CAMBRIDGE, MA -- Recent news articles in The Point of Sale News and USA Today took a look at retailers' growing use of self-checkout systems and resulting increases in theft.
Malay Kundu, founder and chief executive of StopLift Checkout Vision Systems (Cambridge, MA), which sells store video analytic software, authored the POS News story and spoke to USA Today about self-checkout loss detection. Theft -- intentional or not -- is up to five times higher with self-checkout than when cashiers are working, Kundu reported.
Walmart, CVS and several grocery chains are among larger retailers that are adding self-scanning lanes. But Kundu reported that two large grocery chains, Albertson's and New England-based Big Y, have already dismantled their self-service checkout lanes. Both cited customer service as the reason, although Big Y says shoplifting also played into its decision.
Self-checkout is supposed to make shopping faster and more convenient while saving on labor costs. However, Kundu questions whether some retailers are really saving money. "At StopLift, we are receiving many more requests for our self-checkout video analytics for finding theft and fraud at the self-checkout, in particular detecting merchandise leaving the store with customers unscanned," he said. "Chains are waking up to the fact that the siren call of labor savings is often coupled with the danger of increased shrink. And now they are trying to do something about it."
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Shrinkage in the emerging micromarket segment is said to be less than 3%. According to 365 Retail Markets, which offers the 365SmartShop, an unmanned self-checkout system that sells food, beverages and other products, shrinkage among larger mircomarket operators is only 1.5% or less -- much lower than the shrinkage rates at manned c-stores.
In the retail store applications, however, Kundu said there are many ways for people steal at self-checkout points. Some examples include:
» Leaving more expensive items in the shopping cart, while only scanning some of the less expensive items.
» Leaving items in a recyclable or reusable bag on the floor, while only scanning a couple of other items.
» The "banana trick" -- even though the customer has a $10/lb. sirloin steak on the scale, with the barcode facing upward, he or she could indicate it as produce and click on "bananas" at 49¢/lb.
» Overloading the weight scale so that additional unscanned merchandise is not sensed by the self-checkout.
» Scanning an item with one hand while dropping another into a reusable bag on the floor.
The growth of self-checkout areas in the retail and grocery industries has increased demand for video analytics and, thus, camera deployments, Kundu said. Retailers are now most interested in smart phone and tablet video applications.