Internal Theft, RFID and

By Evan Schuman  |  Posted 2005-01-12 Print this article Print

EAS Issues"> Beyond the video, weight and monitoring factors, another reason for that, Webster said, is where shrink is typically coming from. Customer shop-lifters are certainly concerns, but employees stealing merchandise themselves is much more of a worry. A self-checkout system minimizes the co-worker five-finger discount.RFID item-level tagging and EAS labels have the potential to eventually be good partners for self-checkout, but their cost is prohibitive today. EAS—which sounds an alarm if an unchecked item leaves the store—can today add two to four cents of cost per product, which is simply way too expensive, said Greg Buzek, president of the IHL Consulting Group.At some Wal-Marts, greeters are supposed to watch for fraudsters, but it’s a program that is administered inconsistently at best. That’s not universally the case. At Costco, for example, they are quite strict about stopping every single shopper, doing a cursory glance at the cart and the shopping receipt and then sending them off.
IHL’s Buzek said that Costco has an another security advantage over Wal-Mart: no bags. All merchandise is exposed in the cart at all times, even after checkout. In addition, the chain’s over-sized products are difficult to hide in a coat pocket.But Buzek points out that the much higher store-volume makes a lot of those tactics unique to a club store—such as Costco and Sam’s Club. The delay to check each cart would be unacceptable for a higher-traffic retailer such as Wal-Mart, he said.But is self-checkout a viable alternative for cashier lanes for most retailers? For some retailers such as Home Depot, self-checkout is already handling about one of out every three checkouts, NCR’s Webster said.But IHL’s Buzek says that interest in retail checkout is real but not wildly enthusiastic in terms of imminent purchases. The exception to that is grocery, where self-checkout is truly a hot item. What’s the real ROI of self-checkout? To find out, click here. Even in grocery, though, it’s severely limited. Today, it’s being used to siphon off a small portion of the express lane (small basket) shoppers. Even self-checkout proponents concede that consumers scan at a much slower rate and that overflowing shopping carts and self-checkout may not be ideal companions just yet.Buzek sees the future as being very good for grocery self-checkout. Why? Well, he thinks the express lanes are going to be handling an ever-increasing majority of grocery shoppers. “In the professional demographic, people don’t cook any more. They pick up (cooked-in-store) rotisserie chicken,” Buzek said.That means a lot more customers buying just a few items at a time—such as just enough for tonight’s dinner—and that’s a good recipe for self-checkout.That fits perfectly with the original business case for self-checkout, which is that those cashiers wouldn’t be laid off, but would instead be put into the back to cook that rotisserie chicken. To read more about the balancing act that is self-checkout security, click here. Self-checkout system proponents also point to several non-security and non-speed benefits from the systems. “In the more senior demographic,” NCR’s Webster said, “they want their items to slow down so they can see every item.”Webster also pointed to privacy issues, with some customers feeling gunshy about showing a cashier some personal medical products.The NCR exec then referred to the other end of the age demographic and said that some children like to push items through the self-checkout lane. For them and their parents, Webster said, “there is a tremendous entertainment value to self-checkout.” Either Webster is pushing his point a bit too much or those parents really need to get out more. Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at To read earlier retail technology opinion columns from Evan Schuman, please click here. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

Evan Schuman is the editor of's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at

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