Self-check registers are a retailer’s dream. Instead of paying someone minimum wage to stand there and ring people up, the customers could just do it to themselves. Instead of employing 7 cashiers per shift, they could employ two people to watch and “help” at self-check registers, and an optional one to check receipts at the door. By reducing that workforce by more than half, and having workers stock shelves during the day they could cut costs significantly.
The problem is these cashiers have no incentive to remain honest. Sure, membership clubs like Costco and Sam’s Club can have rules requiring people to have their receipts checked, but you can’t make someone do that at Walmart or Dollar General. Those stores don’t have the codes of conduct that go with a private membership. To many loyal customers, by making them scan their own things they have every right to “skip” scanning something on occasion. After all, they aren’t trained in this.
During an earnings call on December 7th, Dollar General CEO Todd Vasos said, “We had started to rely too much this year on self-checkout in our stores. We should be using self-checkout as a secondary checkout vehicle, not a primary.” Aggressively pushing stores with only self-check registers and cashier-free lines, Dollar General was looking to become the pioneer in automated discount stores.
However, they failed to understand their main demographics. Most of their stores are located in poor and undereducated markets, Dollar General has a significant customer base who found the idea of operating their own register daunting, if not downright impossible. They felt on the spot and forced to be perfect, or they worried they could be accused of theft. Rather than risk it, they simply took their business elsewhere.
Those who remained and suffered through it were frequently forced to ask the people stocking shelves to help them. For the disabled, this was ultimately humiliating, as they couldn’t help their inability to ring up their items. For them, these cashiers were a lifesaver in essence, and without them, the stores suffered as their already bare-bones crews were now overworked and quitting left and right.
Realizing that these imperfections were costing them money in unpaid merchandise (aka shrink), and while things like a morally weak employee or a mistake could still be a problem, it helped cut down the problems with the consumer. As Vasos said during the call “It helps on the sales line because we’ve got somebody to meet, greet, and ring up the customer. It also helps on the shrink line because (we’ve) got somebody at the front end of the store that is always there to monitor.”
From intentionally skipping items to mis-ticketed items, to accidentally missing the scan, shrink for consumers has increased significantly with stores that feature and extensively push self-check options. A study of retailers in both the US and the UK found that the loss rates with self-checks nearly doubled as it surged to 4% when they included self-check options.
Dollar General isn’t alone in this change. Across the globe, retailers are seeing the error of their ways and removing the self-check options. UK supermarket chain Booths is removing them in all but 2 of their 28 locations. ShopRite pulled them in Delaware following significant customer complaints. Even Walmart has been removing them from multiple New Mexico locations.
Mid-lever discount retailer Five Below saw a significant uptick in shrink from self-check locations and is working to remove them where installed. By cutting the head off the snake, they are also ending the installation of the option inside new openings. Target is adjusting differently, simply making those with 10 items or more go to cashier-assisted lanes. Costco is adding staff to their self-check departments, following a rash of customers sneaking into the store, and using other people’s cards to shop.
