The Issue of Self-Checkout Fraud: How Can Stores Prevent It?

In recent years, self-checkout registers have been increasingly introduced in supermarkets and convenience stores. While they offer convenience to both customers and stores by reducing wait times and addressing labor shortages, various challenges have also been pointed out, such as resistance to operating them, operational costs, and support systems.
Amidst this, a new issue of "fraud" seems to be emerging. What kind of ingenuity is required to balance the proper operation of self-checkout registers with improving the customer's shopping experience?
In this report, Satoshi Umezawa, an editorial committee member of "Hanbai Kakushin" (Sales Innovation), reports on the current status and challenges of self-checkout registers, as well as countermeasures on the store side.

The Growing Adoption of Self-Checkout Registers

The adoption of self-checkout registers is progressing among supermarket companies. According to the "2025 Supermarket White Paper" (published by the National Supermarket Association of Japan, covering 856 companies and 23,039 stores), the adoption rate of
"self-checkout registers," where customers scan product barcodes themselves and pay,has continued to grow from 15.8% in 2020 to reach37.9% in 2024,while "semi-self-checkout registers," where employees scan items and customers pay at an automatic change machine, have also expanded from 64.0% in 2020 to77.1% in 2024.

United Super Market Holdings (Aeon Group), which manages four supermarket companies—Maruetsu, Kasumi, MaxValu Kanto, and Inageya—also noted in the progress of digitalization cited as a fiscal 2024 initiative thatthe introduction of self-checkout registers has expanded to approximately 460 out of 660 stores (69.7%) (Financial Results Briefing Materials for the fiscal year ending February 2025).

While it is said that the urban stores in the company's trade area have a younger customer base compared to rural areas and many customers have no resistance to self-service, they are actively promoting the introduction of self-checkout registers. Looking at the convenience store industry, 7-Eleven began

introducing semi-self-checkout registersin September 2020 and finishedinstalling them in 90% of stores nationwidein the summer of 2021. In conjunction with this, they plan to introduce self-checkout registers in all stores where installation is possible by fiscal 2025. Seeing that customers have become accustomed to paying via semi-self-checkout, 7-Eleven is nowfully adopting self-checkout registerswhere customers also scan the products themselves.

Why Walmart is Introducing Self-Checkout Registers

The background to the expansion of self-checkout registers in the retail industry includesresolving labor shortagesandoptimizing store labor costs.Looking at the financial statements of supermarket companies, sales have increased due to food price hikes, and gross profit after deducting costs has also grown. On the other hand, selling, general and administrative (SG&A) expenses have also increased; in particular, it is difficult to curb labor costs due to the necessity of base pay raises and hourly wage increases, and operating profit, which is gross profit minus SG&A expenses, is trending downward year-on-year across the board. As a result, companies with "increased revenue but decreased profit" are appearing one after another, and the optimization of labor costs is an urgent issue, and it is safe to consider the introduction and expansion of self-checkout registers as one of the solutions. However, we must not forget



improving customer convenienceas a purpose for introducing self-checkout registers. Considering the space for manned registers, more self-checkout registers can be placed. As a result, it can reduce customer "checkout wait" times and contribute to providing a comfortable shopping environment. Walmart, the world's largest retailer, also explains this in its own video as follows.

Also, as a background factor, we cannot overlooktechnological innovation,such as improved operability due to higher scanning accuracy, integration with cashless payments, and the introduction of AI image recognition. Furthermore, the decline in the price of self-checkout equipment has made it possible for small and medium-sized stores to introduce them, which has also had asignificant impact on the cost side.

How Does Fraud Occur?

On the other hand, there is a serious problem: the "fraud" that occurs at self-checkout counters.
The aforementioned Anti-Shoplifting Organization calculated the annual amount of unknown loss in the retail industry to be 835 billion yen (fiscal year 2023), and estimated that shoplifting damage accounts for 346 billion yen, considering fraud at self-checkout counters to be one of the contributing factors.

In December 2024, the Anti-Shoplifting Organization held a "Self-Checkout Fraud Countermeasures Meeting" attended by retailers, security companies, self-checkout manufacturers, police, and other stakeholders, emphasizing the importance of exchanging information regarding fraud occurring at self-checkout counters.
They state that it is necessary not only for businesses suffering from shoplifting to take measures, but for all companies to share information and cooperate while working with the police.

As a premise, you need to know how fraud occurs.

The first is the method of covering the barcode with a hand or intentionally putting items into a bag without scanning them. Even if an employee points out the fraud, one can pass it off as an accidental mistake by saying, "I didn't notice."

The second is the method of holding both an expensive item and an inexpensive item at the same time, scanning the barcode of the cheaper one, and obtaining the expensive item illegally. For example, holding a bag of rice (5kg) and a pack of gum at the same time, and only scanning the barcode for the gum.

The third is the method of peeling off the barcode of an expensive item and sticking on a label for an inexpensive item, such as bean sprouts, prepared in advance. This is considered a typical method in the US and UK.

The fourth is the method of registering set-sale items as individual items. This involves scanning the individual item barcode inside the packaging rather than the set price barcode on the outside. This can also be passed off as an accidental mistake by saying, "I made a mistake."

The fifth is fraud involving items without barcodes. For example, making a false declaration when selecting certain produce on the screen. This applies to items like loose potatoes, onions, cucumbers, or items difficult to pack like broccoli. There are also cases where different items are registered or the quantity is falsified.

Beyond the above, many other tricks can be imagined. These methods are frequently introduced on social media. While it would be fine if it were to warn stores, there are also instances where they are introduced as "hacks" that lead to fraud.

Even customers who have used a store for a long time might one day be tempted to commit fraud. It will be a painful event for the store that discovers the fraud as well. While stores need to know the methods of fraud, they are also required to create an environment that prevents customers from committing fraud.

Creating a store environment that prevents fraud

Regarding creating an environment that prevents fraud, the first is improving the visibility of the area where self-checkout counters are installed. In terms of layout, clearly define the entrance and exit to create a one-way flow for customers. It is important that customers before checkout and customers after checkout do not cross paths in the flow. For customers, this creates a smooth flow with less stress, and for the store, it makes it easier to notice suspicious behavior.

The second is utilizing the latest digital equipment. Nowadays, installing cameras on the top or sides of self-checkout counters to prevent fraud has become standard. Recording provides evidence of fraud, and the presence of cameras acts as a deterrent.

Furthermore, AI cameras that detect fraudulent behavior have already been developed. They detect the number of items in the basket brought to the self-checkout, check if there is a discrepancy with the number of items registered at the register, and detect scanning omissions. AI cameras that identify whether the image information of the item passing in front of the barcode reader matches the scanned item have also been developed.

The progress of AI cameras is rapid, and as introduction costs decrease, it can be predicted that self-checkout counters will eventually be deployed in even more retail businesses, starting with supermarkets. However, there are elderly people who find operating self-checkout counters difficult, those who are unfamiliar with systems that differ by store, or those who, just like in the era of manned registers, have a need to exchange a few words with an employee if possible.

Therefore, the third aspect of environment creation is customer service staff stationed in the self-checkout area. The goal is not to expose fraud, but to support customers so they can checkout comfortably. If fraud is detected, it should be treated as a problem the customer is having, and you should ask about the situation. There are many cases where it is impossible to judge whether a scanning omission is intentional or just a simple mistake. For example, depending on the store, some have plastic bags with barcodes and some without; for the former, you need to scan the bag before opening it, and for the latter, you register it on the screen after opening it. Customers accustomed to the latter method are prone to forgetting to scan the bag when they go to a store that uses the former.

Actually, I am one of those people; when I opened a plastic bag without scanning it at the former type of store, I remember being surprised when an employee with a stern face said in a strong tone, "Have you registered the plastic bag?"

Also, as the population ages, even if they have learned the operation procedure once, it becomes difficult for elderly users to adapt immediately if, for example, the system is updated. If customer service staff provide thorough explanations on how to use it and express gratitude by saying, "Thank you for always coming. If you have any other questions, please feel free to ask," the store's favorability will likely improve further.

If a store prioritizes discovering customers who commit fraud, the employees' eyes will end up focused solely on "hunting for criminals." Originally, they should be thinking about touchpoints with customers centered on hospitality (the spirit of omotenashi), but if that is lost, it is all for nothing.

The introduction of self-checkout counters is an initiative to increase customer convenience and improve the shopping experience by providing comfortable checkout. Rather than just reducing selling, general, and administrative expenses, I would like to see it as a chance to increase the store's favorability while dealing with fraud properly.

(Text) Hanbai Kakushin Editorial Committee Member Satoshi Umezawa

We have received a detailed explanation regarding the spread of self-checkout counters, the reality of fraud, and specific countermeasures at stores.
It was impressive that creating an environment to prevent fraud requires not only hardware improvements such as layout design to increase visibility and the introduction of AI cameras, but also a software-side attitude of building relationships of trust through customer service. In particular, the customer service stance of "treating it as a problem the customer is having" rather than a "criminal hunting" mindset is a point that makes one feel the importance of hospitality once again in stores used by diverse generations.
It is thought that self-checkout counters will continue to spread along with technological evolution, but I would like to pay attention to how the warmth and consideration that only humans can convey will be preserved from that perspective as well.