Walmart, Costco and other companies rethinking self-checkout
(CNN) - Walmart, Costco, and other chains are revising their self-checkout strategies after noting higher numbers of intentional shoplifting - or "shrink."
Self-service machines were first introduced during the 1980s to lower labor expenses. They shifted the work of paid employees to unpaid customers.
Self-checkout expanded at supermarkets in the early 2000s as stores looked to cut costs, and during the pandemic, many shoppers used self-checkout for the first time to minimize close interaction with employees and other customers.
But now, retailers are rethinking self-checkout. They have found that self-checkout leads to higher merchandise losses from customer errors and "shrink" than human cashiers ringing up customers.
Shrink has been a growing problem for retailers, who have blamed shoplifting for the increase and called for tougher penalties. However, retailers' self-checkout strategies have also contributed to their shrink problems.
One study of retailers in the United States, Britain, and other European countries found that companies with self-checkout lanes and apps had a loss rate of about 4%, more than double the industry average.
Some products have multiple barcodes or barcodes that don't scan properly with self-checkout technology. Produce, including fruit and meat, typically needs to be weighed and manually entered into the system using a code. Customers may type in the wrong code by accident. Other times shoppers won't hear the "beep" confirming an item has been scanned properly.
Other customers take advantage of the lax oversight at self-checkout aisles and have developed techniques for stealing. Common tactics include not scanning an item, swapping a cheaper item (bananas) for a more expensive one (steak), scanning counterfeit barcodes attached to their wrists or properly scanning everything and then walking out without paying.
Stores have tried to limit losses by tightening self-checkout security features, such as adding weight sensors. But additional anti-theft measures also lead to more frustrating "unexpected item in the bagging area" errors, requiring employees to intervene.
Walmart removed self-checkout machines at some stores in New Mexico earlier this year.
Costco said it's adding more staff in self-checkout areas after it found that non-members were sneaking in to use membership cards that didn't belong to them at self-checkout. The company's management said this year that shrink increased "in part we believe due to the rollout of self-checkout."
Five Below, the discount toy retailer, said that shrink at stores with more self-checkout lanes was higher. The company plans to increase the number of staffed cash registers in new locations.