Costco’s CEO Speaks Out Against Self-Checkout Theft

During an earnings call on Thursday, Costco's Chief Financial Officer (CFO), Richard Galanti, expressed the company's positive position regarding theft.

During an earnings call on Thursday, Costco’s Chief Financial Officer (CFO), Richard Galanti, expressed the company’s positive position regarding theft.

Costo “Fortunate” With Inventory Shrinkage

Galanti stated that Costco has been “fortunate” in this regard, as they haven’t observed any significant changes in shrinkage, a term used to refer to theft and other inventory losses in the retail industry.

Addressing concerns raised by some stakeholders, Galanti highlighted that other companies had reported higher levels of shrink, prompting inquiries about Costco’s situation.

He explained, “The word ‘shrink’ refers to theft and other inventory loss relating to retail. It fluctuated a couple of three basis points up really before COVID as we rolled out self-checkout and, since then, it’s come back down a little, and it’s in a very tight range.”

Galanti emphasized the company’s satisfaction with its shrinkage rates, stating, “We’ve been fortunate in that regard.”

Shrinkage Rates Below Typical Retail Operations

Costco, known for its generous product offerings, has previously claimed that its theft rates are “well below those of typical retail operations.”

The company attributes stringent control because of entryways and its requirement for memberships.

Recent reports highlighted a surge in retail theft across multiple major retailers, leading to increased security measures.

With nearly 40 percent of checkout lanes now being self-service, theft is a big concern.

In Georgia, officials have cautioned shoppers about the consequences of “skip scanning,” which involves failing to scan and pay for items through various methods, like altering barcodes or secretly putting items in shopping bags.

Walmart Increases Surveillance

These rising theft incidents have left some shoppers wary of using self-checkout machines. A TikTok video shared by a user named Aubrey (@tht.slowsubi) displayed a Walmart security camera feed tracking customers via colored motion sensors, indicating the retailer’s increased vigilance.

Overall, Costco remains optimistic about its theft rates, noting minimal changes in shrinkage and attributing its success to rigorous control measures.

As retail theft continues to be a concern across the industry, other retailers are stepping up security to combat the rising trend of in-store theft.

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