Many of us have become abundantly aware of the shoplifting pandemic that has become all too prevalent here in the U.S.
It seems to have started around the time of COVID-19 and has steadily ramped up to where it is at present day, with stores losing millions every single year. However, one store that’s not feeling the sting of all this shoplifting is the retail giant Costco, and they’re sharing the real reason why this doesn’t seem to be an issue for them.
Inventory losses may be crippling the competition, but, DailyMail.com reveals, Costco Chief Financial Officer (CFO) Richard Galanti told investors during a Tuesday quarterly earnings call, “Thankfully, it’s not a big issue for us.”
Following the call, Galanti told the outlet that Costco’s current rate of inventory loss is roughly ten times lower than the industry average.
So, what makes Costco stand apart?
Galanti noted that only those members who pay a fee can enter the retail warehouses, and their identities are confirmed.
“You have to show your picture ID when you come into our warehouse so the fact that it’s member-only is a positive,” he told DailyMail.com.
The design of the warehouses also helps to keep thieves at bay.
“We’ve always had one way in and one way out and people checking receipts at the door,” he said.
“[B]y strictly controlling the entrances and exits and using a membership format,” Costco stated in its 2022 financial year summary report, those inventory losses were kept “well below those of typical retail operations.”
It’s also hard to stuff items down the front of your pants or in a purse when many of the items are sold in bulk.
“Many items are larger-sized items and when you have smaller, larger value items they’re in packaging that is much bigger,” Galanti explained.
It definitely makes sense when you put it into layman’s terms like that.
Honestly, you won’t see many thieves stuffing an industrial-sized jar of mayo down their pants and running out the door.
Looks like Costco has a brilliant business model, yet again.