Evaluating the Effects of EAS on Product Sales and Loss: Results of a Large-Scale Field Experiment

Abstract

Retailers and suppliers suffer large sales losses because certain popular and profitable (key) merchandise items are lost and chronically unavailable for customer purchase. A combination of poor item handling, process design, and/ or execution, as well as theft, creates item loss and low on-shelf availability. Further, merchandise losses tend to cluster by item, location, and time. Retailers attribute a large part of key item loss to self-use (non-expert) shoplifting, and deploy electronic theft control systems, such as hidden electronic article surveillance tagging (EAS), to help deter sales floor theft. Earlier studies report on the efficacy of EAS on item loss, but the studies looked at visible tags and often suffered from relatively weak designs. This paper discusses a 21-store quasi-experimental field test of several hypotheses derived from retailer assumptions about the effects of hidden EAS tags on key item losses, shelf availability, and store sales. Results of the investigation indicated that source-tagged EAS did not reduce item loss, increase item on-shelf availability, or increase item store-level sales in the test (EAS protected) stores at a greater level than was found in the non-EAS control stores (using differences of differences analysis). Explanations for the lack of hidden EAS tag efficacy are explored and include suggestions for improving EAS impact.