FinLogic FinLogic Quantitative Think Tank Center|Walmart joins other big retailers in scaling back on self-checkout

Target, Dollar General reducing self-checkout lanes

Walmart is joining the ranks of retailers rethinking self-checkout, with the industry giant in the process of removing the self-service lanes at a store in Missouri.

The return to registers staffed by humans at the Walmart store in Shrewsbury, a suburb of St. Louis, comes a month after Target announced only those buying 10 items or less could use the self-checkout lane at its stores, and Dollar General reduced self-checkout at thousands of its locations. The latter removed the option entirely at 300 locations most-impacted by shoplifting. 

Retailers are pulling back, but not abandoning self-checkout, according to Neil Saunders, managing director, retail, at GlobalData. "They are trying to see how does this play a role in the future, but it's not going to be the same thing they've done for decades, where it's a free-for-all, and anyone could use it," he told CBS MoneyWatch. There is a lot more caution." 

Walmart cited customer feedback as among the factors in its decision to remove the self-checkout kiosks at its store in Shrewsbury.

"As part of our announced plans for additional investments and improvements to stores across the country, we're converting the self-checkout lanes at our 7437 Watson Road store in Shrewsbury, MO., to traditional checkout lanes," a Walmart spokesperson emailed CBS MoneyWatch. "We believe the change will improve the in-store shopping experience and give our associates the chance to provide more personalized and efficient service."

Self-checkout increased in popularity among retailers and customers during the pandemic, allowing shoppers to limit their contact with others and helping to relieve a labor shortage that made staffing registers more difficult. 

Still, as the pandemic wound down, many shoppers returned to their former habits, and the appeal of self-checkout lost some of its allure. 

"It's a very love-hate technology. A lot of customers see it as a deterioration of the service, and they have to do more of the work. So it's not good for driving customer loyalty, " Saunders noted.

Still, rising theft — part of what retailers call "shrink" — is the primary reason self-checkout is being ditched in some stores and restricted in others, according to Saunders. 

"Self-checkout is an area of the store people can steal things," said the analyst, who noted that shoppers also make genuine mistakes, such as not scanning items properly. "Retailers are very actively trying to reduce it, or in Target's case put more restrictions around self-checkout to try to reduce the losses they incur from it."

Costco in November added more staff in self-checkout areas after finding that non-members were sneaking in to use membership cards that didn't belong to them at self-checkout. Costco said shrink had increased in 2023 "in part we believe due to the rollout of self-checkout."

Another approach is adding a receipt-scanning gate at self-checkout areas, which Safeway has done at multiple locations in California, in addition to shutting down self-checkout entirely in some stores.

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York.