Major Retailers Are Calling Its Quits on Self-Checkouts After Losing $100B to Theft

With more than 4,600 stores across the country, Walmart is unquestionably one of the biggest companies in the country. How it chooses to run those thousands of stores affects millions of Americans every day.

For several years, customers and corporations alike have debated the pros and cons of self-checkout counters. Shoppers often enjoy that there are fewer lines at self-checkout and that they can handle their transaction without having to conversate with an employee. However, the machines can be fickle and many customers get frustrated when they need to wait for assistance if there’s an issue.

Theft has always been a concern for large stores like Walmart; many consumers feel less guilty stealing from a big-box chain than they do an independent business.

One study has found that companies with self-checkout lanes and apps have a loss rate of about 4 percent. That is more than double the industry average across the world. The scanning technology, which became popular around 10 years ago, largely relies on the honor system.

“Retailers could find themselves accused of making theft so easy that some customers who would normally—and happily—pay are tempted to commit crime, especially when they feel ‘justified’ in doing it,” the researchers said in a statement.

Alcohol purchases are also a pain point for many customers because it necessitates an employee to verify customers’ ages. Some retailers have prohibited customers from buying alcohol at self-checkouts, which has created issues between companies and customers.

While there are certainly some people who steal from Walmart in the traditional way, i.e., taking a product they didn’t pay for and walking out of the store. Others have found more subtle ways to do so.

According to InvestorPlace, self-checkout theft has caused a majority of retailers over $100 billion in losses. Analysts believe that this loss could increase to $140 billion by 2025 if retailers don’t do anything about the theft.

Because of this frustrating reality, Walmart has had to crack down on theft from self-checkout registers. They armed employees at many locations with TC devices, which can calculate a shopper’s itemized total from their cart in seconds.

Walmart is already scaling back on its self-checkout machines at a store located in St. Louis, Missouri, and another location in Cleveland, according to CBS News.

The statement explained that the decisions to remove the self-checkout lanes included feedback from employees and the shopping patterns in the areas the stores are located in.

“We believe the change will improve the in-store shopping experience and give our associates the chance to provide more personalized and efficient service,” a Walmart spokesperson told Business Insider about the changes.

Of course, as one of the largest businesses in the nation, Walmart experiences more theft than almost anywhere else. But that doesn’t mean it’s not increasing across the industry.

To combat the problem, Dollar General announced that they will be removing every self-checkout machine at all 18,912 stores across the country. The corporation has noted that while it will cost $150 million in overall investment in new staffing, it will be worth it in the long run.

Target has converted many of its self-checkout options to “express” lanes, which require customers to have 10 items or fewer to use the self-checkout registers. This decision was made to create a faster checkout process while reducing theft.

Other corporations, like Target, are taking a different approach. Instead of removing all self-checkout counters, they’re spending the big bucks to install the TruScan surveillance system.

Five Below announced in March that it would be cutting back on self-checkout machines to reduce theft. The company will now use associate-assisted checkouts across its 1,500 locations in the U.S.

Customers are having mixed feelings about the removal of self-checkouts. Customers at some stores, like Booths, are regularly reporting that the machine misidentifies which fruits and vegetables they are buying.

Stores have attempted to limit losses by tightening self-checkout security features, like adding weight sensors. However, these anti-theft measures have resulted in more employee intervention.

Costco is already proving that the self-checkout method is flawed and might no longer be necessary. After adding more staff to the checkout areas to assist with the process, both non-members and members found themselves unable to swipe anything.

For now, Walmart has decided that instead of opting for the TruScan system like Target, they will follow Dollar General’s lead and start removing those pesky self-checkout machines.

A spokesperson for Walmart did make a recent announcement, saying, “We’ve decided to remove self-checkout lanes and replace them with staffed lanes at select locations. The decision was based on several factors, including feedback from associates and customers, shopping patterns and business needs in the area.”

A giant corporation like Walmart has to think about how much a change like removing tens of thousands of self-checkout machines would cost. Physically removing the machines will certainly be costly, but the added cost of labor will be far more significant.

Realistically, if Walmart does decide to go ahead and remove all self-checkout counters, it won’t drastically affect the average consumer. Of course, those who love using them may feel disappointed, but they’ll likely forget and get used to employee-run registers fairly quickly.