Anti-theft tech CEO admits locking up items causes sales to plummet as extreme measures at CVS and Walgreens ‘backfire’

A TECH CEO has confirmed shoppers are not happy with locked-up items at stores.

The anti-theft measure is “backfiring” on retailers, with more consumers making their purchases online.

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Joe Budano, CEO of anti-theft technology company Indyme, told Axios that locking up items can lead to sales drops of 15% to 25%.

Though the extreme method is meant to deter crime , Budano estimated that 98% of people in stores are “legit customers” and 2% are some type of offender.

“To protect yourself against 2% is bad math,” said Budano, whose company made the “Freedom Case,” a locked display customers can open with their cell phones.

GlobalData retail analyst Neil Saunders said barricading items has had a negative impact on consumers.

“Locking up products worsens the shopping experience, and it makes things inconvenient and difficult,” he said, per Axios .

Saunders added that the anti-theft measure encourages customers to shop online.

During a call with investors in August 2024, Amazon CEO Andy Jassy spoke of the “speed and ease” of ordering online rather than shopping at pharmacies in-store, Axios reported.

“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 said.

Barricading products from razors to laundry detergent has largely “backfired” and harmed US shopping, Bloomberg reported.

Big-name retailers such as Target , Walmart , Walgreens , CVS , and Dollar Tree have taken part in the anti-crime-method-gone-wrong.

Despite reports of sales drops and customer dissatisfaction, some stores defended their lock-up technique to Axios.

CVS spokesperson Amy Thibault told the outlet that the retailer uses “a variety of different measures to deter or prevent theft and locking a product is a measure of last resort.”

She continued, “Different products experience different theft rates, depending on store location and other factors, and our product protection decisions are data driven.”

Walgreens spokesperson Fraser Engerman told the publication, “Actions like installing anti-theft devices are to deter theft and ensure safety and security in our stores.”

Anti-theft measures rolled out by retailers

Retailers across the US and Canada have rolled out strategies designed to combat theft. The U.S. Sun has compiled a list of measures that have been implemented at stores.

• Locking items in cabinets.
• Security pegs.
• Security cameras.
• Signs warning about the impact of theft.
• Receipt scanners.
• Receipt checks.
• Carts with locking technology

Engerman continued, “These steps are taken in response to theft data and for that reason only, and these additional security measures allow us to improve on-shelf availability of products to customers.”

Though it may prevent theft, barricading items does not seem to have saved these retailers money .

Manmohan Mahajan, the global chief financial officer of Walgreens, said in a June 2024 earnings call that the company was experiencing “higher levels of shrink,” per Axios.

However, theft has still been a large issue for retailers.

CRIME TIME

In 2022, retail crime was responsible for $112.1 billion in losses, according to the National Retail Federation’s 2023 security survey .

Organized retail crime has caused massive losses for companies.

This involves gangs of thieves taking items from stores that they resell online, which “has become increasingly brazen,” per Axios.

Though crime is clearly an issue, not everyone agrees on its severity, and some have wondered if stores have used theft as a “scapegoat” for other problems.

When speaking about theft in a January 2023 earnings call, then-Walgreens CFO James Kehoe said, “Maybe we cried too much last year,” CNBC reported.

“We’re stabilized.”

He added that Walgreens was “quite happy with where we are.”

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