Costco checks receipts in order to cut down on theft, a strategy that has afforded the retailer the benefit of having the lowest shrink rates in the industry.
Costco’s dedicated customer base will happily drive long hours to shop at the nearest warehouse. When they pay their annual membership fee, they agree to several unique shopping experiences. One of those is the news that you need to wait in line to have your receipt looked over by a team member before you head out the door with your haul.
Whether you are new to the Costco experience or have been a long-time member, you may wonder about this practice. After all, you just finished checking out with another team member. So, why the extra step?
The Daily Meal took a peek at Costco’s website to try and find the answer to this question. And according to the company’s site, it is standard practice at every location. It helps to identify any mischarges and verify purchases.
But those aren’t the only reasons. Trying to steal a bulk purchase is difficult, just not impossible. So team members compare the number of scanned items against the number of items in each cart.
They are used to quickly glancing over large purchases since shoppers spend approximately $100 per Costco trip on average. Additionally, the once-over on the receipt lets team members check a unique daily code printed on the top.
That code ensures customers cannot try to come back through with an older receipt in an attempt to scam the system. On top of that, those manning the exits are looking for a few additional items. One is a supervisor verification for any bulky or big-ticket purchases.
It may feel excessive for a company with controlled entries and exits, especially when only members can shop. But these strict policies clearly work. Costco has the lowest shrink rate in the industry, which is great news for the retail giant..
National Retail Federation collected data on shrink rate in 2018. They found that the industry average sat at 1.33%. However, Costco’s numbers are much lower.
In 2021, the company reported a shrink rate of only 0.12%. Chris Galanti, Costco’s Chief Financial Officer, attributed the low number to the company’s strict policies. According to The Daily Meal, “in the brand’s 2021 annual report, Costco attributed its low shrink rate to its members-only method and the retailer’s strategic layout of only one controlled entrance and exit at every location.”
Of course, another factor contributing to the low shrink rate is the company’s dedicated employees. Those who work at Costco simply love what they do. They have over 12,000 employees with at least 25 years of tenure.
So, despite the occasional long-line often filled with tired adults and bored and hungry kids, the wait is worth it. The low shrink rates help the company keep overall costs down. And that news makes customers so happy that they continue to spend heavily at Costco.
The warehouse retailer has approximately 118 million members worldwide. And at the end of 2021, Costco saw a 17% boost in sales. Clearly, something is working.
If you hope to skip a lengthy exit, consider shopping during off-peak hours. Not only will you avoid carts blocking every aisle, but getting in and out is a breeze. And if you have yet to give Costco a shot, reconsider – you may be pleasantly surprised.