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US shoplifting rises despite new surveillance
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US shoplifting rises despite new surveillance

Body cameras on security guards greet shoppers at TJ Maxx. Customers in Walmart’s beer aisles can watch themselves on overhead video monitors. Pharmacy patrons find the toothpaste locked behind Plexiglas.

All became part of the US retail landscape as the costs of shoplifting and more aggressive types of theft have increased tens of billions of dollars a year. But even as retailers adopt high-tech interception techniques in an attempt to win the war against shoplifting, new evidence indicates they’re losing.

The theft has led to a complex set of problems for U.S. retailers: Disappearing products reduce sales and add overhead costs for insurance and additional security measures. A 2023 industry survey found that foreign theft accounted for 36 percent, or $40 billion, of so-called shrinkage, a measure of stock losses.

Frustration over discontinued goods is also causing shoppers to flee stores: Nearly a fifth of store customers who encounter such goods choose to shop online, according to Numerator, a market research firm.

The most stolen items are often those that are easy on the pocket or profitable to fence: cosmetics and deodorants at drugstores or power tools at home improvement chains.

Target earlier this year said churn costs increased by more than $500 million in 2023 compared to 2022.

A Criminal Justice Council report released Wednesday indicated that shoplifting is on track to increase from 2023 to 2024 in a sample of 23 cities. The three largest cities of New York, Los Angeles and Chicago have more thefts than before the Covid-19 pandemic.

Monthly Average Rate per 100,000 population column chart showing that shoplifting tends to increase during the holiday season

Some merchants said efforts to reduce theft are paying off. Richard McPhail, Home Depot’s chief financial officer, said last week: “This is a problem for all of retail. It’s hard to quantify. What we can tell you is that our investments are paying off.”

Walmart, the largest US retailer, said on Tuesday that its outlook for the decline had become “a bit better in the US” than it had anticipated at the start 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 reinstated the felony status of repeat theft after a decade of classifying it as a felony. As a candidate, President-elect Donald Trump said shoplifters should be shot.

Retailers have responded with new ways to deter shoplifting. Many depend on electronic surveillance.

Security cameras are now equipped with computer vision, which can pick up clues such as suspicious walking or shelf sweeping, according to Coresight, a research company.

Cameras in Home Depot store parking lots are now capable of scanning not only license plates, but also colors, scratches and dents on individual vehicles. The technology can notify the company when a car arrives related to suspected thefts at other stores.

Scott Glenn, Home Depot’s vice president of asset protection, said, “We did low-tech things like securing the product behind the cages. We have added locking carts to our stores so that people cannot easily carry a lot of merchandise from our store. We have added camera packages, public viewing monitors, off-duty policy officers and security guards in our stores.”

“And then there’s a whole range of behind-the-scenes technologies that I won’t go into too much because they’re a bit of a secret sauce,” he added.

As retailers have installed self-checkout kiosks to save money at the checkout, some have also experienced an increase in stolen merchandise. Discount chain Dollar General is removing self-checkout lanes from most of its 20,000 stores to combat the contraction.

But the retail industry has gotten wise to self-checkout tricks, such as transferring the barcode sticker from an inexpensive item to an expensive one, and has now installed more sophisticated scanners at self-checkouts.

David Wilkinson, chief executive of NCR Voyix, which provides self-checkout and point-of-sale technologies to retailers including Walmart and Target, said: “I can tell the difference between a packet of Kool-Aid and a T-bone steak even if you took the barcode off the Kool-Aid package and tried to scan a steak over it.

A security guard patrolled a Target store in Miami Beach, Florida
A security guard patrolled a Target store in Miami Beach, Florida © Jeffrey Greenberg/Universal Images Group via Getty Images

Checkout rooms also target customers. “We find there’s a psychological impact of knowing you’re being watched,” Wilkinson said in an interview earlier this year.

Some retailers have adopted facial recognition technology to identify visitors suspected of theft or other crimes in the past. FaceFirst, a Texas-based provider, said its algorithm “can find every recent instance of that person entering all of your locations. The result? A human investigation with advanced confirmation (artificial intelligence) that calculates past losses, plus time-stamped evidence, packaged for law enforcement agencies and prosecutors.”

The technology has attracted resistance. A third of American consumers surveyed by Coresight said they would shop less often or avoid shopping at a store whose cameras were equipped with facial recognition software. A federal regulator last December barred Rite Aid from using facial recognition for surveillance purposes for five years after accusing the drugstore chain of falsely accusing customers of wrongdoing based on erroneous matches .

“Facial recognition is a very powerful surveillance technology,” said Jeramie Scott, senior counsel at the Electronic Privacy Information Center. “And when retailers implement this with their customers and employees, you lose your anonymity and control over your identity. Now you can be connected not only to the store you enter, but also to the things you look at, who you are with. . . Every action in a store becomes a potential data point for control and analysis.”

Ernesto Lopez, a senior research specialist at the CCJ, said it’s not surprising that some retailers would point to a smaller decline, even if reported shoplifting rates rise.

With new technologies being implemented to stop shoplifting, “there could be an increase in detection,” he said.