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Naughty Or Nice? Cambridge Company Fights Self-Checkout Theft

Theft is common at self-checkout machines, because the customer is also the cashier. (Flickr/pinadd)

Theft is common at self-checkout machines, because the customer is also the cashier. (Flickr/pinadd)

With Christmas on Tuesday this year, all the last-minute holiday shopping over the weekend should make for some of the biggest spending all year. But those busy stores are also going to be on the lookout for some busy little evil elves — particularly at self-checkout machines, where shoplifting is a surprisingly big problem.

But a Cambridge company, called StopLift, is trying to put a stop to that.

One of StopLift’s clients is a small, family owned chain in Missouri, Woods Supermarket.

At the store in Sedalia, Mo., people are stocking up for their traditional holiday dinners, and employee Chloe Beedon is helping them.

“I like your sweater,” Beedom says jovially to one customer. “So cute, with all the little snowmen on it!”

Beedon is watching over the store’s four self-service lanes.

“Are you going to use the self-checkout?” she asks another customer.

“Yay!” Beedom beams when the customer says yes.

Every so often, looking over customers’ shoulders, she catches items that they did not scan.

“Here, I’ll do it for you,” she says to one customer. “Because [the machine’s] not.”

Beedon is not just being friendly to cheer up customers. It’s also a tactic to reduce theft.

“That is what we call ‘aggressive hospitality,’ ” says Doug Haworth, director of loss prevention at Woods Supermarket.

“At self-checkout,” Haworth adds, chuckling, “if the intent is to leave the store without paying for anything, what we’ve seen is they usually make it worth their while.”

And that’s costing stores big time. Richard Hollinger studies theft for the National Retail Federation. He says many companies like Springfield, Mass.-based Big Y have been removing their self-checkout lanes. Often, the companies claim it’s for better customer service. But he says they’re just losing too much money at self-checkout.

“That’s what they’ve told me,” Hollinger says. “They’ve done the cost-benefit analysis, and there were some negatives that they never really anticipated.”

The main reason? Wannabe shoplifters have a great excuse.

“I can say: ‘Oh, I couldn’t tell what was going on, it was confusing,’ ” says StopLift CEO Malay Kundu. “‘It was beeping at me,’ right?!”

StopLift CEO Malay Kundu at his company's office in Cambridge, Mass. (Courtesy)

StopLift CEO Malay Kundu at his company’s office in Cambridge, Mass. (Courtesy)

Kundu’s Cambridge company uses a computer system to automatically review video surveillance at checkout stations and flag the transactions that look suspicious.

“Check this out,” Kundu says as he displays one video showing a shoplifter getting around self-checkout by typically only scanning some of the items.

“Watch that! He just kicks the basket across the floor,” Kundu says, shaking his head. “Because honestly, the easiest way to beat the self-checkout is just not to put the stuff on there in the first place!”

In other transaction videos, customers ring up pricey produce at the price of something less expensive, say, bananas. Or they scan cheap items and put more expensive ones on the weight sensor.

“A liter of vinegar and a liter of vodka weigh the same,” Kundu says matter-of-factly.

In another video, a brazen shopper steals some items, and then calls over the attendant, asking for help getting her coupons accepted on the items she’s not stealing.

“This is a pretty common thing,” Kundu says. “Because you might as well get a discount on the few things you paid for.”

U.S. retailers lose more than $10 billion each year at checkout, mostly from cashiers in cahoots with customers. With self-checkout, the cashier and the customer are the same person. Kundu says self-checkout loss rates are up to five times higher than manned checkout.

Screenshot from StopLift's product-in-development that would alert store attendants to suspicious transactions in real time. (Courtesy)

Screenshot from StopLift’s product-in-development that would alert store attendants to suspicious transactions in real time. (Courtesy)

Right now, StopLift’s service only tells stores which transactions look suspicious after the fact. At its offices near Alewife station in Cambridge, StopLift is testing a service that would alert employees as it’s happening.

“OK, I’ve got some items, so I’m gonna scan the first one,” Kundu says, demonstrating the product in development, prompting alarm beeps. “As you see, intervention required.”

For now, though, many retailers are holding off from deploying self-checkout. Others, including StopLift client Woods Supermarket in Sedalia, Mo., are staffing up with aggressive hospitality.

So when self-checkout attendants are being super nice to you, they may just be trying to find out (like Santa Claus!) whether you’re being naughty or nice.

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