A Shoplifters Worst Nightmare

Opinion: Self-checkout may go down in retail history as the most secure insecure piece of technology ever. Wonder why the Wal-Mart bar-code thieves avoided self-checkout? They knew better.

The world of crime prevention is riddled with what—at first glance—seem to be contradictions, but are actually exercises in logic.

The weak-link theory, for example, holds that excessive security on a frontdoor serves no purpose as long as there is a perfectly good breakable window two feet away. In other words, once you have made the window a more attractive means of getting in, that extra deadbolt won’t make you more secure.

Something psychologically similar has happened with self-checkout systems.

For years, retailers had a very legitimate view of them as dramatically less secure than cashier-staffed checkout aisles. When market realities forced the units into stores, management was so fearful that it secured the systems any way it could, with weight verification, an employee assigned to stand in front and watch and an almost-certain security camera aimed right at self-checkout.

That leaves us today in the odd position of seeing self-checkout as substantially less inviting to thieves and it is precisely because they were seen as so insecure. As Yakov Smirnoff would have said, “What a country!”

But just like the window and the door, all security is relative. A locked window is fairly secure, unless it’s next to a steel door with three Medeco deadbolts. But a closed window is secure enough if it’s next to an open sliding-glass door with just a bug-screen as intruder protection.

As the recent Tennessee Wal-Mart bar-code case demonstrated, cashiers are only a fraud deterrence if they periodically look at the merchandise. A more cynical observer might add, “and if they at least pretended to care,” but I’d never say that.

In that Tennessee case, police said that a team of shop-lifters hit hundreds of retail stores—many belonging to Wal-Mart—in 19 states, making away with more than $1.5 million. It’s unclear if they qualified for a Wal-Mart Frequent Shoplifter Discount Card.

/zimages/2/28571.gifTo read more about how Wal-Mart and others fell victim to the Bar-Code Bandits, click here.

Their scheme was to place fake barcodes on top of real bar-codes and, despite having merchandise that often didn’t look at all like what the barcode displayed, not one cashier ever apparently noticed, police said. If any cashier noticed, he/she never alerted the store or police, authorities said. The way they were caught had nothing to do with store personnel.

This does raise the question of whether the human cashiers are indeed performing any verification function. If not, then they are on equal footing with the self-checkout, except the self-checkout has a weight verification.

One of the key reasons self-checkout is more secure is that “it takes some human factors out,” said Vivotech COO Mohammad Khan. “That provides a much better-secured environment, that’s for sure.”

How does self-checkout protect itself? The weight verification is considered a difficult measure to defeat, especially with an employee watching the machines without the distraction of having to also personally scan thousands of items. Of course, one good accomplice who feigns needing some extra assistance is all that is needed to distract that human watchdog at the right moment.

Multiple retail surveys have shown that self-checkout systems sometimes brought a slight reduction in fraud, but invariably did no worse than status quo.

NCR, for example, recently surveyed it’s retail self-checkout customers and reported that two-thirds reported no change in the amount of shrink, with one-third reporting a drop in shrink. “Not a single client thought shrink had gotten any worse,” said Mike Webster, the vice president and general manager of NCR’s self-service products.

Next Page: Internal theft, RFID and EAS issues.