Despite Shoplifting, Stores Love Self-Checkout

With self-checkout machines suddenly everywhere you may be wondering…don’t shoppers just steal stuff?

Yes, they do. But, retail industry experts say that for many stores the machines are worth the hassle. Indeed, shops ranging from superstores like Target and Walmart to convenience chain CVS to local mom-and-pop groceries have all been adding machines. One recent study suggested globally, self-checkout could continue to grow 10% a year for the next five years.

So what gives? While shoppers may love or hate self-checkout, for stores it often comes down to one thing: Machines mean fewer cashiers, and that can translate to big savings, even if it encourages some shoppers to take the sticky fingers discount.

Shoplifting, or “shrinkage,” as the retail industry calls it, has long bedeviled store owners. Checkout machines are making it worse. Theft accounts for nearly 4% of inventory for retailers with self-checkout, compared to just 1.5% for traditional checkout, according to a report from the U.K.’s University of Leicester.
What’s more, in a recent review of shoplifting offenders, 72% said that self-checkout made theft easy to very easy; only 8% answered it made shoplifting more difficult, according to the Loss Prevention Council, a trade association.

In some instances, retailers are finding higher sales in addition to higher loses with self-checkout, says Read Hayes, a criminologist at the University of Florida and head of the Loss Prevention Council. Still, most are willing to take the chance of greater losses. By switching to self-checkout, “the convenience and cost to sell is much lower,” says Hayes.

A self-checkout setup with four machines costs $125,000 versus just $1,500 for four traditional registers, according to estimates from M.I.T. But with only one person needed to man the self-checkout aisle compared to four at the registers, the cost savings can quickly add up, say experts.

Sales clerks earn $11.70 an hour on average, or just over $24,000 a year, according to the Bureau of Labor Statistics. So, while a typical self-checkout set-up costs store owners about $149,000 in the first year – it costs only about $24,000 a year after that, compared to $96,000 year-in, year-out for a more traditional arrangement.

“When companies are using (self-checkouts) to eliminate jobs, they feel more justified,” says Christopher Andrews, assistant professor of sociology at Drew University who studies self-service checkout.
To be sure, not every retailer is on the bandwagon. A few, like grocery PCC Community Markets in Washington state have installed machines only to yank them. “A kiosk doesn’t create community or connections,” marketing vice president Heather Snavely said.

It’s worth noting that some stores and retail industry advocates claim self-checkout doesn’t necessarily mean cashier jobs are eliminated, since employees can be re-assigned to help shoppers in store aisles.
Of course, ultimately most retailers will want it both ways – as few cashiers and as little shrinkage as possible.