Lowe's Combats Theft With Blockchain & RFID

[Alpha8472]

Lowe's is using low cost RFID chips to track items in the store as well a a blockchain system. They are selling power tools that have to be activated at the checkout before you can use them.

https://chainstoreage.com/lowes-combats ... chain-rfid

[storewanderer]

Didn't Home Depot do this months ago? I guess it worked so now Lowe's is getting on board.

[Super S]

I have reservations about products like this that have to be electronically activated. It seems like these chips or whatever have the potential to malfunction over time, and if one of these malfunctions in a power tool just outside of warranty, are they going to be able to "re-activate" the tools, or are people stuck with having to buy new ones? What if these chains go out of business? It seems like the potential is there for a retailer to design these to stop working after a period of time.

It might be worth paying a little more at a smaller retailer.

It is sad that theft has gotten this bad though.

[ClownLoach]

I have reservations about products like this that have to be electronically activated. It seems like these chips or whatever have the potential to malfunction over time, and if one of these malfunctions in a power tool just outside of warranty, are they going to be able to "re-activate" the tools, or are people stuck with having to buy new ones? What if these chains go out of business? It seems like the potential is there for a retailer to design these to stop working after a period of time.

It might be worth paying a little more at a smaller retailer.

It is sad that theft has gotten this bad though.

Blockchain ensures that this is not going to be an issue of linking a device to a retailer. It is basically going to create a public record of each serial number so that anyone can verify it was legitimately paid for and can download the activation key. There would probably be some kind of app that could reactivate the tool if somehow it was needed again, you would probably have to tap your phone to the tool but anyone could enter the serial number and the activation code is publicly visible. Sounds a lot more secure than what Home Depot wanted to do which used Bluetooth. The issue I see is that the criminals will move back to more sophisticated credit card fraud, bad checks, whatever they need to get these "paid for" so they're activated at the register. No way I can see that they can deactivate later. So if someone bought a cartload of tools with a stolen credit card they would still work and this Blockchain would still show legitimately paid for.

[storewanderer]

Blockchain ensures that this is not going to be an issue of linking a device to a retailer. It is basically going to create a public record of each serial number so that anyone can verify it was legitimately paid for and can download the activation key. There would probably be some kind of app that could reactivate the tool if somehow it was needed again, you would probably have to tap your phone to the tool but anyone could enter the serial number and the activation code is publicly visible. Sounds a lot more secure than what Home Depot wanted to do which used Bluetooth. The issue I see is that the criminals will move back to more sophisticated credit card fraud, bad checks, whatever they need to get these "paid for" so they're activated at the register. No way I can see that they can deactivate later. So if someone bought a cartload of tools with a stolen credit card they would still work and this Blockchain would still show legitimately paid for.

There needs to be a way to deactivate later for those types of situations. Luckily I am finding the fraud patterns on the credit cards detect those large/unusual transactions more and more often and decline them on the spot. The stores are still being paid as long as a Chip card is used and processed via the Chip. It is unfortunate these stores are not allowed to outright deny swipe cards except in the case of gift cards (and if a swipe card is used the system needs to have the last 4 digits of the card number input after the swipe and also the expiration date input after the swipe to ensure it is not a cloned card).

Alternatively I wonder if they could do a "delayed activation" on transactions involving multiple units. This would give time for, if a charge was approved, then charged back quickly, for the activation to be stopped. Similar to gift cards.

Speaking of gift cards, I recently purchased some $10 gift cards at a retailer that was having promotion, it was basically spend $50 (accumulation) and get back $5 on a future purchase. So I purchased 5 $10 gift cards (not store gift cards). They scanned my gift cards and loyalty card then I ran my credit card for the $50, transaction approved. Now the system says it is activating the gift cards; it activates them one by one. Card 1- approved. Card 2- approved. Card 3- approved. Card 4- approved. Card 5- declined. Message popped up to destroy card 5 and that I would receive a refund. System struggled a bit and then a long receipt popped out that showed the $50 charge then a $10 refund, and the cards 1-4 activation approved and card 5 activation declined. Cashier didn't think much of it and told me to go get another gift card and we can do that one separately. Tried that, ran credit card for $10, same "approved for $10" then a decline on the new gift card. Very confusing. I had $10 of cash so when we got another card I said I will just pay the cash and then the card activated/approved and I got my $5. So evidently this gift card activation system has a limit on activating only 4 gift cards that were paid for with the same credit card within a certain time period, even on little $10 gift cards. Home Depot and Lowe's could do a similar sort of thing with the activation on these tools where they flat out do not sell large quantities to the same credit card number within a certain time period.

The bigger problem this format of home improvement stores has with credit card use is when someone uses a "company card" then they fail to submit an expense report or they make a personal purchase on the company card. Some of these construction companies will simply go dispute the charge if it was not a charge the company approves, rather than going back and taking payment from the employee for it. The store is still being paid as long as a Chip card was used though, so at least there is that. The card companies have also been cracking down on people who frequently dispute transactions and more and more people are losing disputes. In the old days of swipe only cards it was not unusual for the store to lose the money in a chargeback when that happened.

[ClownLoach]

Blockchain ensures that this is not going to be an issue of linking a device to a retailer. It is basically going to create a public record of each serial number so that anyone can verify it was legitimately paid for and can download the activation key. There would probably be some kind of app that could reactivate the tool if somehow it was needed again, you would probably have to tap your phone to the tool but anyone could enter the serial number and the activation code is publicly visible. Sounds a lot more secure than what Home Depot wanted to do which used Bluetooth. The issue I see is that the criminals will move back to more sophisticated credit card fraud, bad checks, whatever they need to get these "paid for" so they're activated at the register. No way I can see that they can deactivate later. So if someone bought a cartload of tools with a stolen credit card they would still work and this Blockchain would still show legitimately paid for.

There needs to be a way to deactivate later for those types of situations. Luckily I am finding the fraud patterns on the credit cards detect those large/unusual transactions more and more often and decline them on the spot. The stores are still being paid as long as a Chip card is used and processed via the Chip. It is unfortunate these stores are not allowed to outright deny swipe cards except in the case of gift cards (and if a swipe card is used the system needs to have the last 4 digits of the card number input after the swipe and also the expiration date input after the swipe to ensure it is not a cloned card).

Alternatively I wonder if they could do a "delayed activation" on transactions involving multiple units. This would give time for, if a charge was approved, then charged back quickly, for the activation to be stopped. Similar to gift cards.

Speaking of gift cards, I recently purchased some $10 gift cards at a retailer that was having promotion, it was basically spend $50 (accumulation) and get back $5 on a future purchase. So I purchased 5 $10 gift cards (not store gift cards). They scanned my gift cards and loyalty card then I ran my credit card for the $50, transaction approved. Now the system says it is activating the gift cards; it activates them one by one. Card 1- approved. Card 2- approved. Card 3- approved. Card 4- approved. Card 5- declined. Message popped up to destroy card 5 and that I would receive a refund. System struggled a bit and then a long receipt popped out that showed the $50 charge then a $10 refund, and the cards 1-4 activation approved and card 5 activation declined. Cashier didn't think much of it and told me to go get another gift card and we can do that one separately. Tried that, ran credit card for $10, same "approved for $10" then a decline on the new gift card. Very confusing. I had $10 of cash so when we got another card I said I will just pay the cash and then the card activated/approved and I got my $5. So evidently this gift card activation system has a limit on activating only 4 gift cards that were paid for with the same credit card within a certain time period, even on little $10 gift cards. Home Depot and Lowe's could do a similar sort of thing with the activation on these tools where they flat out do not sell large quantities to the same credit card number within a certain time period.

The bigger problem this format of home improvement stores has with credit card use is when someone uses a "company card" then they fail to submit an expense report or they make a personal purchase on the company card. Some of these construction companies will simply go dispute the charge if it was not a charge the company approves, rather than going back and taking payment from the employee for it. The store is still being paid as long as a Chip card was used though, so at least there is that. The card companies have also been cracking down on people who frequently dispute transactions and more and more people are losing disputes. In the old days of swipe only cards it was not unusual for the store to lose the money in a chargeback when that happened.

The only way they can do this without creating a back door that could be used harmfully later is what they are doing right now. Lowe's has a video that explains the process. They scan the barcode with the serial number which sends it to the manufacturer and reports the item is sold, then the manufacturer sends the activation code. The serial number and activation code are added to the public blockchain which means later anyone (a resale buyer or the police) can validate the tool was actually purchased and not directly shoplifted from the shelf. The transmitter is right there at the register submitting the activation code to the tool. So really no way to deactivate the tool later if it was paid for fraudulently. No way to do a delayed activation unless the customer physically returned the tool to the store. And nobody is going to buy a drill that has to connect to the internet, or to their cell phone via Bluetooth or something like that to work; some kind of connection to the cloud is what would be needed to "brick" the tools remotely later.
Basically the retailer is going to pass the theft problem along to the credit card companies who will take the loss now for fraudulent purchases of still activated tools. Somewhere the customer will still be paying the price of these losses, it just won't be on the P&L of the store.

Here's what I just don't understand: why aren't these stores just installing secured stock rooms ("the cage") for high shrink items, like Costco has up front, and having pull cards? It's a heck of a lot cheaper. We had a room like that at Circuit City. 24/7 cameras and everything in it was scanned every few days, more often if a problem occurred. Lowe's is not selling so many power tools that they can't afford to set up a pick up window. Apparently the reason for this is the lock up cages on the displays themselves aren't enough these days, they cut the locks or do other destructive things to break in (see for example the San Jose Home Depot that was burned to the ground by a shoplifter who set a small fire to distract while he tried to gather a cart of tools to steal).

I visited a Best Buy that is getting the remodel to take the boxes off the floor and add stock rooms. It wasn't done yet, but the store is literally Circuit City in 2022. Makes so much more sense, you can see how much cleaner the aisles will be when they don't have giant TV boxes clogging the paths. Nobody will be able to put TVs on a flatbed and run out the door anymore because they will be in the secured back room. Home Depot and Lowe's have enough room to do the same thing without all this loony blockchain and RFID stuff. Someone in IT at both companies must have been looking for work to justify their positions and came up with this insanity. These are not impulse items. The contractor who needs a reciprocating saw for a job today isn't going to come in and be pissed off that he has to wait at the pickup counter for a minute while someone gets a tool that has been kept secured and they can trust hasn't been messed up on the floor, possibly mishandled or even swapped with a counterfeit, etc. Nor is he going to decide to go to Amazon next time and wait even longer for the item he needs for the job today. These guys are spending a fortune on problems that don't exist.

The truth is that Home Depot and Lowe's are two of the most profitable retailers of all time. Look at their earnings, Lowe's earnings per share are almost triple that of Walmart!

The truth is that they make way too much money already which allows them to spend untold millions on stupid things like this scheme. They really just serve together as a duopoly that exists to keep prices sky high on home improvement products and squash any potential competitors. If a real third competitor could get established they would be forced to cut their prices dramatically.

If anyone wants proof that Kroger and Albertsons should not be allowed to merge just look at Home Depot and Lowe's.

[storewanderer]

With the configuration of many of these stores, they could easily build a cage at the front wall for tools and other high value items. The pick up point could be past the checkstands and very easy for a customer to pay with a pull card, have the register send an alert to the cage of what item needs to be pulled, and as the customer is walking over there the cage employee retrieves the item and hands it off to them. Toys R Us used to have a set up like this for some items like video games a long time ago, it was basically a counter on the front wall and after you paid you took the ticket/receipt there and they got the item for you. Everything was in locked cases, it was not always staffed but they called someone over as you paid. Then if it was something bigger like a bike you had to go to the back door to pick it up.

What does it take to do a cage area, and inventory it so often like Circuit City did? It takes... LABOR. And these retailers do not seem to want to do anything that will cause them to use more labor*. So instead we get schemes like this.

*unless it comes to "buy online pick up in store" - then there are suddenly unlimited labor resources to make that work.

I think another issue with these home improvement stores is they display too much inventory on the floor. I know their model is basically not to have any backroom space so everything gets to the floor. This is a shoplifter's dream. The stores have way more inventory than they should have.

Prices at these home improvement stores are pretty bad. I buy various items every now and then and the pricing flat out does not make sense. It is clear they are operating on huge mark-ups and a lack of competition. For all the folks who went to Home Depot and Lowes as they were "cheaper" back in the 90's and it put the Payless Cashways, Ernsts, OSHs, and various other little hardware chains who were "so much more expensive" out of business, well, these two chains sure have all of us on prices now. I also find they often do not sell loose parts/pieces instead pushing "kits" that have more parts/pieces than you really need.

[bayford]

They really just serve together as a duopoly that exists to keep prices sky high on home improvement products and squash any potential competitors. If a real third competitor could get established they would be forced to cut their prices dramatically.

Their pricing is why Menards runs circles around them in the Midwest, especially Lowe's since Home Depot is better able to count on contractors.

[storewanderer]

They really just serve together as a duopoly that exists to keep prices sky high on home improvement products and squash any potential competitors. If a real third competitor could get established they would be forced to cut their prices dramatically.

Their pricing is why Menards runs circles around them in the Midwest, especially Lowe's since Home Depot is better able to count on contractors.

Menards has not expanded as much as I was expecting them to. When I saw them in WY probably 10 years ago I assumed the fast growing CO and UT were next. But so far, nothing... almost wondering if Menards would do ID and MT before CO and UT...

Menards product mix is a little different than Lowes and Home Depot. Kind of feels disjointed and like they are selling stuff they probably don't sell much of for some reason (some of them seem to have a few aisles of random groceries like canned foods that don't look to move well, not sure if that is there for the RV crowd or what). They definitely do not operate with the SKU-rationalization mindset that so many national chains operate with. Menards Stores have so so many more SKUs than a Home Depot or Lowes.... I can see how some contractor types prefer the atmosphere of Home Depot as it is more of a no bs type of place IF it has what you are looking for.

Those regions with Menards and Meijer are lucky to have them as alternatives to what have become otherwise not very exciting national chains.

[bayford]

Menards product mix is a little different than Lowes and Home Depot. Kind of feels disjointed and like they are selling stuff they probably don't sell much of for some reason (some of them seem to have a few aisles of random groceries like canned foods that don't look to move well, not sure if that is there for the RV crowd or what). They definitely do not operate with the SKU-rationalization mindset that so many national chains operate with. Menards Stores have so so many more SKUs than a Home Depot or Lowes.... I can see how some contractor types prefer the atmosphere of Home Depot as it is more of a no bs type of place IF it has what you are looking for.

Menards' grocery department has improved in foot traffic, IMO, from 10 years ago when it was still a fairly new concept. You can actually find some decent deals, too, if you look around, and take advantage of the 11% mail-in rebate offer on everything in the store that they frequently run (since 2020, they've practically run it non-stop, with the exception of the holiday shopping season).

I see the groceries and other products that can’t be found at Lowe's and Home Depot as serving two roles. For one, they allow Menards to compete not just with those two retailers, but also the regional chains of farm and fleet supply stores common in the Midwest; second, between the generally reasonable pricing and the possibility of an 11% rebate, they are hooks to get you to browse the store beyond the core home improvement departments and buy more than you intended. Home Depot and Lowe’s have never been stores I would go to just to browse, not having a specific product in mind when entering, but with Menards, that’s not such a far-fetched proposition.