I like the idea of it. But what about if the parent got injured or something and isn't able to tell the password. Or just straight up forgets because they are running late or whatever and thats why they asked somebody else to pick em up.
In event of an emergency, the hospital or where ever will probably contact family or someone close to the parent, most likely someone who the child will know.
And most likely, if the child already knows the person there would probably be no need for the password, but if the person is someone unknown to the child then the parent would tell the person who is picking up the kid their password.
Most people luring children rely on the child going willingly and not making a scene. We were taught to loudly say "you are not my mother, you are not my father". Hard to get out of there quietly.
When I was little my mum had one for me and my sisters. It was the name of a waterpark she used to go to when she lived in the US. Schlitterbahn I believe it was.
This almost happened to one of my friends before, she was told to ride a bus and go to some aunt's house, but she repeatedly said I don't have an aunt named that! When she was on the bus her mom was freaking out and grabbed her off the bus.
And most likely, if the child already knows the person there would probably be no need for the password, but if the person is someone unknown to the child then the parent would tell the person who is picking up the kid their password.