鈥淢aybe, we cried too much last year,鈥� James Kehoe, global chief financial officer at Walgreens told analysts during an earnings call last month. 鈥淧robably we put in too much and we might step back a little bit from that.鈥�

But a Walgreens spokesman cautioned that while the company is pleased to see retail theft levels starting to stabilize, they are 鈥渟till a serious national problem affecting all retailers.鈥�

Some retailers are coming out with less intrusive solutions to store theft. Home improvement retailer Lowe鈥檚 has followed Home Depot in testing technology that unlocks power tools when shoppers buy them at the cash registers instead of resorting to keeping the items in cages.

Anat Shakedd, the CEO and co-founder of Nexite, a company that makes tiny Bluetooth tags that can go on items, says her company has partnered with a top department store in the United States and other brands across Europe and Israel to help them monitor their inventory without locking things up.

The Freedom Case, developed by Indyme, asks shoppers for a cellphone number to opt into its service. The shoppers then receive a text message with a four-digit code that lets them open the case. Customers can retain their self-service privileges as long as they show normal shopping behaviors. But if they exhibit suspicious behaviors, store workers will be notified to provide assistance, he said.

Ms. Holohan said she doesn鈥檛 mind extra security guards, but she鈥檚 not interested in giving out her phone number.

鈥淚t鈥檚 invasive,鈥� she said. 鈥淚f they鈥檙e going to make it that hard to buy something, I鈥檒l find somewhere else to buy that.鈥�

This story was reported by The Associated Press. AP retail writer Haleluya Hadero in New York contributed to this report.