How Walmart, Kroger, and other major retailers are ramping up self-checkout tech to combat theft

• Retailers and tech firms are developing new ways to detect — and prevent — theft.
• Companies like Walmart and Kroger are using cameras, AI sensors, and other tech at self-checkouts.
• Employees are also part of the solution to prevent theft at self-checkout kiosks.

Self-checkout registers have gotten increasingly sophisticated and expensive.

These days, companies like Walmart, Kroger, and more are outfitting their self-checkouts with cameras, AI-enabled sensors, and other high-tech tools to tamp down theft at self-checkout stations. And tech companies are working to create self-checkouts that allow customers to skip scanning items but still pay in full for their purchases.

Self-checkout is a significant contributor to retailers' inventory losses, which reached more than $112 billion last year. But anti-theft measures have a bad rap with customers. It's a delicate balance to deter theft in ways that don't also drive away shoppers or reduce their spending.

"The balance is really a challenge because you're trying to make it super convenient, making sure people aren't waiting in lines, making sure it's reasonably intuitive," said Craig Szklany, the head of loss prevention at Sensormatic, a retail operations intelligence company. "At the same time, you're leaving yourself exposed to the fact that some people might not do as well and ultimately walk out having only paid half for everything."

Retailers use high-tech and low-tech methods to reduce self-checkout theft

Walmart, the largest physical retailer in the world, uses AI-powered cameras to recognize items as well as human behavior. The system alerts nearby employees of accidentally missed — or intentionally skipped — merchandise scans.

The results have been somewhat mixed, shoppers and workers have told Business Insider, but the company says it is continuing to refine the tech, which it develops in-house.

When asked for comment, a Walmart spokesperson referred to their earlier statements on this subject. They previously said, "As with other retailers, theft is always a challenge, and we're always looking for better ways to tackle this issue. This includes enhanced technology at our checkouts."

Some companies have found that video technology doesn't have to be as high-tech as Walmart's to thwart would-be thieves.

Companies like Sensormatic offer a service that takes advantage of a store's existing camera infrastructure to monitor the flow of people and merchandise through a store. Sensormatic said its customers include Kroger but declined to share specifics.

Kroger did not respond to a request for comment from Business Insider.

Sensormatic and others also offer radio-frequency identification, or RFID, tagging. Items are marked with a unique code that can be detected by sensors throughout the store, allowing an item to be tracked from the shelf to the front door. The tags can also be automatically activated or deactivated as part of the self-checkout process.

RFID tags are distinct from barcodes, which date back to the earliest self-checkout stations. Most point-of-sale systems still require scanning a label, even when cameras are monitoring the transactions.

A future free of barcodes

Companies like Mashgin envision a shopping experience without scanning.

"Barcode checkout is horrible," Abhinai Srivastava, the cofounder of Mashgin, told Business Insider. "I haven't met a single person who likes it."

Srivastava has spent the past decade developing a self-checkout kiosk that uses computer vision to recognize items and ring up prices without needing to scan them individually. Amazon's Just Walk Out tech works in a similar way but tracks what customers pick up throughout the store.

Mashgin's clientele mostly includes concession vending at NFL stadiums, corporate cafeterias, and convenience stores like BP and Circle K, but Srivastava said he frequently gets inquiries from grocery and big-box stores about the tech.

Mashgin's data indicates that only about 2% of shoppers actively try to cheat its machines, Srivastava said. The vast majority of shoppers make an honest effort to complete their purchases.

Srivastava noted that customers tend to be more honest when the kiosks are near a cashier or other worker. He also said the goal of his devices is not to eliminate store workers but to free up more of their time and attention to do other tasks.

The presence of a person is one of several low-tech ways retailers have managed to curb shoplifting at self-checkout lanes. Other effective tools include using public-facing video monitors, giving front-end staff walkie-talkies, and simply installing a mirror on the kiosk.

Such low-tech strategies complement more expensive high-tech ones to reduce inventory losses. Sensormatic's Szklany said that even when unpaid merchandise does find its way out the door, these tools can help identify what kinds of products are stolen most often. Stores can then use that information to make targeted changes to displays, limit access to specific products, or build a case against a particular offender.