Retail theft losses and rising shoplifting drive new limits on self-checkout

Walmart and Costco face checkout law

Walmart, Target, and other major retailers are facing state and local proposals—not federal regulations—that would restrict how self-checkout operates in certain stores.

In Connecticut, a proposed bill would limit grocery stores to no more than eight self-checkout stations and require staffing and staffed-lane ratios.

In parts of California, local ordinances and proposals have focused on staffing requirements, item limits, and restricted-item rules at self-checkout. Supporters argue that these guardrails can reduce opportunities for theft and improve front-end operations.

Retail theft losses hit $47.8B

Retail theft and shrinkage remain a major financial risk for U.S. retailers. The National Retail Security Survey estimated $112.1 billion in inventory “shrink” losses in 2022, with theft (internal and external) accounting for a large share of those losses.

Retailers also report sharp increases in shoplifting: one industry study found the average number of shoplifting incidents per year rose 93% in 2023 versus 2019, and the dollar loss due to shoplifting rose 90% over the same span.

In Connecticut, supporters of pending legislation have cited estimates of $895 million in annual revenue loss from theft and $56.8 million in related sales tax losses.

Self checkout linked to higher theft

Self-checkout is now widely used in U.S. retail, and multiple studies have found a higher loss risk in self-scan environments than in fully staffed lanes. One research review found that external theft activity in self-scan stores was 20% to 65% higher than in stores without that technology.

Self-checkout has also become a major part of grocery front ends: Catalina estimated it accounts for nearly 40% of lanes in U.S. grocery chains.

Survey research has found 86% of U.S. adults have used self-checkout, reflecting broad adoption even as retailers weigh the added supervision challenges

Proposed law limits checkout machines

The proposed law would limit stores to 8 self-checkout machines at any given time. This rule aims to reduce large clusters of kiosks that are difficult for staff to monitor effectively.

Stores would also need to balance automation with human staffing. At least one staffed checkout lane must be open for every two self-checkout machines in use, ensuring customers always have a traditional option.

Supporters believe fewer machines will improve visibility and reduce opportunities for theft. Smaller self-checkout areas are easier to supervise and less likely to become high-risk zones.

Staffing rules tighten supervision

The proposal sets strict staffing limits to improve supervision at self-checkout stations. Each employee would monitor no more than two machines, reducing the workload on individual staff members.

In some California cities, similar rules already require one worker for every three kiosks. These policies aim to ensure employees can actively assist customers and spot suspicious activity.

Labor groups support tighter staffing rules. Workers often handle large groups of machines at once, increasing the chance of missed theft and customer frustration during busy hours.

Item limits may be introduced

Some cities are introducing limits on how many items customers can scan at self-checkout. Costa Mesa’s ordinance limits self-checkout to 15 items per transaction, alongside other operating rules.

New York City has also considered a 15-item limit as part of a proposal to reduce theft risk at self-checkout.

In addition, some ordinances restrict self-checkout purchases of age-restricted items and items kept in locked cabinets or with theft-deterrent devices that require employee assistance.

Fines could reach $1,000 daily

Costa Mesa’s self-checkout ordinance includes escalating civil penalties that can reach up to $1,000 per employee per day if violations remain uncured, after notice and a cure period.

Other frameworks discussed by California cities have also referenced penalty structures in the $100-$1,000 range.

Connecticut’s proposal would allow employees or customers to file complaints with the state’s Labor Commissioner about alleged violations. In Costa Mesa, city staff estimated that the ordinance could apply to roughly 22 grocery and pharmacy establishments that exceed the size threshold.

Walmart tests removing self checkout

A Walmart Supercenter in Shrewsbury, Missouri, removed its self-checkout lanes in April 2024 after local police reported a high volume of calls tied to the store. In the January–May period before removal, police reported 509 calls associated with that location.

After self-checkout was removed, police said calls tied to the store fell to 183 during the comparable January–May period the following year, and arrests also fell by more than half.

Walmart said store-level checkout changes are often based on local shopping patterns, associate input, and customer feedback.

Dollar General removes 12,000 kiosks

Dollar General’s CEO said the retailer removed or limited self-checkout in roughly 12,000 locations as it tried to reduce shrinkage and improve front-end control. The company indicated it planned to keep self-checkout in a smaller set of higher-volume, lower-shrink stores.

Financial results did not show a clear income jump tied to the removal of self-checkout in that period: Dollar General reported net income of $363.3 million in Q1 2024, down 29.4% year over year, with shrink cited as a continuing headwind.

The broader takeaway is that some retailers are reassessing how much self-checkout to use when loss concerns rise.

Costco keeps theft rates low

Costco maintains significantly lower theft rates compared to other major retailers. Reported shrink levels range between 0.1% and 0.2%, far below typical industry averages.

Strict entry and exit controls are central to this approach. Customers must show their membership to enter and have receipts checked against purchases when leaving the store.

These measures help maintain accurate inventory tracking. The system also ensures customers are charged correctly while discouraging unpaid items from leaving the store.

Membership model limits access

Costco requires paid memberships starting at $65 per year, which limits access to verified customers. This reduces anonymous entry and lowers the risk of theft.

The store layout supports this model. Fewer entrances and exits reduce blind spots and make it easier to monitor customer movement inside the warehouse.

Bulk packaging also plays a role. Large multi-pack items are harder to conceal, making theft less practical compared to smaller, high-value goods found in other stores.

Critics warn of slower shopping

Critics argue that stricter self-checkout rules could slow shopping and reduce convenience, especially during peak hours when fewer self-checkout stations are available.

Business groups have also warned that staffing mandates could raise operating costs, while supporters argue the rules can improve supervision and customer service.

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More cities consider similar laws

More cities are considering rules that set staffing, item limits, and restricted-item policies for self-checkout. In Anaheim, city leaders have discussed adopting requirements similar to those in Long Beach and Costa Mesa, which include a 1:3 staffing ratio and a 15-item limit.

Anaheim officials have estimated roughly 27 retailers could be in scope for a potential ordinance discussion, depending on store type and whether self-checkout is offered. The broader push reflects local efforts to curb theft and improve front-end operations while preserving customer choice.

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This slideshow was made with AI assistance and human editing.