Understanding the Reasons Behind Retailers’ Decision to Remove Self-Checkout Amidst Concerns of Theft
Retail stores have been grappling with the issue of theft, which cost them billions of dollars last year. In response to this ongoing problem, major retailers such as Walmart, Target, and Dollar General have announced significant changes to their reliance on self-checkout. While they may not explicitly mention theft as the reason for these changes, it is a significant factor that cannot be ignored.
According to the National Retail Federation (NRF), the total amount lost to theft in the retail industry reached an alarming $121.6 billion in 2023 and is projected to rise to $150 billion by 2026. Adrian Beck, an emeritus professor with the School of Criminology at the University of Leicester, reveals that approximately 25 percent of these losses are occurring through self-checkouts. Interestingly, around 53 percent of the loss is intentional, but a significant portion is due to non-malicious theft resulting from human error.
Professor Beck’s report, titled “Global Study on Self-Checkout,” highlights that theft has been a problem with self-checkout technology since as early as 2022. Many retailers, including grocery stores, introduced self-checkout options during the pandemic to minimize personal interactions and reduce labor costs. However, they are now reevaluating and, in some cases, reversing this decision due to the high incidence of theft.
Target was the first major retailer to announce changes to its self-checkout system. They have decided to limit self-checkout stations to 10 items or less. This change was tested last fall and is now being permanently implemented across all of its 2,000 stores nationwide. Walmart, on the other hand, is taking a more cautious approach by eliminating self-checkout in just two stores currently: one in St. Louis, Missouri, and another in Cleveland, Ohio. The company plans to hire more cashiers to compensate for the removal of self-checkout. Walmart spokesperson Brian K. Little stated that the decision was made after careful analysis of shopping patterns and aims to enhance the in-store shopping experience.
Despite the staggering amount of money lost due to theft, few retailers are openly acknowledging it as a reason for their changes to self-checkout. Neil Saunders, managing director of retail at GlobalData, suggests that their reasoning may be somewhat unclear. He believes that many customers have issues with self-checkout, leading to its reduction. However, retailers seem hesitant to address theft as a significant factor in their decision-making process. According to the NRF, only 2 percent of individuals who steal items from stores are caught.
Dollar General, however, has been more forthcoming about its struggle with theft. The company recently announced that it would eliminate self-checkout in 300 stores with the highest incidents of shoplifting and merchandise losses. In its remaining 9,000 stores, Dollar General will convert some or all of its self-checkout registers to staffed checkout lanes.
Despite these changes, industry experts like Mr. Saunders believe that self-checkout machines are not going away entirely. Rather, there is a restructuring taking place. Target’s decision to limit self-checkout to 10 items or fewer exemplifies this shift. Additionally, new technologies utilizing AI for visual recording and alerting customers when items haven’t been scanned are becoming more prevalent. These advancements are here to stay and will likely improve the overall functionality and effectiveness of self-checkout.
Last month, Amazon made headlines by announcing the abandonment of its cashier-less checkout technology known as “Just Walk Out” from its grocery store locations in the United States. Professor Beck suggests that this technology was ahead of its time, with a considerably higher error rate and potential for mistakes. The expensive setup cost and lack of consumer acceptance were contributing factors to its demise.
In conclusion, major retailers are making crucial changes to their self-checkout systems due to concerns of theft. While theft may not always be explicitly mentioned in their announcements, it is a significant factor behind their decision-making process. With billions of dollars lost to theft annually and only a small percentage of thieves being caught, retailers are reevaluating the effectiveness and viability of self-checkout. These changes are part of a broader restructuring aimed at enhancing the in-store shopping experience while still utilizing technological advancements to streamline the checkout process.
