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Should Self-Checkout Kiosks Be Regulated To Reduce Theft?
California bill SB 1446, introduced by Senator Smallwood-Cuevas, aims to regulate self-checkout systems in grocery and retail drug establishments. If passed, the bill would impose conditions on self-service checkout, such as limiting the number of stations per employee and ensuring the availability of manned checkout counters. It also restricts the use of self-checkout for certain items and requires businesses to assess the impact of such technology on jobs.
The bill emphasizes job preservation, requiring retailers to engage with employees before implementing self-checkout systems. Supported by the United Food and Commercial Workers (UFCW) union, the proposal is under consideration by California lawmakers, with a focus on balancing technological innovation with job protection and worker safety.
Supporters of the bill argue that it would help curb theft and create jobs. However, opponents, such as the California Retailers Association, view the proposed regulations as unnecessary and potentially burdensome for retailers.
“These measures will only serve to frustrate consumers with no evidence that they will reduce theft or provide additional protection to employees,” Margaret Gladstein from the California Retailers Association said at a hearing in April.
While proponents anticipate cost savings for companies, some experts speculate that retailers may opt to remove self-checkout machines altogether rather than invest in additional labor. This move could potentially lead to higher prices for consumers as companies seek to offset increased labor costs.
Retailers like Walmart, Target, and Home Depot have already endorsed a different proposed California ballot initiative to toughen penalties for repeat retail theft. The initiative, supported by these companies, responds to concerns highlighted in a 2022 ECR Retail Loss Group survey, where self-checkout systems were found to contribute up to 23% of total store losses, with two-thirds of surveyed retailers expressing escalating worries.
Several retailers have already begun scaling back their use of self-checkout systems to improve customer service and reduce losses. Companies like Walmart are experimenting with self-checkout, reserving lanes for specific customers like Walmart+ subscribers and delivery drivers. This approach aims to enhance efficiency and address concerns such as theft and slow queues.
While some stores are limiting self-checkout transactions or removing them altogether, others are enforcing item caps or designated time slots. This shift reflects broader changes in the retail landscape, prompting consumers to reconsider their shopping habits and retailers to balance automation with customer experience and security.
A Walmart in Shrewsbury, Missouri, is swapping self-checkout kiosks for traditional lanes as part of a wider store improvement initiative. The decision, driven by feedback and local needs, aims to enhance the shopping experience and personalize service. While this change is specific to one store, Walmart encourages innovation and customer-centric approaches across all locations. Meanwhile, other retailers like Target and Dollar General are also experimenting with self-checkout adjustments to streamline service.
A recent analysis conducted by Fit Small Business delved into the complexities of self-checkout technology, focusing on theft statistics and customer sentiments. The report highlighted the results from a LendingTree survey from November 2023, which found that while self-checkout offers convenience, it also poses risks, with 15% of users admitting to theft. Nonetheless, self-checkout remains popular among surveyed shoppers, with 96% of Americans having used it.
Despite concerns, retailers are still expanding self-checkout options because they offer “increased customer satisfaction, less overhead cost than manned checkout stations, and more time for employees to perform higher priority tasks,” according to Fit Small Business. Almost 50% of consumers are more likely to visit a store with self-checkout options, and the outlet revealed that self-checkout use is increasing. However, the majority of shoppers (54%) still prefer manned checkout options.
Even with its drawbacks, 83% of retail employees said they like self-checkout kiosks because they free them up to perform higher-priority tasks and better serve customers, according to Zebra’s 15th Annual Global Shopper Study.
Discussion Questions
Should government regulations, like California bill SB 1446, oversee self-checkout systems in retail establishments?
How can concerns highlighted by the ECR Retail Loss Group’s survey findings be effectively addressed while ensuring fair theft prevention measures?
Amidst the evolving landscape of self-checkout technology, how can retailers strategically transition to automated systems while maintaining positive shopping experiences and mitigating potential risks?
Poll
Loading …BrainTrust
Bob Amster
Principal, Retail Technology Group
Brad Halverson
Principal, Clearbrand CX
Some retailers, like Target, are already changing self-checkout policy to reduce theft and improve the customer experience. That is up to them. However, it is absolutely not the business of government to legislate how self-checkouts should operate. This bill is the worst kind of overreach. If politicians are so concerned about theft, perhaps they should focus on prosecuting it properly rather than dictating how retail stores should be run.
This is happening already in some retailers. The merchants should police this themselves. It should be , as it is , evaluated on a case by case basis with the retailer making any adjustments. To Neil’s point, it is unnecessary overreach. There are more urgent issues that are more important.
Spoken like a true grocer, Richard. You have enough to work on, let alone outside laws making your operation more complicated.
If government wants to be part of the solution for theft inside retail stores, how about empowering law enforcement to arrest and prosecute the offenders.
But in no way should government dictate to retailers how many self check-stands they are allowed to have. Most lawmakers are clueless about retail, operations, business models, profits and losses, etc., and yet they believe they can haphazardly institute any broad brushed policy that affects all of the above.
Politicians don’t need to concern themselves with what consumers or employees like or don’t like about self check stands, because those need to be concerns of the retail businesses, not government.
The real issue is law enforcement. In meeting with retail executives last month at NACDS Annual Meeting, it was obvious that check stand theft, and more-so mob-theft is a huge issue for them, and to the extent that they are closing stores in neighborhoods where incidents occur most often. To be very blunt and not mince words, there is no law enforcement in blue states for these types of crimes.
Retail managers are told by officials that with defunded and disempowered police departments, and with liberal prosecutors that don’t regard retail theft as serious crimes, retailers are on their own.
Ironically, the state where it seems law enforcement is weakest is California. Db
I can’t see regulations like these making a difference other than causing headaches for both those who enforce them and retailers. That said, the issue is real. Store need to become aware of customer dissatisfaction from self-checkout.
My worst experience was at IKEA where we were forced to use self-checkout for around $1,000 of heavy, awkward goods where I hadn’t a clue where the bar codes existed. While store associates were allowed to help us do self-checkout, at this IKEA they were prevented from doing any checkout themselves. Not sure if we’ll return to IKEA any time soon.
That said, California needs to let customers chasten companies with their economic vote and loud voices.
Short answer: no. Long(er) answer: no, more unneeded ideas from Sacto (as a six decade residentIal I’d offer my apologies, but then again, we Californians have to put up with it)
You have my sympathy. California seems to have a regulation for every problem under the sun … the issue is that most of the regulation doesn’t work. As Ronald Reagan once said: the more the plans fail, the more the planners plan!
If this law requires every self-checkout to be manned then what’s the point of self-checkout? That area is crowded enough already.
If the cost of lost goods outweighs whatever was saved by eliminating a cashier, was it worth it?
Managing a business for a business outcome is not the role of government. How about if government does it the old-fashioned way, and manages crime? How about managing the consequences of criminal behavior? Retailers are already highly incentivized to reduce and manage theft, all while minimizing costs and maximizing profits. And they are in the process of balancing tech tools and human participation to do exactly that. Now how do we incentivize politicians and the legal system to do their job…???
We should vote them out! However, some electorates seem to embrace the overreach, sadly.
OMG, stop over regulating. The issue with loss is not to impose more laws on the retailers, it is to enforce the ones on criminals. The goal of self check out was to offer a frictionless payment process and to provide a service to customers who wished for a faster check out. It also helped retailers reduce employees needed for registers. If you make them hire more people to watch self check out it is not only counterintuitive, it is financially unsound. Why buy the technology if you can’t recoup the expense. Loss is a real issue, driven by inflation, reduced work incentives and lack of accountability.
The use of self-checkout, or any other technology, should be left in the hands of those implementing the technology, in this case, there retailers, as long as it does not infringe on the privacy of the customers or expose them to fraud. The retailers will, as they always have, find their way. For CA to try to protect employment is out of the realm of its responsibility. Limiting the number of items at checkout lanes makes sense to customers and retailers alike with or without government intervention. As to theft and loss, governments (municipal and state) can stiffen penalties for conviction of theft and enforce them. Retailers will do their part to protect their assets. There is a balanced blend of manned and self-checkout lanes in every business. Each retailer will find its own, and the blend will vary, even within the same chain, with geographic variations. Water seeks its own level and so will the proliferation of self-checkout lanes in retail.
Self-checkout (SCO) has been and continues to be enormously successful for retailers in so many ways. As expected, every retailer’s circumstances are unique and SCO strategies differ based upon these criteria. Company leaders know best how to address these strategies, not government. Further, the Zebra study showcases an important fact, that employees like SCO because it enables them to provide better service to shoppers, which is a desired goal by nearly every retailer.
As described, this part of the legislation feels like particular overreach: “It also restricts the use of self-checkout for certain items and requires businesses to assess the impact of such technology on jobs.” As to the availability of manned checkout counters, this is a real issue (don’t get me started about my neighborhood Kroger store last week), but consumers are going to vote with their feet and their credit cards.
Finally, retailers are discovering for themselves that the costs of self-checkout (between excess shortage and dissatisfied shoppers) require more self-policing and better execution — two areas that shouldn’t require a state mandate to accomplish.
It still surprises me how messy of a topic self-checkout has become. Retailers clearly have a lot of work to do in figuring out the best solutions to get shoppers in and out of stores efficiently once they’ve determined what they want to buy. The theft component of this also requires improved retailer solutions, as this is an overall business problem and is not isolated to checkout.
How preposterous.
Government legislation is not needed and will only complicate matters. Notwithstanding the challenges, self-checkout is a desirable service that many shoppers want, and when it works well, it does speed-up checkout. Retailers need to decide how and if they want to deploy self-checkout, and part of this calculation is the risk associated with theft. Theft at self-checkout is a serious concern, but the proposed legislation will not resolve this. Restricting the number of items you can take through self-checkout seems counter-productive, but having some way to better monitor activity to reduce theft is clearly needed. One option might be to restrict self-checkout to only customers who are loyalty program members. I suspect that loyalty program members would be less likely to steal, and the act of initiating the self-checkout process by first identifying yourself as a member could have a positive impact – no membership, no self-checkout. Retailers could also post signs saying that all shop-lifters should use the cashier lanes 😉
While “self-checkout” is in today’s headline, it is the part of the story that is not the story.
Ultimately, retailers will solve the challenges of self-checkout. It will win in the end. More and more people will be comfortable with them. The technology will improve. In ten years, everybody will use them.
It seems, as always, that politicians ignore the real problem. In this case, the crime has no consequence.
Totally agree on the fact that this shouldn’t be regulated and that retailers can figure out the challenges of self-checkout on their own. I don’t know that it is just a “comfortable with them” issue though – I’m totally comfortable with them, and about every other piece of tech out there, and will use them for quick purchases. I have NO interest in using them for a basket of 50+ items at the grocery store every week.
It’s just a matter of time before technology catches up to a point where typical theft through self-checkouts isn’t an issue. I like Neil Saunders’ comment about focusing on prosecuting rather than “overreach.” If the consequences are steep enough, that will help reduce theft.
From a grocers standpoint, one of the challenges of imposing one-size-fits-all self-checkout legislation is it doesn’t account for the myriad of scenarios in operator size, sales volume, competition in the trade area, needed labor flexibility, or account where actual store theft is. Theft or loss can be greater in other parts of the store, not at self-checkout.
Self-checkout technology has become a good option even for small grocers and now c-stores who can’t get enough staff. Legislating what these operators can and can’t do starts to mess with how they manage labor, gross-profit and ultimately EBITDA. CA legislators should leave this one to store operators to sort out.
I initially thought this was an article from The Onion! — SB1446 even includes such delightful provisions as this “The grocery establishment or retail drug establishment shall also post a copy of the worker and consumer impact assessment in a location accessible to its employees and customers before, and for at least 90 days following, implementation of the workplace technology.”
The issue at hand is not government over-reach per se (although it does feel like it), but rather Taylorism taken to an extreme that tries to apply a one size fits all approach to store operations. Each store, even those in the same city, have unique layouts, labor limitations, shrink issues, etc. The best solution is to empower the store managers to run their business to the best of their abilities.
Retailers can strategically transition to automated self-checkout systems by implementing solutions that balance convenience with security and customer satisfaction. This could involve leveraging technology to detect and prevent theft, such as implementing AI-powered cameras or sensors. There’s is an approach to reserve specific lanes for customer segments, like Walmart does for Walmart+ subscribers and delivery drivers, ensuring a streamlined checkout process.
At the same time, replacing self-checkout kiosks with traditional lanes to improve the shopping experience has also been witnessed, as seen with the Walmart store in Shrewsbury, Missouri. Overall, the aim is to choose a method based on customer needs and preferences. By integrating automated systems while maintaining personalised service can ensure a smooth transition/acceptability of modern technology for both customers and customers.