The Padlock is an item that can be used to control access to player-crafted crates.
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Padlocks can be attached to crafted crates. If it is in the player's inventory, the "Put Padlock" context option will appear when selecting a crate. Upon attaching, the player will receive two keys that can be used to open the locked crate.
While the padlock is in place, the crate's tab in the inventory window will have a lock icon on it. If you hold the correct key, the icon is an open lock, and the container works normally. Otherwise, it is a closed lock, and the container's tab cannot even be viewed.
Padlocks are effectively useless in single-player games, but since a padlocked crate cannot be used or even viewed by a player who does not hold a matching key, it can deter looters on a multi-player server. A locked crate can be destroyed, spilling its contents, just as easily as an unlocked crate can.
Pre-existing crates, like those in warehouses, cannot be locked.
Holding the key also adds the "Remove Padlock" option to the crate's context menu so that you can return it to its original unrestricted state and reuse the padlock. Removing a padlock will remove one of its keys from your inventory, while re-adding an already used padlock will return one key (not two) to you.
It can be found only in "tool store" zones, such as the one in downtown West Point.
From newitems.txt (Project Zomboid directory/media/scripts/)
item Padlock Weight = 0.2, Type = Key, DisplayName = Padlock, Icon = Padlock, Padlock = TRUE, MetalValue = 15, Tooltip = Tooltip_Padlock,