Some Retailers Are Closing Self-Checkout. Here’s What It Means for POS Systems

Self-checkouts have become incredibly popular in a variety of retail stores over the last decade. In fact, an estimated 44% of all transactions at grocery stores in 2023 took place at a self-checkout. However, despite this recent surge in prominence, some retailers are beginning to scale back or even remove self-checkouts.

Some of the main drivers of this reduction include theft, operational challenges, technical issues, cost and customer frustration.

In this guide, we take a closer look at the driving factors behind the removal of self-checkouts, and what the trend means for point of sale (POS) strategies and the future of checkouts.

The Self-Checkout Trend: Why Retailers Are Pulling Back

The adoption of self-checkout in retail has been significant over the past decade, largely driven by customers seeking a faster checkout experience, contactless shopping and payments, and shorter wait times. Self-checkouts also benefited retailers as they increased efficiency and lowered labor costs.

However, while they’re still present in many stores, some retailers are beginning to scale back (or even outright remove) self-checkouts. There are several key factors influencing these pullbacks.

Theft

First, there’s a major concern about self-checkout theft. Whether someone scans an expensive item as a cheaper one, switches product labels, or even skips scanning certain items at all, theft at self-checkouts is prevalent. In fact, theft increases by up to 65% at self-checkout, compared with traditional cashiers.

Theft is also a reason why many organizations never implemented self-checkouts in the first place. For example, Jodi McConnell, CEO of Uniform Connection, explains, “[We] heard horror stories from other retailers about customers ‘forgetting’ to scan expensive items.” She added, “When your margins are already tight in retail, you can’t afford 2%-3% inventory loss from self-checkout theft.”

Customer experience

Next, self-checkouts often lead to poor customer experiences. Errors such as technical issues, slow processing and glitches are common and leave customers incredibly frustrated. In fact, 67% of shoppers have reported they’ve experienced a failure or error at a self-checkout machine.

In addition to these technical issues, self-checkouts also hurt the personal connection between your business and its customers. Robert P. Dickey, president of AQ Marketing, said, “I’ve noticed retailers abandoning self-checkout because it kills the personal connection that drives repeat business.”

He also added that, when analyzing client data, “Stores using traditional POS consistently show better customer lifetime value because staff can address concerns and build relationships during checkout.”

Staffing implications

One of the primary reasons self-checkouts became so popular was to reduce staffing costs. However, many retailers realized humans were still needed to monitor the machines, troubleshoot issues, and assist customers with any problems.

This means staff need to be trained on self-checkout machines, which is a cost. Add to that installation and maintenance costs, and the savings of implementing self-checkouts may not be as dramatic as many retailers were hoping for.

Case studies of retail pullbacks

There have been several examples of retailers pulling back on self-checkouts in recent years, with two of the biggest names being Target and Walmart.

Target

Target made headlines back in 2024 when it announced it was scaling back on self-checkouts and making a change that only allowed customers buying 10 or fewer items to use them. It also shifted to a hybrid strategy, pairing these express self-checkout lanes with additional traditional checkouts for those who prefer them.

However, while these Target self-checkout adjustments occurred and the company opened more traditional lanes, it seems it’s not fully eliminating self-checkouts anytime soon. In fact, a Target spokesperson told us, “Target is not removing self-checkout. We offer it in the vast majority of our stores and have no plans to change this.”

Walmart

As for Walmart removing self-checkout, there have been reports of a few stores outright closing them, as well as limiting their use in other cases. While there are likely several reasons for the Walmart self-checkout changes, a spokesperson from the company said decisions were “based on associate and customer feedback, shopping patterns, and business needs”.

The spokesperson also mentioned, “We’re always looking for ways to make the in-store experience better, and customer checkout is a big part of that. Sometimes that means trying new things.”

For other regional stores and markets, the decision to remove self-checkout usually comes down to localized choices based on the specific needs and preferences of each particular store. It may also depend on customer interaction and feedback, as well as the checkout method that yields the most customer satisfaction.

Implications for POS Systems

The pullback on self-checkouts has major implications for POS strategies.

Resurgence of traditional checkouts

First, there’s been a resurgence in traditional checkout lanes and a greater focus on POS systems that require staff to scan items and interact with customers. A big reason for this is to boost customer service and offer a more reliable, consistent and pleasant checkout experience.

This means companies need to adequately train their staff on the POS system to ensure efficiency remains high and errors are minimized.

Growth of hybrid models

Additionally, the pullback has prompted many companies to switch to hybrid models. These combine traditional staffed checkouts with self-checkouts, offering a versatile shopping experience and enabling customers to choose their preferred option.

Emergence of AI-assisted POS

Finally, the shift in self-checkouts has also opened the door for more models that focus on AI-assisted POS systems. These checkouts optimize scanning and offer useful theft and loss prevention analytics and trends. They also help to forecast future staffing needs based on the projected number of customers in the store.

Pros and Cons of Self-Checkout for Businesses

Self-checkout systems come with advantages and drawbacks, so it’s important to weigh them up carefully.

In addition to these pros and cons, it’s also important to consider the return on investment (ROI). Though you may save on staffing, the savings may not be as much as you think when you factor in installation, training and upkeep.

Also, think about the risk versus reward of using self-checkouts. While the benefits of using them may be exciting, don’t forget to consider the potential downsides. You may see greater efficiency and save some space, but you’ll also likely experience more theft and customer frustration at the same time.

How To Decide Between Self-Checkout or Traditional POS Systems

If your business is on the fence about adopting a self-checkout kiosk strategy or using a traditional POS system, consider the following:

Cost-benefit analysis

This involves comparing the total projected costs of implementing and operating self-checkouts and traditional POS systems, and assessing the benefits that each provides. However, these upfront costs aren’t all you need to worry about.

Albert Varkki, retail expert and founder of the luxury brand Von Baer, warns, “Maintenance costs for kiosks and software updates also add up, making ROI slimmer than anticipated.” Other costs to keep in mind include training, staffing and potential subscription fees.

Often, POS hardware bundles can keep costs down. Compare them with different self-checkout options on the market, so you know what to expect in terms of pricing.

Customer demographics

If your customers are largely tech-savvy and on the younger side, many of them may prefer to go through self-checkouts and will likely understand how to use them. But if your regular customers are generally more traditional or older, they may feel intimidated or just prefer to have human-to-human contact when checking out.

If your clientele is mixed, you could also hold a survey or poll to see what your customers prefer, to make sure you choose the correct option.

Layout and design of your store

The layout of your store may also influence your decision. If you’ve got a relatively small retail space, self-checkouts may make more sense with their much smaller footprint. This also allows you to retain additional space for inventory or achieve a more spacious design.

On the other hand, if your space is sizable and/or you need to be able to support larger orders, it makes sense to have some traditional checkout lines.

Hybrid or AI-assisted models

You’re not required to choose between using a traditional POS system and self-checkouts. Using a hybrid solution where both are present in the store is a common choice. This offers the best of both worlds, providing your customers with their preferred checkout method.

According to Varkki, “A hybrid model is often the safest first step. Testing kiosks alongside staffed lanes lets you compare data directly before committing.”

So, even if you’re not sure if you want both long-term, running a hybrid model for a while can provide you with the insights you need to make the right decision.

In addition to a hybrid model, you can also go with an AI-assisted solution to help streamline your transactions. AI-assisted checkouts aid in fraud detection, monitor customer shopping patterns and behaviors, and even provide personalized recommendations.