Locked up and losing out

Walgreens and retailers are dealing with a delicate balancing act between securing goods from theft while ensuring that security measures don’t drive customers away. Recent insights from Walgreens and the National Retail Federation (NRF) illustrate the complexity of this issue and highlight strategies retailers are employing to address it.

Facing a 52% increase in stolen inventory, Walgreens resorted to locking up a wide range of products. However, as CEO Tim Wentworth noted during a January earnings call, this approach backfired. Locked merchandise deterred potential thieves, but it also alienated customers, reducing overall sales. The company reported a significant operating loss of $245 million for the quarter and is now seeking new solutions to combat theft without shedding customers.

This tension is not unique to Walgreens. A 2024 NRF report reveals a staggering 93% increase in shoplifting since 2019, with organized retail crime becoming more sophisticated. Groups of thieves, often working together, target high-value items with greater frequency, forcing retailers to implement stringent security measures. However, these measures, such as locking up products, using electronic tags and hiring additional security, can negatively impact the customer experience. According to the NRF, 76% of retailers acknowledge that their antitheft strategies have adversely affected how shoppers perceive their stores.

A key challenge lies in tailoring security measures to individual store environments and product categories. High-theft items like cosmetics, over-the-counter medications and electronics are often secured with locks or tags, or are completely removed from sales floors. Yet, the broader impact of these measures, including longer wait times for assistance and reduced convenience, can deter customers from making purchases altogether.

In response, retailers are increasing their budgets for advanced security technologies, including shopping cart locks, receipt-checking systems and AI-driven surveillance. These tools help monitor theft without significantly disrupting the shopping experience. However, the technologies are a significant investment and must include ongoing adaptation as criminals learn how to get around them.

Focusing on customer engagement has shown promise to deter theft. Strategies such as greeting customers, offering assistance and maintaining a visible staff presence in high-risk areas not only discourages theft but enhances customer satisfaction overall.

Learn more about retailers’ concerns with the security of their products in the NRF study on retail theft and violence.

Overhaul fighting the good fight 🥊

Risk management platform Overhaul has raised $55 million in equity funding this week, led by Springcoast Partners with participation from Edison Partners and Americo. The funds will support strategic acquisitions and enhance the company’s proprietary AI technology, including its work fighting freight fraud.

Headquartered in Austin, Texas, Overhaul monitors over $1.4 trillion in global freight movements, helping shippers and 3PLs address challenges like cargo theft, delays and damage. CEO Barry Conlon emphasized the funding’s role in solidifying Overhaul as a market leader, especially as the supply chain technology sector braces for increased consolidation over the next two years.

In tandem with the funding announcement, Overhaul unveiled FraudWatch (great name choice), a solution to combat the growing threat of freight fraud. Designed to tackle fictitious pickups, double brokering and carrier identity theft, FraudWatch uses AI-powered scoring and real-time data to flag high-risk activities before they disrupt operations.

Freight fraud has surged, now accounting for 35% of cargo theft incidents, according to the Transportation Intermediaries Association. Losses to fraud cost U.S. logistics companies an average of $402,000 annually. States like California, Texas and Illinois report the highest rates of incidents.

FraudWatch provides shippers and logistics providers with actionable intelligence, instant alerts and seamless integration into existing workflows. By leveraging insights from law enforcement networks, the platform also helps identify organized theft rings. The solution has saved clients over $100 million in potential losses, according to the company.

Lime crimes 🚨

Customs and Border Protection officers at Texas’ Pharr International Bridge intercepted 870 pounds of methamphetamine hidden in a shipment of Persian limes, valued at $7.7 million.

Using advanced inspection tools, officers uncovered 357 packages concealed in a tractor-trailer from Mexico. The drugs and vehicle were seized, and Homeland Security Investigations has launched a criminal probe.

Learn more about the creative ways drugs are smuggled into the U.S. through food products here.