Anti-theft measures in big retail stores such as CVS and Walgreens are ‘backfiring’ and can cause sales to plummet, according to a tech CEO.
Joe Budano, CEO of anti-theft company Indyme, said that locking away items in stores can cause sales to drop by between 15% and 25%, according to Axios.
He added that while the measures are in place to deter crime, only around 2% of customers are estimated to be involved in theft.
More: Costco to crack down on membership card sharing with new card scanning system
“To protect yourself against 2% is bad math,” the CEO said.
This comes as the outlet also reported that the global chief financial officer of Walgreens, Manmohan Mahajan, said in an earnings call in June of this year that the company was experiencing “higher levels of shrink”.
The anti-theft measures, which include products locked in glass cabinets, have generally ‘backfired’ and have harmed shopping in the US, according to a report from Bloomberg.
Neil Saunders, a retail analyst at GlobalData, said that it has had a negative impact on customers, pushing more people to shop online.
“Locking up products worsens the shopping experience, and it makes things inconvenient and difficult,” he told Axios.
Similarly, the outlet reported that Amazon CEO Andy Jassy echoed this message in an investors call this month.
“It’s a pretty tough experience with how much is locked behind cabinets, where you have to press a button to get somebody to come out and open the cabinets for you,” he is reported to have said.
However, representatives from retailers including CVS and Walgreens defended their use of cabinets to Axios.
A CVS Spokesperson said that “product protection decisions are data driven” and are “a measure of last resort”.
Meanwhile, a Walgreens spokesperson said that the measures were in place “to deter theft and ensure safety and security in our stores”, also adding that the decisions were led by data on theft.
Organised retail theft remains a large source of loss for companies, the National Retail Federation’s 2023 security survey indicating that it was responsible for $112.1 billion in losses.
