Self-checkouts (SCO) have become a cornerstone of retailers’ labor and traffic planning. These terminals are now expected, and often preferred, by shoppers, and with convenience still a top motivator of shopper decisions, it seems an obvious win.
The calculation should be simple. Self-guided checkouts can help reduce wait times, free up associates for restocking and support, and give shoppers more control over their in-store experiences. Less friction equals more satisfied customers. If things are smooth, they’ll keep coming back, and each visit reinforces the benefits of sticking with that store.
However, retailers know it’s not that straightforward.
The real risk in SCO
It’s no secret that self-guided options, though popular and convenient, come at a price. They are a calculated risk for retail operations, with the cost of the deployment being only the first expense. Stores using SCOs see losses 33% higher than those with associate-only points of sale (POS). With an estimated $1 trillion on the line this holiday season, that number can add up quickly.
For some time now, the narrative around SCOs’ impact on losses has been focused on the increased potential for exploitation. Without an associate in the middle, bad actors have a direct line to the POS. Sweethearting, scan skipping, tag-swapping and countless other strategies that streamline shoplifting are now at bad actors’ literal fingertips.
Some people certainly do take advantage of this setup, but theft is just one part of a much bigger problem. SCO losses aren’t always malicious. Taking the associate out of the equation also increases the likelihood of human error significantly.
According to ECR’s study, missed scans at SCOs could account for up to 4.8% of transactions. The authors fail to pin down what percentage of non-scans are malicious in any meaningful way (range of 6%-80%). The 2026 update to their initial research found that every additional 1% of sales processed through SCO increases losses by approximately 0.04%, up from 0.01% in 2018.
These patterns are more likely to be associated with use volume than growing exploitation. Now, this doesn’t mean that efforts designed to stop theft are wasted. It does prove that positioning “theft” as the problem to solve may not be the best option for retailers hoping to turn losses into opportunities to improve.
Treating every SCO discrepancy as a theft event misdirects resources toward deterrence (like bag checks, receipt audits, additional security guards or enhanced shopper surveillance). Often, any labor savings attained through checkout automation go right back into these efforts, while the additional friction they add undoes the very convenience SCOs intend to deliver.
In these cases, the adoption of SCOs haven’t solved any problems; they’ve just moved spend, friction and losses to other areas. That does little to enable retailers to turn total retail losses into opportunities to improve outcomes, practices or experiences.
Inventory at the center
Escaping this cycle means shifting from initiatives that target what retailers think they know about the challenge to what they can see clearly. Rather than assuming that SCO losses are theft-driven by default, retailers need to approach data with an open mind and an eye toward opportunity. So, what are the things we know for sure?
- Holidays represent the single, highest traffic period of the year.
- Items go missing at higher rates the more often SCOs are used.
That’s the end of the list of certainties. All this tells us is that the record of what’s being sold doesn’t match what physically leaves the store, and that’s more likely to happen during the holidays. In these knowns, alone, there is no indication of intent—and, frankly, intent is irrelevant when that outcome is the same.
This is a critical shift in thinking that retailers will need to pursue effective loss control strategies this holiday season and beyond. The challenge at checkouts is one of visibility, which is exacerbated during high-traffic periods.
This framing simplifies the road ahead. Self-checkout removed the critical manual barrier (an associate scanning each item) that helped offset inventory issues at the point of purchase. The solution is to make up for it elsewhere, by implementing tools that monitor for inventory movement, not suspicious behavior. Investing in item-level inventory intelligence systems can neatly fill that gap, and do so more reliably than cashiers.
These systems use RFID tags and sensors to track items throughout retail locations, so retailers can connect orders to POS logs, exit data and returns. Unifying this data within a connected system helps to surface mismatches in real time so retailers can take immediate steps to remedy the fallout.
Over time, individual incident data becomes patterns that highlight previously unseen opportunities to combat loss and improve outcomes. When used as the foundation for tailored analytics, this data helps catch missed scans, irregularities, and any other drivers of loss, regardless of intent or location. The result is a reliable, real-time view of how loss happens in the store, so deployment decisions align with the incidents actually happening.
Extending these insights throughout the supply chain can further enhance understanding of total retail losses. Incorporating data from the point of manufacturing through to sale (or even return) enables retailers to break down loss categories more precisely. Source-to-store data can reveal losses that originate before shipments even arrive or items hit the sales floor, providing critical context about what’s an “in-store” problem and what’s a supply chain issue.
A complete picture
As retailers seek new ways to delight and deliver this holiday season, they can rest easier knowing that they don’t have to choose between convenience and revenue. Data is proving time and again that Frictionless journeys and loss prevention are not odds. In fact, they should be complementary elements of any retail plan.
Though the holidays are fast approaching, there’s still time to rethink your understanding of total retail loss. Even if the work isn’t done by December, retailers who’ve shifted their loss prevention practices to an inventory-first model will enter the new year on a strong footing, confident that they’re done chasing theft without understanding how it fits into the bigger picture.
AUTHOR BIO
As President of Sensormatic Solutions, Tony D’Onofrio is responsible for strategic planning initiatives that support the brand’s ongoing innovation and industry-leading solutions. He has spent over three decades in the retail industry, and his work has played a prominent role in retail’s journey into the digital era both as a business leader and a consultant.
Tony’s work is informed by a passion for retail and a deep knowledge of the power of technology to transform operations. Of his more than 30 years in the retail industry, Tony spent more than 20 of those years at Sensormatic Solutions, most recently as the Chief Customer Officer in 2018. Since that time, Tony was an advisor and board member of leading computer vision and Internet-of-Things companies, led a global security business, and mentored multiple companies in Silicon Valley. His career has included executive roles in both security and information technologies including NCR, Midsouth (IBM Integrator), and more recently Prosegur Global Retail.
Tony holds an MBA from Cleveland State University and is a graduate of Case Western University’s undergraduate program. He is also CEO of consulting and advisory group TD Insights, one of Thinkers360’s Top 10 Global Thought Leaders for Retail, and a recognized global top 100 retailer and technology influencer. Tony is also a recognized global social media influencer in retail, security and emerging technologies, hosting long-standing podcasts, webinars and speaking regularly on new retail technology and futurist retail trends.
