Businesses Say They’ll Lose Profits if California Eliminates Self-Checkout Options at Stores

The California Senate has already created a bill that will either limit, or completely eliminate, self-checkout machines in the state at all grocery or retail stores.

The bill was created in an effort to eliminate or reduce theft seen in stores throughout California. However, industry experts have claimed that the bill will instead reduce profits for businesses, especially as many business owners will have to spend more money if this bill is passed.

For example, the bill says that one employee can only oversee two self-checkout stations — no more than two. This employee must also not have any other duties while overseeing these machines.

In total, estimations have stated that at least 10,000 new cashiers will have to be hired to either oversee these self-checkout machines, or take the place of the kiosks and act as a regular cashier.

If these 10,000 new cashiers are hired after the bill’s passing, this could cost at least $497.1 million in additional costs being spent by grocery stores every year, according to an Encina Advisors, LLC analysis.

Wilkinson stated that this will frustrate customers, as it will “lead to higher operational costs that will be passed to consumers.”

This could have unintended — and perhaps even dangerous — repercussions for these cashiers who aren’t trained in this manner.

Ryan Young, a senior economist at the Competitive Enterprise Institute, said, “Self-checkout lanes can save on labor costs, but increased theft is one of the tradeoffs. Companies can decide for themselves whether that tradeoff is worth it. The answer will vary from business to business. They do not need California’s state Senate deciding for them.”

He stated, “Fighting theft is a multi-faceted societal issue. It takes partnership with policymakers, businesses, and tech working together to curb crime which will ultimately help businesses.”

R Street Institute’s western region director Steven Greenhut has explained that the “state and local governments could help by actually prosecuting people who steal stuff, but stores are perfectly capable of reducing their own shrinkage problem.”

Various stores have realized that they cannot easily combat theft when they rely on having self-checkout machines, as this seems to make shoplifting much easier. Therefore, retail and grocery stores have been pulling back from self-checkout options.

Now, however, the company has started to crack down on an increase in retail theft. It has reverted at least 12,000 stores back to using regular cashiers, rather than relying on self-checkout machines.