Secret Service’s Home Depot Arrests Add To Self-Checkout Woes

Written by Evan Schuman
April 12th, 2012

When the U.S. Secret Service arrested five men last week on charges that they stole hundreds of items from the self-checkout areas of 74 Home Depots in six states, it certainly didn’t help the security reputation of self-checkout. This comes after Costco detailed its own self-checkout thefts and several chains abandoned self-checkout, citing theft as one key reason.

Some self-checkout advocates concede that these types of self-checkout thefts are very real, but that they are often the result of sloppy self-checkout deployments, with some stores not activating all security functions, using insufficient staff around self-checkout, not bothering with security cameras and ignoring other self-checkout best practices.

Self-checkout critics say the very idea of a non-attended checkout is asking for shoplifting trouble and that it comes off as non-customer-friendly. The truth, as usual, lies in between. Different types of stores and different kinds of customers can have a huge impact, which is why similar stores in different states can have such diametrically opposite results from self-checkout.

Also, some of these best practices run into practical issues. For example, the sales reps selling self-checkout systems are hesitant—rightly so—to bring up the need to do a lot of security tweaking. First, it reinforces the fear that self-checkout is not secure. Second, it makes the purchase seem like more work. The rep just wants to make the sale and keep the customer happy. He/she will be long gone when any inventory losses happen.

The retailer, too, is at fault. The key benefit of self-checkout is being able to redeploy associates elsewhere, in more profitable areas of the store. So there’s a strong incentive to deploy the minimum number of associates possible to support self-checkout.

Then there’s basket size. Self-checkout vendors quickly admit that the ideal self-checkout experience is when the customer has 10 or fewer items. Much more than that and it becomes far too slow. When was the last time you saw a self-checkout lane with a sign “Ten or fewer items, please”? The more customers who want to use it, the better. Better for whom? Large baskets slow down the lane for everyone, generating some of that customer unhappiness and confirming the perception of a lack of customer service that self-checkout opponents cite.

In the Home Depot case, the men were accused of stealing with very non-high-tech methods. One of the suspects was charged with distracting the Home Depot associate watching self-checkout as his accomplice maneuvered a high-priced item directly into a bag without using the self-checkout system at all, among other tactics.

The Costco case involved weight mismatches and the IBM self-checkout system’s inability—said one Costco official—to demand an associate intervention for such a weight problem. Brian Taylor, worldwide product manager for self-checkout at IBM, disagreed, saying the software has that exact capability but that some retailers don’t bother to activate it. He wouldn’t specifically say if Costco had failed to activate it.

“The way a retailer deploys self-checkout is much more important than the technology itself, in determining shrink,” Taylor said, adding that some retailers do not focus enough effort to make their self-checkout systems succeed. “Some are somewhat neglected, left to run itself,” he said.

Maybe part of the problem is with the name? A self-checkout system certainly sounds like it can be left alone. But as long as thieves won’t, you really can’t either.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.