The first self-service grocery store—a Piggly Wiggly in Memphis, Tennessee—opened in 1916. Before this, grocery stores looked like simple butcher shops or bakeries. Products were behind the counter, and customers relied on employees to retrieve and package items to complete the sale.
The self-service business model transferred the selection process from employees to customers. Clarence Saunders, the mastermind behind Piggly Wiggly, hoped his innovation would reduce staffing costs and expedite customer shopping experiences—the same concerns that motivated the development of self-checkout machines almost a century later.
Here’s what you need to know about self-checkout and whether it’s worth incorporating into your business.
What is self-checkout?
Self-checkout is a system that allows a customer to complete a transaction autonomously without cashier assistance. Shoppers use self-checkout machines to scan, bag, and pay for purchases independently.
How does self-checkout work?
Self-checkout machines have touch screens and automated voices that walk customers through the process, including paying for purchases. Users start by using a bar code reader to scan items individually and then place them in the bagging area. For products with no bar code, like produce, shoppers manually weigh the item and use the touch screen to identify the correct item from a list or by entering a code, typically a price lookup (PLU) code.
The bagging area contains a scale that checks the weight of each bagged item against its expected weight. If there’s a discrepancy, indicating a missing or unexpected item in the bagging area, the machine prompts the customer to adjust their items accordingly. After all items are scanned, customers can apply any coupons and complete the payment process, which often accommodates both card and cash options.
To enhance security, self-checkout machines incorporate advanced tech, including cameras and AI, to monitor activities during checkout. This helps prevent theft by alerting employees if an item is bagged without being scanned.
A short history of self-checkout machines
Modern self-checkout systems have been around since the 1980s. The first machine was installed in a Kroger grocery store in 1987. This early model, developed by a Florida-based robotics company, CheckRobot Inc., was considerably larger than modern models. It included a conveyor belt for items waiting to be scanned. To verify that the correct items were being scanned, the machine used lasers to gauge the size of each product. If the size did not match the scanned item, the conveyor belt would reverse, and the transaction would start over.
The popularity of self-checkout machines accelerated in the early 2000s. Grocery stores were the first retailers to implement self-checkout technology. As the tech improved, self-checkout machines appeared in other stores, such as pharmacies and hardware stores. Today, you can find self-checkout machines in many retail locations, including airport convenience shops and clothing stores.
Advantages of self-checkout
Self-checkout technology has grown very common; according to the Food Industry Association, 96% of food retailers now offer self-service checkout. The advantages of self-checkout explain why:
Convenience
Many shoppers report self-checkout lanes feel faster. Waiting in a long checkout line is passive, but scanning and bagging their items gives customers a sense of control, creating the perception of convenience. Some customers may also prefer not to interact with cashiers when making a simple purchase.
Reduced costs
Implementing self-checkout lanes can reduce the number of employees needed. With a traditional checkoutsystem, at least one cashier and potentially a bagger staff each cashier lane. With a self-checkout model, a single employee can supervise several self-checkout kiosks simultaneously, which could help you reduce staffing costs.
Staff efficiency
Reducing the required number of cashiers can free up your store staff. Instead of working the register, employees can complete more complex tasks like stocking shelves or managing inventory. Dedicating staff resources to more complex tasks can help you increase overall efficiency and maximize profits.
Increased capacity
Self-checkout areas take up less space than assisted checkout lanes. Replacing a cash register with two self-checkout kiosks, for example, can increase the number of transactions your store can perform at once. This can help move people through the payment process more quickly, translating to shorter checkout lines and less waiting for customers.
Disadvantages of self-checkout
- Greater theft risk
- Reduced customer interaction
- High initial investment
- Risk of malfunction
- Accessibility
Despite all the potential benefits of self-checkout, the disadvantages have been significant enough for some major retailers to remove these systems from their brick-and-mortar locations.
Here are some of the disadvantages associated with self-checkout:
Greater theft risk
Self-checkout can make it easier for shoppers to steal products. According to a 2023 survey from lending marketplace LendingTree, 15% of shoppers admitted to stealing at self-checkout, while another 21% accidentally took items.
Shoppers may attempt to trick self-checkout machines by entering incorrect item codes or simply not accounting for every item during the checkout process. Accidental theft can also occur when customers forget about items at the bottom of their carts or lose track of what they’ve scanned.
Reduced customer interaction
Self-checkout machines reduce interactions between customers and store staff. Talking to an employee can help consumers form a personal connection with a store and contribute to a positive customer experience. Interaction at the checkout counter can also be an opportunity for a sales pitch.
For example, a knowledgeable employee might upsell a customer on an add-on warranty or product accessory while the customer is checking out at a hardware store.
High initial investment
Purchasing and installing self-checkout terminals is expensive. Installing a four-lane system costs between $100,000 and $150,000 depending on the brand and type of machine. This upfront cost may be prohibitive for smaller retailers.
Risk of malfunction
Malfunctioning machines can slow down the checkout process and cause customer frustration. Transactions can’t be completed if a customer makes an operating mistake or the machine detects an unexpected item in the bagging area. An employee usually must resolve these errors.
Accessibility
Self-checkout machines may not be accessible to shoppers with disabilities. The touch screen system relies on sight, limiting access for anyone with visual impairments. Wheelchair users have reported that the machine’s payment systems and screens are often out of reach.
Self-checkout FAQ
Why are stores removing self-checkout?
Several major retailers have removed or limited self-checkout machines to prevent theft and address customer complaints. Businesses including Costco and Walmart have announced company plans to reduce the number of self-checkout machines in their brick-and-mortar stores. Walmart has also announced plans to impose a 10 items or less policy for self-checkout lanes.
What are the main components of a self-checkout system?
Self-checkout systems are designed to help customers complete each step of the checkout process autonomously. Kiosks typically include a touch screen, scale, bar code scanner, bagging area, payment terminal, and receipt printer.
