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[17 comments]

Self-checkout theft is habit forming

May 19, 2014

According to a recent survey from the U.K., approximately 19 percent of shoppers admitted to stealing from self-checkouts with the majority of those claiming they did doing so regularly. Around 57 percent of those indicated they first started stealing at self-checkouts because they couldn't get an item to scan.

George Charles, spokesperson for VoucherCodesPro.co.uk, which conducted the survey of 2,634 shoppers regarding their use of self-checkouts, told The Daily Telegraph, "I'm sure most of those who now admit to stealing via self-service checkouts didn't initially set out to do so — they may have forgotten to scan something and quickly realized how easy it could be to take items without scanning them."

After being unable to scan, the second reason given for stealing at self checkouts were "Less likely to get caught" (51 percent), followed by "The machine is easy to fool" (47 percent), "Didn't have enough money" (32 percent), and "At the time I didn't realize it hadn't scanned" (six percent).

The top items people admit stealing from self-checkouts:

1. Fruit/vegetables - 67 percent
2. Bakery - 41 percent
3. Confectionery - 32 percent
4. Toiletries - 26 percent

With shoppers shown to be less tempted to thieve if they think someone is watching them, many stores are said to be increasing the number of staff monitoring self-checkouts and also training them around detection. But some high-tech solutions are arriving to combat self-checkout theft.

According to a separate story in The Telegraph, one company has applied to patent a system to profile customers at self-checkouts. Based on factors such as time of day, shopping history and checkout length, an algorithm may alert a shopping assistant if a customer is "high risk".

StopLift's Self-Checkout Accelerator system, using overhead cameras to constantly monitor security video, detects merchandise left in the shopping cart or bagged outside of the bagging area without scanning.

In an article in Security Director News exploring Woods Supermarkets adoption of StopLift's system, Malay Kundu, StopLift's president, said, "Self-checkout is completely open to abuse, but it's here to stay. I believe that it will become as ubiquitous as self-service kiosks at airports. What we're seeing are growing pains."

Discussion Questions:

Do you think theft at self-checkouts is as pervasive in the U.S. as it appears to be in the U.K.? What tech and non-tech methods do you think offer the most promise to reduce theft at self-checkouts?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Will the number of self-checkouts in the U.S. increase, decrease or remain the same on a per store basis over the next 10 years?

Comments:

If mirrors and spy cameras are visible on, or near, the self-check machines, this will help to cut down on theft. It also helps when there is at least one employee stationed in the area. This helps not only to cut down on flagrant stealing but also it makes someone available to help with products that don't scan well. The bigger challenges are how to stop a customer from charging him or herself for celery when it's really a bag of expensive cherries, or how to stop customers from scanning coupons for products not purchased.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Theft at self-checkouts has existed from the moment the first ones were installed. Some retailers have removed them due to shrink and the customer service concerns. Others have addressed these issues by having more stores associates man the self-checkout area and interface with the customers.

There are a number of tech and non-tech methods that can be used. I believe a combination of the two methods to be the best way to address problems. Non-tech relies on human interaction. Having friendly, knowledgeable staff manning the area is the best non-tech solution (actually, that works for every retail issue).

Tech methods include the ability for the scanner to determine what type of produce is be scanned (reduces customer frustration and the likelihood they will say to heck with it and just take it) to systems such as StopLift.

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Steve Montgomery, President, b2b Solutions, LLC

Many of my clients have developed a foolproof non-tech method of reducing theft at self checkouts. They let their competitors use self checkouts while they used manned checkouts with a nice, approachable person at the cash register.

Walmart is the best gauge for self checkouts. If Walmart doesn't have them in your area you better not either. You know its a rough area when Walmart isn't using them.

There is always going to be theft, often it's accidental. Theft at the checkout is collateral damage. A delicate balance between convenience, shrink, and labor costs.

David Livingston, Principal, DJL Research

Let's go back to an old study on employee theft that reports that 1/3 of all employees are hard core thieves. So that would make 1/3 of all customers hard core thieves. Also it is reported that some employees will steal if they see others getting away with it. Why not assume the same is true about customers?

I keep wondering why stores keep pushing self checkout when it would be easier to have real live employees doing the checkout and promoting, and giving great customer service.

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Mel Kleiman, President, Humetrics

Theft at self-checkouts is probably as pervasive here as it is in the U.K. But I'm always a little suspicious of self-reported behavior, particularly on issues around honesty. So the percentage of customers stealing is likely somewhat higher than reported.

Ultimately, if reliable, cost-effective new methods to stop this theft are not found, retailers are going to have to decide whether it's better to use human cashiers. Some retailers have already made the switch. But as we all know, human cashiers have their own foibles, such as "sweethearting" friends who come through their lines -- undercharging them or bypassing the scanner entirely on expensive items.

Different stores with different demographics may choose one method or another, based on what they can measure. Or, they may shut down the self-scanners at late-night hours when theft is more likely. I don't see a one-size fits all approach working here when it comes time to make these decisions.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

Self-checkout is still not cost effective for several reasons. First and foremost it is the preferred place of business for the multibillion dollar a year shoplifting industry. For the average customer there are split feelings of resentment with two predominant resentments. The first is the customer that wants service in the form of tallying and bagging. The second is a resentment of having to do what is perceived by the customer to be the company's job. Another consideration for the company to ponder is the missed opportunity for add-on and impulse sales being lost to the attention grabbing tasks of the customer. The lost sales due to these conditions are always dismissed as costing less than the benefits of attention at checkout, or simply omitted as information with unsupported findings.

Another survey of customer frustration levels due to delays at checkouts will find significant increases in consumer dissatisfaction when an interrupt is caused at an automated station where speed and convenience are the purpose and goals.

Self-checkout is and will continue to be costing a lot more than investors are being lead to believe. Customer frustration and dissatisfaction are costs that are seldom recovered. The feeling of abandonment is only underscored and further aggravated when there are no attendants to assist with the circumstances immediately or to vent to. The placement of an audio-only monitoring system for the purpose of obtaining unsolicited customer feedback might be supportive of these concerns.

'gjarnoldjr'

I think self-checkout theft is just as pervasive in the US as the UK. From what I observe when I'm shopping, the number of times the customer has to wait for help because they can't scan an item - especially produce as it doesn't have a barcode - leads to frustration theft. Once they experience the ease of it, consumers take advantage.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Stealing can be a perceived equalizer: store vs. customer. It likely happens here as much as in the U.K.; Americans hate to be second at anything. In today's entitlement mindset, many folks probably ask, "How many things should I have to do without?" With that question, justification to abuse follows.

To reduce stealing at self-checkouts, apply more human or technical observation at each transaction point. Changing human nature in many people doesn't seem to be an option. That almost sounds like a manned-checkout should be faster, doesn't it?

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Gene Hoffman, President/CEO, Corporate Strategies International

David Livingston's comments above are on the money. I've always felt the payroll savings in self-checkout never justified the potential loss, or at least in certain markets.

While I can't speak to technology methods to reduce theft, a more engaging self-service checkout staff will do so.

Just like in a specialty store, these are crimes of opportunity. Better service will reduce theft and improve the full-paying customer's experience.

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Doug Fleener, President and Managing Partner, Dynamic Experiences Group

First of all, studies show the largest source of shrink is from store employees, not shoppers, and that the employee theft is in large chunks while the shopper theft is petty.

We have done a lot of work with self-checkouts including shopper interviews, in-store testing, and analysis of transaction data. While many retailers point to shrink as a problem with self-checkouts, there is very little data to support this. The only quantitative study I have seen suggests that shrink is about the same at self-checkouts as at other regular lanes.

The bottom line is that many shoppers like and even prefer the self-checkouts. Some theft is a cost of doing business and self-checkouts usually generate other savings for retailers. You have to balance the cost and benefits.

If it is a big enough issue, there is technology such as Lane Hawk that can be employed to check on shopper scan accuracy and mitigate theft.

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Raymond D. Jones, Managing Director, Dechert-Hampe & Co.

I see an increasing number of self-checkouts going up in grocery stores in the Seattle area. They have been redesigned to be in a more enclosed space where customers have to enter and exit where someone is on hand to aid customers as well as monitor them. They are not open-ended like the manned stations. It's been a long time since I've seen a self-check stand unattended. This is probably an indication that theft is a problem.

Unfortunately, theft will always be a problem and combatting it will always be a challenge.

'RetailRetell'

Of course this isn't applicable to the U.S., nobody steals anything here...right? (That having been said, I find it hard to take too seriously a study which says "didn't realize it hadn't scanned" is a form of theft: stupidity, maybe; theft, no.)

This seems to me to be a simple math issue: if your shrink went up by more dollars after SC was introduced than your payroll went down, it isn't working; similarly, if your proposed "hi-tech" method will cost more than you'll save, it isn't worth it (though predicting what you'll save is, obviously, problematic). This is an empirical issue that will vary from business to business and from location to location...there's no way to "reason out" the correct answer.

'notcom'

Yes, I think theft in self-checkout is pervasive here and when stores have to "increasingly designate staff to monitor the self checkouts" it sort of defeats the whole initial purpose, doesn't it? How many more technology and non-technology dollars are going to be spent just to avoid having to hire and pay a few more human cashiers?

'Liatt'

People are inherently honest. However, if the right situations are presented, they can and will take advantage. Of course self-checkout highlighted this security issue when it originally hit the market. However, as Larry Miller's Supermarket Shrink Survey always stated, most of the shrink in a store is internal theft. With proper security measures in place that are available today, shrink at the self checkout terminals can be minimized greatly.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

What Mr. Jacobson said is absolutely correct.

The issue with self-checkout isn't an issue with self-checkout. It is an issue in approach to operations, customer service, shrink prevention, supervision, and execution at the store-level.

The opportunity to serve customers better is being wasted by ineffective implementations of self-checkout.

Delivering self-checkout should be and is, if done right, a customer service enhancement. The labor savings is a side benefit, but should not be the reason they are implemented.

'Scanner'

Sure some people steal via self checkout - but perhaps that is offset by the labor cost reduction. I hate self checkout. I think the store should give me a discount to check out myself.

'schindler'

I see no reason to believe that theft at self-checkouts would be any less pervasive in the U.S. as it is in the U.K. Shoppers steal for several reasons including frustration, lack of funds, thrill, insufficient deterrents (attentive staff and lacking security), and even in some cases, accidentally.

As grocery stores strive to increase their efficiency, the rate of theft will likely increase. Grocers need to be smart and plan from all angles. Beef up security (cameras, stationed staff, etc.). Use sensitive weighted scales that can easily detect if an item hasn't been scanned (or paid for) or if the weight of the item doesn't match up with what it was scanned in as (i.e. a shopper scanning in a bag of grapes in lieu of a half-price watermelon). Increase signage that discourages shoppers from stealing and places an emphasis on negative repercussions. Work on technology that will sound an alarm if the food item is removed from the store if not deactivated at the self-checkout.

Simply put, it is a cat and mouse game, and grocers need to be as creative in deterring theft as shoppers are at thieving.

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Alexander Rink, CEO, 360pi

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