You may have seen the footage. Shoplifters, their shopping bags filled with stolen merchandise, walk out of a store while employees watch helplessly. Or a Walmart store in Chicago in shambles after shoplifters went on a stealing spree.
Walmart CEO Doug McMillon estimates the recent wave of shoplifting is costing retail stores more than $94 billion. He told FOX Business that the losses in the industry, along with the extra security measures to counter the crime wave, could lead to price increases for consumers.
Many retailers have instructed employees not to interfere with shoplifters, fearing violent incidents and lawsuits. As a result, Walmart has closed four stores in Chicago that were particularly hard hit. Walgreens has taken the extreme step of limiting customer access to merchandise in two Chicago stores by putting all merchandise, except on two aisles, behind lock and key.
Michael Allmond, vice president and co-founder of Lover’s Lane, a Midwest retailer, isn’t sure there is much that can be done to stop thieves.
"Physical barriers and narrowing store access might help in the short term, but the creativity of theft really knows no bounds,” Almond told ConsumerAffairs. “One reason there has always been a large emphasis on selling online is the lack of the threat of shoplifting.”
The retail experts we consulted expect the crime wave to result in higher prices for consumers, though some suggest retailers will try to limit price increases for competitive reasons.
“When significant losses occur due to theft, retailers often try to absorb those losses through various means before considering passing them on to consumers through higher prices,” said Jerry Thurman, customer service manager at Hamiltondevices.com.
Linda Johansen-James, the founder and CEO of International Retail Group, a retail management and consulting firm, says large retailers like Target have factored “shrinkage,” the loss of inventory to theft, into their price models. It’s already baked into the price consumers pay.
“As such, many retailers will resort to several other measures to mitigate a major loss of inventory before resorting to a rise in prices,” she told us. “Retailers would typically invest in better security systems, improve loss prevention measures and enhance security measures prior to trying to raise prices.”
But Jeanel Alvarado, CEO at RetailBoss, believes the losses experienced by Target – $500 million a year – are significant enough to require price adjustments that consumers could see within a few months.
“The decision by Walgreens is an extreme measure they have taken to try and counter theft,” Alvarado said. “While this approach may not be the best approach for other retailers, it is possible that some may consider similar steps if they face significant theft issues. However, retailers must also weigh the potential negative impact on customer experience and sales.”
Keith Carpentier, of Qbuster, a tech-focused retail solutions provider, expects to see more retailers following Walgreen’s example, especially if rampant theft continues. He says different retailers might approach it differently, however.
“I wouldn't say extreme measures to reduce access to merchandise will be across the board, but companies will have to consider how this is going to impact them long term,” Carpentier told us. “They'll need to find solutions that fit for protecting their merchandise while providing their customers with a safe and efficient shopping experience.”
What can retailers do?
Landon Winkelvoss, co-founder of Nisos and vice president of Intel Research, works in a firm that helps companies deal with risks. To solve this problem, he says retailers must understand who they’re dealing with and how they operate.
“In today’s digital world, shoplifting can be an organized group effort that navigates to cyberspace and platform marketplaces to resell stolen goods,” he told ConsumerAffairs. “Recently we have seen retailers who have publicly expressed positions on social or environmental issues targeted by coordinated thefts. These criminal activities are orchestrated online - on social media, closed forums, and deep and dark web forums.”
While current options may seem limited, he says robust monitoring, identifying and thwarting these plans either before they are put in motion or during the subsequent resale,” could over time, reduce the attacks.