redesignAnswer: The tab is broken because I waited 15 minutes for “service” and gave up

Cable with tag torn


The tab on this cable is broken because it was locked to the peg. There was a customer service button to press; I pressed it. A store clerk walked by but didn’t have the key; I asked her to find someone who did. 15 minutes later, I gave up and ripped off the tab. (I did pay for the merchandise.)

But most consumers wouldn’t wait more than 2 minutes. So this “security” measure deters sales.

It also doesn’t deter theft! If someone wants to steal it, they can just do what I did. Another alternative is to pull the peg entirely out of the peg board and remove it from the back.

So you’ve made it hard for legitimate customers to buy the product while only adding a speed bump for thieves.

This is also a case where the maxim about letting your data make your decisions falls flat. Such analysis ignores what you can’t measure. In this case, it is lost sales. You can measure theft — number of units put on display minus number sold. Measuring opportunity cost — the units you didn’t sell because people didn’t want to wait — is harder. (Though it can be done.)

Opportunity cost in this case is especially high because this a high margin product. Every lost sale hurts more than every theft.

Of course, Walgreen’s could improve service levels so that someone would actually come and unlock the product. But that requires more staffing.

Another answer, which Sam came up with, is that the item was on a peg with assorted merchandise. Rather than slide everything out to get to the one she wanted in back and then slide everything back on, she’d just rip the tab for the one she wanted.