Is Shrink From Self-Checkout Lanes Worse Than Grocers Think?

It’s no surprise in today’s retail landscape that shrink is a major problem caused by myriad issues – ranging from organized retail crime and theft to unchecked food waste. According to research from Grabango, self-checkout machines are also contributing to shrink in a major way, with losses totaling 3.5% of sales or more than 16 times more loss than traditional cashier lanes.

Checkout-free technology provider Grabango shared that shoplifting and employee theft account for two-thirds of the $100 billion a year lost to shrink, while internal process and control errors make up most of the rest. The most common and costly form of shoplifting is partial shrink, which is when a shopper pays for some of their purchase, but not all of it, such as when they only scan two out of three items or type in a code for a lower-priced item. 

[Read more: "SPECIAL REPORT: The Story Behind Shrink"]

Grabango’s research found that a majority of these activities occur at self-checkout.

For its study, the company used computer vision to analyze nearly 5,000 retail transactions, comparing items the shoppers picked up during their shopping trip with transaction data to see what was actually purchased.

That analysis showed that self-checkout led to a shrink rate more than 16 times higher than traditional cashier lines. Nearly 7% of self-checkout transactions had at least some amount of partial shrink, compared to 0.32% with cashiers. The analysis also suggested a shrink rate of 3.5% for self-checkout machines, while conventional cashiers only saw a 0.21% shrink rate.

Driving this point home even further is a recent survey conducted for online lending market LendingTree, which found that 15% of respondents said they have purposely taken an item while completing a self-checkout transaction. Although 60% felt remorseful afterward, 44% plan to steal products again when using that option. This kind of theft issue is widely acknowledged as a problem, with 69% of consumers agreeing that self-checkout technology contributes to shoplifting. 

According to Grabango, checkout-free technology powered by computer vision can help eliminate self-checkout shrink by tracking what shoppers pick up and charging them exactly what they owe. The company also stressed that average supermarkets could increase bottom-line profits by more than 50% per year by eliminating partial shrink from self-checkout alone.