Feb 13 | 5 min read

7 Ways Self-Checkout Kiosks Can Help Retailers Reduce Shrink

Self-checkout kiosks can be an effective tool for retailers to reduce shrink and improve their bottom line. See how Aila can help.

Aila Staff

Shrink in retail refers to the loss of inventory due to factors such as theft, damage, or errors in record-keeping. It’s typically measured as a percentage of the total inventory and can have a significant impact on a retailer’s bottom line.  

According to the 2020 National Retail Security Survey conducted by the National Retail Federation (NRF) in the US, the average shrink rate for retailers was 1.62% of sales, representing a total loss of $61.7 billion for the industry. The top causes of shrink were shoplifting, employee theft, administrative errors, and vendor fraud.

Retailers face numerous challenges in managing inventory and minimizing shrink, and self-checkout kiosks can be a valuable tool in this effort. When managed properly, self-checkout kiosks, which allow customers to scan and pay for their items without interacting with a cashier, can reduce the opportunities for theft and help retailers to track sales more accurately. They can also free up staff to focus on other loss prevention activities, such as monitoring the sales floor or managing inventory.

self-checkout kiosk for iPad loop

Let’s explore several ways that retailers can use self-checkout kiosks to reduce shrink and improve their bottom line..

1) Implement security measures

One of the most important steps in reducing shrink with self-checkout kiosks is to implement security measures that deter theft and prevent fraudulent activity. These measures can include surveillance cameras, security guards, and anti-theft devices that detect when items are not scanned properly or removed from the kiosk area. Retailers can also install software that alerts staff when certain items are scanned or suspicious activity is detected, enabling them to respond quickly and prevent losses.

2) Train staff and customers

Effective training of staff and customers is essential to reducing shrink with self-checkout kiosks. Retailers should ensure that all staff members are trained on the use of the kiosks, including how to monitor them and respond to suspicious activity. Customers should also be trained on how to use the kiosks properly, including scanning items and paying for them. Having easy-to-use interfaces, intuitive hardware and signage are highly effective methods.  This can help reduce errors that can lead to losses and prevent shoplifting by making it clear that the kiosks are being monitored.

3) Optimize the layout and design of the kiosks

The layout and design of the kiosks can also play a role in reducing shrink. Retailers should position the kiosks in a visible and accessible location, with a clear view of the surrounding area. The kiosks should also be designed with a user-friendly interface that is easy for customers to use, reducing the likelihood of errors and minimizing the need for staff assistance.

4) Use data analytics to detect and prevent losses

Retailers can also use data analytics to detect and prevent losses with self-checkout kiosks. By analyzing sales data, retailers can identify patterns of suspicious activity or items that are frequently stolen, enabling them to take action to prevent future losses. For example, if certain items are frequently stolen, retailers can implement security measures such as attaching anti-theft devices or moving those items to a more secure location.

5) Implement automated inventory management

Automated inventory management systems can also help retailers reduce shrink with self-checkout kiosks. By tracking inventory levels in real-time, these systems can help retailers to identify discrepancies and reduce errors that can lead to losses. They can also help retailers to optimize their inventory management, ensuring that popular items are in stock and reducing the need for staff intervention.

6) Integrate the kiosks with other systems

To maximize the benefits of self-checkout kiosks, retailers should integrate them with other systems such as point-of-sale (POS) and customer relationship management (CRM) software. This integration can provide retailers with a more complete view of their sales and inventory data, enabling them to identify patterns and trends that can help reduce shrink. For example, by integrating the kiosks with CRM software, retailers can track the purchasing behavior of individual customers and use that information to improve their inventory management and marketing efforts.

7) Provide excellent customer service

Finally, retailers should provide excellent customer service to help reduce shrink with self-checkout kiosks. By creating a welcoming and positive environment, retailers can encourage customers to use the kiosks properly and reduce the likelihood of fraudulent activity. Retailers should also be responsive to customer concerns and complaints, providing assistance when needed and addressing issues promptly.

Can self-checkout kiosks cause shrink?

There is a common misconception that self-checkout kiosks cause shrink in retail. This is often because self-checkout kiosks have been associated with increased opportunities for theft and fraudulent activity. However, it is important to note that self-checkout kiosks are not the cause of shrink in and of themselves. Instead, they are a tool that can be used to both prevent and contribute to shrink, depending on how they are implemented and managed.

When properly implemented and managed, self-checkout kiosks can help retailers reduce shrink by allowing them to monitor all transactions and spot potential issues like unpaid items, misplaced items, or fraudulent activity. They can also free up staff to focus on other loss prevention activities, such as monitoring the sales floor or managing inventory. However, if retailers do not properly manage the self-checkout kiosks, it can lead to errors and losses due to scanning issues, miscounts, or other technical problems.

Therefore, retailers need to implement security measures, train staff and customers, optimize the layout and design of the kiosks, use data analytics to detect and prevent losses, implement automated inventory management, integrate the kiosks with other systems, and provide excellent customer service. By doing so, retailers can reduce shrink and improve their bottom line while still providing their customers the convenience and speed of self-checkout kiosks.

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