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PHILADELPHIA — From theft to scanning errors, retailers are running into headaches with self-checkout after rolling out the technology aggressively over the last decade.
Now, research finds another problem with self-checkout: fading customer loyalty.
A newly-released study by researchers at Drexel University published in the Journal of Business Research found that “regular checkout” – the kind featuring a human cashier – makes customers more loyal to a store and more likely to revisit in the future than self-checkout. The study comes as some companies remove self-checkout machines and others adjust their self-checkout operations.
Customers feel more rewarded by a store and “feel like they were treated more valuably” when using regular checkout because it involves less effort and cashiers handle the scanning, bagging and payment process, the Drexel researchers found.
Regular checkout also makes customers feel that they are receiving the service they are entitled to as customers of that store, the study found.
“The saved effort during the checkout process and the customers’ sense of entitlement explain the effect of checkout type on customer loyalty,” the study said.
Self-checkout, on the other hand, shifts the work to customers, making them feel less rewarded, the study found.
“Extra effort required to checkout and bag purchases and the expectation of being served by the store were negative consequences of self-checkout and decreased loyalty to the store,” according to the study.
The researchers conducted five studies and compared the two checkout methods using a shopping cart of 15 items.
The researchers suggest that retailers can increase store loyalty with self-checkout by convincing shoppers that the extra effort involved in self-checkout is worth a reward, such as increased savings.
Self-checkout woes
Self-service machines were first introduced to lower stores’ labor expenses by shifting the work of paid employees onto unpaid customers.
But retailers are rethinking self-checkout.
They have found that self-checkout leads to higher merchandise losses from customer errors, and more intentional shoplifting than when human cashiers are ringing up customers. One study of retailers in the United States, Britain and other European countries found that companies with self-checkout lanes and apps had a loss rate of about 4%, more than double the industry average.
Booths, a British supermarket chain, said it’s removing self-checkout stations in all but two of its 28 stores. Walmart removed self-checkout machines at some stores in New Mexico earlier this year. ShopRite pulled them at a Delaware store after customer complaints.
Five Below, the discount toy retailer, said that merchandise losses at stores with more self-checkout lanes was higher, and it will increase the number of staffed cash registers in new locations.
Dollar General said “it started to rely too much” on self-checkout in stores and was re-assigning workers to the front of its stores to ring customers up.
Other retailers are also making tweaks to self-checkout policies.
At a handful of stores, Target has restricted self-checkout to customers buying 10 items or fewer. Customers buying more than 10 items are required to use full-service lanes with cashiers.
Costco said it’s adding more staff in self-checkout areas after it found that non-members were sneaking in to use membership cards that didn’t belong to them at self-checkout.
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