Shoplifting in the US is on the rise despite new surveillance

Body cameras on security guards greet shoppers at TJ Maxx. Customers in Walmart’s beer aisles can watch themselves on overhead video monitors. Drugstore visitors find toothpaste locked behind plexiglass.

They have all become part of the US retail landscape as the costs of shoplifting and more aggressive forms of theft have risen tens of billions of dollars per year. But even as retailers deploy high-tech eavesdropping techniques in an effort to win the war against shoplifting, new evidence suggests they are losing.

Theft has created a complex set of problems for American retailers: disappearing products reduce sales and add to the costs of insurance and extra security measures. A 2023 industry study found that external theft was responsible for 36 percent, or $40 billion, of so-called shrink, a measure of inventory losses.

Frustration over locked-up merchandise is also causing shoppers to flee stores, with nearly a fifth of store customers who encounter such goods choosing to shop online, according to Numerator, a market research firm.

The most commonly stolen items are often those that are easy to put in your pocket or that are lucrative to collect: cosmetics and deodorant at drugstores, or power tools at DIY stores.

Target said earlier this year that shrink costs increased by more than $500 million in 2023 compared to 2022.

A report from the Council on Criminal Justice released Wednesday shows that shoplifting is on track to increase between 2023 and 2024 in a sample of 23 cities. The three largest cities of New York, Los Angeles and Chicago all have higher shoplifting rates than before the Covid-19 pandemic.

Some retailers say efforts to combat theft are paying off. Richard McPhail, Home Depot’s chief financial officer, said last week: “This is a problem for the entire retail industry. It’s hard to quantify. What we can tell you is that our investments are paying off.”

Walmart, the largest U.S. retailer, said Tuesday that its shrink outlook has become “a little better in the U.S.” than expected at the start of the year.

Retail theft has become a prominent social issue as shoppers face closed store shelves and videos of brazen theft circulate on social media. California voters this month restored criminal status to repeat shoplifting after a decade of classifying it as a misdemeanor. As a candidate, President-elect Donald Trump said shoplifters should be shot.

Retailers have responded with new ways to combat shoplifting. Many rely on electronic surveillance.

Security cameras are now equipped with computer vision, which can pick up signals such as a suspicious gait or plank movements, according to research firm Coresight.

Cameras in the parking lots of Home Depot stores can now scan not only license plates, but also the colors, scratches and dents of individual vehicles. The technology can alert the company to the arrival of a car tied to suspected thefts at other stores.

Scott Glenn, Home Depot’s vice president of asset protection, said: “We’ve done low-tech things like securing products behind cages. We’ve added lockable carts to our stores so people can’t just carry a lot of items out of our store. We have added camera packages, audience monitors, off-duty policy officers and security guards in our stores.”

“And then there’s a whole bunch of behind-the-scenes technologies that I’m not going to get too much into because they’re a bit of a secret sauce,” he added.

As retailers have installed self-checkout kiosks to save money on cashiers, some have also experienced an increase in stolen goods. Discount chain Dollar General is removing self-checkouts from most of its 20,000 stores to combat shrinkage.

But the retail industry has gotten wise to self-checkout tricks, such as transferring the barcode sticker from a cheap item to an expensive one, and has now installed more advanced scanners at self-checkout.

David Wilkinson, CEO of NCR Voyix, which provides self-checkout and point-of-sale technologies to retailers including Walmart and Target, said: “I can even tell the difference between a pack of Kool-Aid and a T-bone steak. if you took the barcode off the Kool-Aid package and tried to scan a steak across it.

Cash register cameras are also aimed at customers. “We find that there is a psychological impact when you know you are being watched,” Wilkinson said in an interview earlier this year.

Some retailers have embraced facial recognition technology to identify visitors suspected of theft or other crimes in the past. FaceFirst, a Texas-based vendor, said its algorithm can “find every recent instance of that person entering all your locations. The result? A human investigation with advanced (artificial intelligence) corroboration that calculates past losses, plus date and time stamped evidence, packaged for law enforcement and prosecutors.”

The technology is causing resistance. A third of U.S. consumers surveyed by Coresight said they would shop less often or avoid shopping at a store whose cameras were equipped with facial recognition software. A federal regulator last December banned Rite Aid from using facial recognition for surveillance purposes for five years after the drugstore chain was accused of falsely accusing customers of misconduct based on faulty agreements.

“Facial recognition is a very powerful surveillance technology,” said Jeramie Scott, senior counsel at the Electronic Privacy Information Center. “And when retailers use this with their customers and employees, you lose your anonymity and control over your identity. Now you can be connected not only to the store you visit, but also to the things you look at and who you are. . . Every action in a store becomes a potential data point for research and analysis.”

Ernesto Lopez, a senior research specialist at CCJ, said it’s not surprising that some retailers would point to lower shrink even as reported shoplifting increases.

As new technologies are deployed to stop shoplifting, “the number of detections could increase,” he said.