More and more major retailers appear to be abandoning self-checkout technology amid rising retail theft.
“We had started to rely too much this year on self-checkout in our stores,” Dollar General CEO Todd Vasos told investors last week during an earnings call, according to multiple reports. “We should be using self-checkout as a secondary checkout vehicle, not a primary.”
Aside from Dollar General, Walmart, Costco, Target, Shop-Rite, and others have indicated they are cutting back on the number of self-checkouts, reducing the number of customers who can use them at any one time, or adding more staff to the self-checkout areas.
Target has said it is testing a “10 items of less” policy at self-checkout areas, meaning that customers who are purchasing more than 10 items have to use the staffed checkout method instead.
“Since our goal is for Target to be the easiest place for our guests to shop, our teams have been focused on the front-of-store experience with the goal of providing consistently great service through the in-store checkout experience, along with drive-up and in-store pickup,” John Mulligan, executive vice president of Target, said during an earnings call last week.
Costco has told outlets that some non-Costco members are using borrowed membership cards to pay at self-checkout areas. The Kirkland, Washington-based chain said it’s adding more staff to self-check out locations to curb the practice.
“We don’t feel it’s right that non-members receive the same benefits and pricing as our members,” the company said in a statement earlier this year. “As we already ask for the membership card at checkout, we are now asking to see their membership card with their photo at our self-service checkout registers.”
Costco officials told CNN earlier this year that retail shrink—a term used for describe retail theft, shoplifting, and employee theft—has increased “in part we believe due to the rollout of self-checkout.”
Mr. Vasos told investors that retail shrink also is a problem at the chain. “It helps on the sales line because we’ve got somebody to meet, greet, and ring up the customer,” he stated. “It also helps on the shrink line because [we’ve] got somebody at the front end of the store that is always there to monitor” the front part of the store.
Walmart, meanwhile, confirmed that it removed self-checkout machines at some locations in New Mexico earlier in 2023. “We continually look at ways to provide our customers with the best shopping experience and that includes adjusting the checkout area in stores,” spokesman Josh Havens said.
Shop-Rite, a supermarket chain with locations throughout the northeastern United States, told a retail-centered website that it has placed limits on the number of items that can be scanned at self-checkout locations.
“The updated checkout policy is a 20-item limit for all self-checkout terminals,” a spokesperson said in late October. “Any shopping order exceeding 20 items must be completed at a register with a cashier.”
Shoplifting and Theft
It comes as a retail group, National Retail Federation (NRF), released a report in late September saying that organized crime rings in New York, San Francisco, Los Angeles, and Houston are targeting retail inventories, causing more financial loss than previously anticipated.In 2022, inventory “shrink” as a percentage of total retail sales accounted for $112.1 billion in losses, up from $93.9 billion in 2021, according to the report.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” said David Johnston, NRF vice president for asset protection and retail operations.
Retailers are either being forced to close a specific store location, reduce operating hours, or alter in-store product selection to deal with the spike in retail crime, the report added.
Dollar Tree recently said it plans to remove goods such as men’s underwear, an item most prone to retail theft, from its stores.
Walmart CFO John Rainey on a post-earnings call with Telsey Advisory Group said earlier this year that the big box retailer was “putting armed guards in certain cases” in some stores located in cities.
The NRF survey was conducted online among senior loss prevention and security executives in the retail industry with insights from 177 retail brands.
In last week’s call, the Dollar General CEO also warned of constrained customer spending, especially in categories such as clothes and home goods, heading into the new year even as the discount retailer beat analysts’ estimates for the third quarter.
“Our customer continues to tell us they are feeling significant pressure on their spending which is supported by what we see in their behavior,” he stated in the call, reported Reuters.
