How do self-checkouts create retail loss?

Recent research has begun to classify the different ways in which SCO systems can create losses for retailers. These are:

Non-scanning: this can happen in a number of ways including, passing the item across the Fixed SCO scan area ensuring the barcode cannot be read and placing it in the bagging area (when weight-based security systems (see below) are not present or are set to tolerate one or more items not being scanned), or placing it directly into a bag next to the bagging area.

Mis-scanning: there are two main ways in which this typically happens. In the first, the user places a particular item on the weigh scale, such as a kilo of grapes and then chooses a cheaper item from the list of options available, such as carrots or onions. The second form is the mis-representation of items of a similar weight but differing values.

Walk-aways/Non-payment: this form of loss occurs at Fixed SCO machines when a user has scanned some or all of their items correctly and triggers the completion of the transaction but does not make payment, simply walking away with the items.

Product switching: a variant of mis-scanning is also possible with Scan and Go. In this scenario the user scans a particular variant of a product but then places it back on the shelf and replaces it with a more expensive type.

Multiple Variety Errors: this form of error corrupts store inventory records, which over time could lead to out of stocks and an eventual loss in sales. In this situation, the user has selected a product which is available in a number of varieties or flavours, such as a tins of cat food – chicken, beef, fish etc. The consumer simply scans the same variety several times to speed up the process and places them in the bagging area.

Promotion Errors: similar to the previous scan error, this does not necessarily generate an immediate financial loss for the retailer but does corrupt inventory records. In this situation the promotion is a buy-one-get-one free offer where the user only scans one item because they assume the second one is free and therefore does not need scanning.

Barcode Switching: this form of loss occurs where a user obtains a different (usually cheaper priced) barcode for a product and scans the barcode as the product is moved across the Fixed SCO scan area.

Coupon Frauds: In this scenario the use of promotional coupons is abused by the user, typically by using the same coupon multiple times, leading to lost margin.

Double-scanning: This type of error is in many respects a double-edged sword for retailers. On the one hand, when a consumer accidentally scans the same item once or more, then they will be paid for the same product more than once, generating a significant profit. On the other hand, the same behaviour will also adversely impact on stock accuracy – store systems will potentially over order double-scanned items, which could lead to a range of adverse outcomes.