Self-Service

Grabango research points to major shrink from retail self-checkout

Image: Adobe Stock.

November 28, 2023

Research from Grabango, a provider of checkout-free technology, indicates self-checkout machines are a significant driver of shrink, with losses amounting to 3.5% of sales — more than 16 times more loss than traditional cashiers, according to a company press release.

Shoplifting and employee theft account for two-thirds of the $100 billion in retail shrink per year while internal process/control errors account for most of the rest, the research found. Partial shrink is the most common and costly form of shoplifting, where a shopper pays for some of their purchase, but not the full amount.

For example, a shopper might have three cans of soda but only scan two of them, or might type in a code for a lower-priced item. Grabango's study indicated the majority of these activities occur at self-checkout.

To evaluate shrink rates for self-checkout systems, Grabango 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.

The analysis revealed self-checkout led to a shrink rate more than 16 times higher than traditional cashier lines; 6.7% of self-checkout transactions had at least some amount of partial shrink compared to 0.32% with cashiers.

On a revenue basis, the analysis suggested a shrink rate of 3.5% for self-checkout machines versus only 0.21% for conventional cashiers.

Checkout-free technology powered by computer vision eliminates self-checkout shrink by accurately tracking what shoppers pick up and charging them the exact amount they owe, according to Grabango.