News

Preventing loss at the self-checkout

January 24, 2006

This article appeared in the Retail Self-Service Executive Summary, Winter 2006.

When buying technology, many retail executives may wishfully think, "Wouldn't it be great if this technology automatically integrated with all the other systems in my store?" When that doesn't happen after installation, in many cases, the problem is not a failure of the technology, but the buyer's failure to recognize what it takes to select and deploy the new technology effectively.

Ideally, retailers should spend as much or more time planning to implement new technology as they do counting the savings they expect to see once it is in place.

Self-checkout kiosks are one technology that have tremendous potential to offer savings as well as improved customer service, but they also may introduce new and challenging potential loss-causing issues.

Here are some tips for obtaining the highest return on investment from self-checkouts by considering key preparatory and implementation factors that minimize the risk of loss-causing incidents.

Take time to plan and evaluate

The planning process should start with an analysis of the problems the retailer needs to resolve, measurable goals the retailer hopes to achieve, as well as the role of the self-checkout. Retailers should consider how using self-checkouts will impact their organizations culturally and how to ensure adoption and proper use. Training programs should be put in place for all associates who will supervise self-checkouts and help customers use them. Finally, milestones should be set in order to measure progress along the way.

The amount of up-front work may seem extensive and exhausting, but it is sure to guarantee success on the back-end.

Control supervisory privileges

The next step in maximizing the benefits of self-checkouts is to assign only associates who are knowledgeable about existing systems and processes to oversee them. Ideally, operators and supervisors of new technologies are the same experienced associates that have proven their abilities to handle customers and transactions effectively.

A second measure is to control supervisory functions at the self-checkout. Associates who don't fully understand the technology or become frustrated with it may quickly override transactions in the interest of customer service. Supervisors should control transaction override privileges to prevent loss. While it is important to reduce loss-causing exceptions in this manner, it also is important to ensure that these measures do not negatively impact the customer experience. Thorough training and quick access to a supervisor can help minimize these risks.

Provide adequate training

Properly training individuals selected to work with self-checkout is another key to the success of the new technology's implementation. New associates should be trained on the traditional POS system before being trained on the self-checkout. Associates need to be comfortable working with the technologies most fundamental to the business before being put in charge of new or experimental solutions.

Training programs should not only address how to use the system, but also provide a comprehensive review of the most common issues associates may run into when using the system.

Nothing is more frustrating to customers than trying to use a self-checkout and spending more time there than they would have spent going through a regular cashier line. The idea is to offer speed and convenience. Therefore, associates managing self-checkout should know how to deal with issues and exceptions quickly. Thorough training programs go a long way toward alleviating loss due to unintentional mistakes on the part of associates.

Customize exception reports

Exception reporting usually identifies potential loss-causing transactions and operational issues. Within the traditional POS system the retailer may identify and report on credit card refunds and transaction overrides, for example. In the kiosk environment, however, it may be important to identify suspended transactions.

An occasional transaction suspension may happen at a traditional checkout if a customer forgets her checkbook, but these are much more frequent in the self-service environment and likely indicate other problems. Frequent transaction suspensions at the self-checkout may indicate that it is not clear to customers how to complete payment. Another possible explanation is unethical behavior on the part of the customer or the monitoring associate.

Exception reporting designed specifically for the self-checkout would flag multiple suspended transactions that never progressed to payment. A manager could review these exceptions to identify and correct the problem. Customizing exception-reporting criteria for self-checkout ensures important problems are not overlooked.

Integrate secondary technologies

Implementing secondary technologies such as digital video and electric article surveillance (EAS) can reduce loss at the self-checkout by helping retailers simplify data, manage information flow and deliver a more efficient solution.

For example, integrating cameras provides video context to what occurs during day-to-day self-checkout transactions. EAS is another technology commonly integrated into self-checkout. With this technology, customers scan their merchandise and, by placing it in a bag on the far side of the kiosk, automatically deactivate the EAS tag.

It is important for retailers to consider which technologies they might like to integrate before ordering the POS system to make sure it has all of the necessary capabilities to support their needs.

Joe Davis serves as director of loss prevention and operations strategy for software and solution provider Encapsulon.