Retail theft has become expensive enough to reshape how stores feel to shop in. Across the industry, retailers have responded with locked cases, reduced access, and heavier friction around everyday purchases. Costco has taken a different route. Instead of layering anti-theft tools onto a standard store model, the warehouse chain built deterrence into the trip itself: entry is controlled, movement is channeled, and departure is checked in plain view. That design matters because it reduces the anonymity that often makes theft easier to attempt and harder to trace.
Costco described the system plainly in its 2025 annual report: “By strictly controlling the entrances and exits and using a membership format, we believe our inventory losses are well below those of typical retail operations.” What reads like routine corporate language points to a wider operating advantage. Shoppers typically pass through limited access points, show a membership card tied to an identity, and face a final receipt check before leaving. In many warehouses, entry now involves card scanning, making borrowed or shared access harder to slip through unnoticed.
The numbers help explain why that routine has attracted attention. Former Costco finance chief Richard Galanti told investors, “Thankfully, it’s not a big issue for us,” while placing shrink at 0.1% to 0.2%. That stands far below the 1.44% national average cited from retail industry data in earlier coverage. More broadly, U.S. retail losses reached nearly $112 billion in 2023, showing how costly shrink has become even before stores account for staffing strain, security spending, and customer frustration. Industry researchers have also linked the rise in theft to a post-2019 surge, with organized retail crime adding pressure through coordinated stealing and resale networks. That is where Costco’s format becomes harder to copy than it first appears.
Its stores are built like warehouses, with bulky packaging, pallet displays, and fewer convenient escape routes. Those physical details make concealment more difficult than in stores filled with small, easy-to-pocket goods. Checkout also remains more supervised than at many chains that expanded self-checkout aggressively, limiting some of the scan avoidance and cart-based losses that have spread elsewhere. Receipt verification at the exit serves two purposes at once: it catches errors and raises the risk of walking out with unpaid merchandise in a highly visible space.
Reference data suggests the pressure on retailers is not likely to ease. One 2025 consumer survey covering more than 2,000 U.S. consumers found a growing share admitted to intentional theft, often citing financial strain. That does not turn theft into a simple story about need. It shows why retailers are shifting from after-the-fact investigation toward prevention built into layouts, staffing, and exits. Costco’s model fits that logic without turning every aisle into a locked cabinet.
The approach is not friction-free. Entry scans and exit checks have drawn complaints from some shoppers, and workers have described tense encounters over enforcement. Even so, the system has held because it supports the chain’s broader structure rather than interrupting it. In a retail climate where stores are trying to stay open without making shopping feel hostile, Costco’s quiet advantage is less about a gadget than a format: fewer blind spots, more traceable access, and a checkout path that is difficult to bypass.
