Grabango’s Computer Vision Analytics Uncover Self-Checkout Systems Have 16 Times More Shrink Than Traditional Cashier Lanes

November 28, 2023

A large number of grocery, convenience and other food retailers have recently reported increases in shrink due to theft. Although some of these increases are due to organized crime, recent research from Grabango reveals self-checkout machines are a significant driver of shrink, with losses amounting to 3.5% of sales – or more than 16 times more loss than traditional cashiers. 

Retail shrink costs U.S. retailers $100 billion a year. Shoplifting and employee theft account for two-thirds of this amount while internal process/control errors account for most of the rest. Partial shrink is the most common and costly form of shoplifting, where a shopper pays for some of their purchase, but not the full amount. For example, a shopper might have three cans of soda but only scan two of them, or might type in a code for a lower-priced item. Grabango’s study revealed the majority of these activities occur at self-checkout.

To evaluate shrink rates for self-checkout systems, Grabango used computer vision to analyze nearly 5,000 retail transactions, comparing items the shoppers picked up during their shopping trip with transaction data to see what was actually purchased.

Self-checkout machines had a shrink rate of 3.5% versus only 0.2% for conventional cashiers. 

This analysis revealed self-checkout led to a shrink rate more than 16 times higher than traditional cashier lines. As the chart below shows, 6.7% of self-checkout transactions had at least some amount of partial shrink compared to 0.32% with cashiers. On a revenue basis, self-checkout machines had a shrink rate of 3.5% versus only 0.21% for conventional cashiers. 

According to FMI, self-checkout accounted for just under 30% of total transactions in 2022. Based on a market size of nearly $1 trillion and a partial shrink rate of 3.5%, self-checkout machines cost food retailers more than $10 billion in lost profits annually. 

Eliminating self-checkout shrink alone could increase grocery store bottom-line profits by more than 50% a year. 

Checkout-free technology powered by computer vision eliminates self-checkout shrink by accurately tracking what shoppers pick up and charging them the exact amount they owe. For the average supermarket, eliminating partial shrink from self-checkout alone could increase bottom-line profits by more than 50% a year. 

“Shrink is a large and growing issue for grocery and c-store retailers, but retailers can take action,” said Grabango Founder and CEO Will Glaser. “Grabango’s checkout-free technology uses computer vision to eliminate shrink. Automated systems don’t lie, don’t steal, and don’t discriminate. With Grabango, shoppers are charged exactly what they owe, no more and no less.”

 About Grabango

Grabango is the leading provider of checkout-free technology for large-scale chains. Grabango delivers a next-generation shopper experience and is the only enterprise-class, checkout-free solution suitable for operation in existing stores. The Grabango platform is a fault-tolerant, edge computing network that accurately processes millions of simultaneous transactions. The system places no limits on who can enter the store, what can be sold there, or how the shelving is configured. For more information, visit www.grabango.com.