“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.” In Costco’s 2025 annual report, that line reads like routine corporate language. In practice, it describes a retail system that has turned theft prevention into part of the shopping trip itself.
While many chains have responded to rising losses with locked shelves, added guards and shorter hours, Costco’s approach begins before a cart reaches the sales floor. Entry is limited, membership is checked, and in many warehouses cards are scanned and matched to photo identification. The result is simple: anonymity is harder to maintain in a store built around paid access and tightly managed movement.
The contrast matters because retail theft has become expensive and disruptive across the industry. The National Retail Federation said shrink averaged 1.6% across surveyed retailers, representing $112.1 billion in losses. Among retailers tracking organized retail crime, incidents rose by an average of 57% from 2022 to 2023. Some chains have tied theft pressure to store closures, and shoppers have increasingly encountered everyday goods placed behind barriers.
Costco’s numbers have looked different. Former CFO Richard Galanti told investors the company’s shrink rate was roughly 0.1% to 0.2%, far below the level often cited in big-box retail. That gap is one reason Costco’s receipt check, often seen by shoppers as a final inconvenience, carries more weight than it first appears.
The receipt check does more than signal oversight. According to Costco’s own explanation, it helps confirm purchases were processed correctly, reducing cashier error as well as loss. That detail is easy to miss, but it helps explain why the system feels less like a single anti-theft tactic and more like an operational checkpoint. One step reinforces another: a controlled entrance narrows who gets in, staffed checkout narrows how items are rung up, and a monitored exit narrows how merchandise leaves.
Store design strengthens the effect. Costco’s warehouses typically funnel customers through limited access points, cutting down on blind spots and improvisation. The merchandise itself helps. Oversized bulk packs and pallet displays are harder to conceal than the smaller, higher-value goods that fit more easily into a jacket, tote or stroller. Even the chain’s selective use of self-checkout reduces openings for missed scans and deliberate under-ringing.
That matters in a theft landscape that no longer centers on isolated shoplifting. Retail groups and banking industry publications have described organized retail crime as a multibillion-dollar enterprise built on teams, resale channels and logistics. The online marketplace has made that pipeline more scalable, although laws such as the INFORM Consumers Act were designed to make high-volume sellers easier to identify.
Competitors have taken more visible routes. Target said theft and organized retail crime contributed to closing nine U.S. stores in 2023 after investing in guards, deterrent tools and locked merchandise. Costco, by contrast, built much of its deterrence into the ordinary rhythm of shopping.
That does not make the model frictionless. Membership checks and exit lines have drawn complaints from shoppers and frontline staff. But the broader lesson remains clear: when identity, layout and checkout control are built into the business rather than layered on after losses mount, theft becomes harder to scale without turning the store into a maze of locked cabinets.
