Retail theft has been growing, and retailers have been hesitant to take the steps needed to — if not stop it — at least reduce it.
Large retailers including Target and Walmart have used self-checkout as a way to spend less on labor. They may claim that’s not the reason and say that staff have been reassigned elsewhere, but there are fewer workers in the checkout area.
Fewer workers means fewer people watching whether people steal. This opens the door for customers to steal from self-checkout because they might honestly miss an item when scanning.
That offers consumers plausible deniability. It’s a situation that can be fixed with more staff members, and one city isn’t giving companies a choice.
Self-checkout and theft
- Higher losses: Theft at self-checkout averages 3.5% to 4% of sales versus <1% at staffed lanes. Wharton
- Among consumers, 15% admit stealing; 44% would do it again. LendingTree
- Skip-scanning (not scanning or mis-scanning) is the top method. ECRLoss
- Up to 23% of unknown losses are tied to self-checkout; 48% of that is intentional. ECRLoss
- Of customers, 58% say it’s easy to steal from self-checkouts. DataLogic
- Retailers are adding AI cameras, item limits, and staff oversight to curb theft. NRF
- Some chains are scaling back or limiting self-checkout due to losses. Convenience.org
“Safe Stores are Staffed Stores”
While stores have tried locked shelves and various technology solutions to prevent theft, Long Beach, California, has decided to step in and force stores to increase staffing.
The new law, “Safe Stores Are Staffed Stores,” requires that stores in the city do a number of things:
- Stores must have one staff member for every three self-checkout lanes.
- Any items in a locked case can no longer be purchased via self-checkout.
- There is a limit of 15 items for self-checkout.
Store employees have celebrated the rules. Matt Bell, the secretary-treasurer of UFCW 324, the union that represents grocery workers, showed his support.
“The checkers and the cashiers are on the front lines of this,” he told The Detroit News. “It really is necessary to provide them safety and security and better staffing.”
Trade associations representing major grocery chains as well as Target and Walmart said the new law “will increase labor costs for employers, leading to higher price tags on the shelf. It will also reduce sales in stores where self-checkout has closed,” the paper reported.
“These efforts will ultimately damage self-checkout,” said Nate Rose, a vice president at the California Grocers Association. “We’re seeing that worst-case scenario play out where a number of grocers have decided it’s not worth it to keep the self-checkout lanes open.”
Self-checkout is under fire
Both Target and Walmart have cut back on self-checkout, limiting how many items can be checked out. Another chain, the United Kingdom’s Booths supermarkets, has gotten rid of it entirely.
“We’re really proud that we’re moving largely to a place where our customers are served by people, by human beings, so rather than artificial intelligence, we’re going for actual intelligence,” the company told a Wharton School of Business publication.
Wharton Professor professor Santiago Gallino said that stores have a fine line to walk.
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“If you are understaffing and forcing customers to use self-checkout, then you start to annoy your customers, and this is going to backfire,” he said. “Your customers will stop going, especially if it doesn’t have a connection to lower prices.”
GlobalData Managing Director Neil Saunders sees a clear connection between self-checkout and theft, but with a caveat.
“Self checkout increases the opportunity for theft, for sure. However, it is only a part of the problem of shrink. Moreover, a lot of the losses from self checkout are genuine mistakes and errors,” he shared on RetailWire.
Mark Ryski, another member of the RetailWire Brain Trust, sees theft as inevitable with self-checkout.
“The loss prevention industry has been sounding the theft alarm on self-checkout for years. Theft is a serious problem for retailers, and the financial losses are material. There was a time when the biggest source of retail shrink was internal — that’s not the case anymore,” he wrote.
National Retail Federation retail theft numbers
- According to NRF’s “The Impact of Retail Theft & Violence 2024” report, retailers saw a 93% increase in the average number of shoplifting incidents per year in 2023 versus 2019, and a 90% increase in dollar losses over that same period.
- In 2023, surveyed retailers reported an average of 177 shoplifting incidents per day (though in some sectors, the number exceeded 1,000 daily incidents).
- Violence and aggression in shoplifting have risen:
73% of retailers said shoplifters were more aggressive than the prior year.91% said shoplifters show more violence compared to 2019.
Almost 47% of retailers reported seeing more incidents involving groups of more than three individuals stealing multiple items (possible indicator of organized retail crime).
- Retailers say organized retail crime (ORC) is increasingly part of the problem:
ORC groups coordinate theft across stores and resale channels.NRF notes that external theft (which includes ORC) accounts for about 36% of annual retail “shrinkage” losses.
Source: National Retail Federation
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