Retailers ditch self-checkouts due to theft risks

Self-checkouts, once considered the future of retail, may be on their way out. Several major retailers have recently announced they will be reducing their number of checkouts.

Dollar General has eliminated self-checkouts at about 12,000 of its stores, and at the rest, they will be limited to customers with five items or fewer. Target is also limiting self-checkouts to customers with 10 items or fewer and is rolling out Truscan, a technology that can detect unscanned items.

Similarly, some Walmart stores have started reserving self-checkout lanes for Walmart+ members and drivers of its Spark delivery service. And in April, Amazon removed “Just Walk Out,” its cashierless checkout system, from its Amazon Go stores.

While many of these retailers attribute these moves to improving the customer experience, the main reason appears to be shoplifting. Five Below has been quietly removing self-checkout options at its high-risk stores since last year. During the company’s first-quarter earnings call, CEO Joel Anderson admitted that the discount retailer has found it’s the best way to combat shrinkage, the industry term for inventory loss regardless of cause.

“We tested a number of loss reduction initiatives from the end of the third quarter into the fourth quarter, including product testing, upstream initiatives and safety programs,” Anderson said. “The most significant change we made across most of the chain was limiting the number of self-checkouts open while positioning an associate upstream to provide additional customer assistance.”

Statistics back up Anderson’s plan. A Capital One study shows that thefts are increasing by as much as 65% at self-checkout versus traditional checkouts. Separate data from LendingTree found that 15% of self-checkout users admitted to using them to shoplift.

Balancing consumer preferences

Still, self-checkouts remain popular. According to the Food Industry Association, 44% of grocery store transactions were made through self-checkout last year, up from 29% in 2022. The challenge for retailers going forward will be balancing that convenience with their security concerns.

“It’s critical for retailers to strike the right balance between a positive customer experience, efficient checkout and optimal loss prevention,” said Elisa Tavilla, director of debit payments at Javelin Strategy & Research. “Salespeople can provide personalized customer service and act as a theft deterrent, but self-checkout technology can also speed up the checkout process and detect potential theft. Retailers need to decide what their customers want and what works best for their stores, which can vary by location.”