While retail giants struggle with billions in shoplifting losses, Costco stands out with a unique strategy to curb theft.
Costco's 2025 annual report highlights how its membership model and strict control over store access have kept inventory losses significantly below the retail industry average.
This achievement comes as US retailers reportedly lost over $47 billion to shoplifting in 2025. National Retail Federation data shows shoplifting incidents surged 93% from 2019 to 2023, with dollar losses up 90% over the same period.
According to the Daily Mail, Costco's approach relies on limited entrances and exits, membership checks, and receipt verifications at store exits. These measures, according to the company, create a controlled shopping environment.
In its 2025 report, Costco stated, "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." This disciplined system sets it apart from competitors facing rampant theft.
Richard Galanti, then CFO of Costco, reinforced this during a 2023 earnings call. He told investors, "Thankfully, it's not a big issue for us."
Costco's membership model isn't just about security; it’s a financial win for members too. A standard Gold Star or Business membership costs $65 annually, while an Executive membership is $130 with perks like 2% cashback on most purchases and early shopping hours.
Galanti also noted the company's historical success in managing shrinkage. He said, "Our shrinkage has historically been low, and we've gotten better with time." Costco’s theft rate, sitting between 0.1 and 0.2 percent per Galanti, is roughly ten times lower than the retail industry average. Losses today are also less than half of what they were roughly 30 years ago.
The broader retail sector hasn’t been as fortunate, grappling with a high-profile cargo theft in late 2025 involving a hijacked $400,000 shipment of live lobsters. Such incidents underscore the scale of the challenge for many retailers.
Companies like Target, Walgreens, Whole Foods, and Nordstrom have pointed to retail crime as a factor in store closures. Yet, Costco seems to defy this trend with its structured approach.
The issue of retail theft has sparked intense debate among industry watchers and policymakers. Many argue that lax enforcement and economic pressures fuel the surge in shoplifting, burdening businesses and consumers alike.
For investors, Costco remains a bright spot with shares up over 13% year-to-date in early 2026, rebounding from a dip in 2025. January sales growth of 7.1% further signals resilience.
Why does this matter to you? Retail theft inflates prices across the board, but Costco’s model shows efficiency can protect margins and customers. If you’re building wealth, consider how disciplined systems—whether in business or personal finance—yield long-term gains.
Costco’s story is a lesson in free-market innovation outpacing industry woes. Stick to companies with proven strategies, and apply the same rigor to your portfolio—control risks, limit losses, and prioritize value like a membership card at the checkout.