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Costco Self-Checkout Trial Setback After Store Losses

Written by Evan Schuman
April 4th, 2012

A two-year-old experiment at Costco to try self-checkout in a handful of stores has not gone well, with at least one Costco in Idaho pulling the systems out after finding—and attributing entirely to self-checkout—a $60,000 inventory loss in six months, said a Costco management source.

One of the problems with the Costco system in various stores was either inadequate or non-existent notification to customers when a purchase was rejected. For example, let’s say the shopper has 38 items in her cart and is placing the items on the self-checkout conveyor belt, which also weighs the items as they move. If the weight was different than expected, the system would void the purchase and not charge the customer. In theory, the customer would ask an associate for help to resolve the problem.

But many customers, according to a Costco source, didn’t notice the item was rejected, so they placed it in their cart, took their payment-card receipt and left the store. If the associate at the door didn’t notice that a voided item was in the cart, it would go down as a loss. If the associate did notice the problem, it would be hard to not sound like the customer was being accused of shoplifting. “Many of them weren’t doing it on purpose,” said the Costco official.

Self-checkout in general has had a rough time recently, with grocery leaders Albertsons and Kroger pulling back from self-checkout for multiple reasons, including perceived customer-service issues and security. Big Y has also pulled back from self-checkout.

The Idaho Costco store that sent self-checkout packing—it’s in Coeur D’Alene—had four self-checkout lanes for two years and found a curious change after its exit. “Our members (processed) per hour went up, from 50 per hour to 60 per hour,” the Costco source said.

But it was the inventory problems that killed the experiment.


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