American retailing giant Walmart continues to lead the way in using artificial intelligence to curtail theft at its self-service checkouts, but Australian stores are not far behind in using hi tech devices to stop shoplifting.
With theft from Australian retail chains, including Woolworths and Coles supermarkets, rising to an estimated $3b a year, it is a major economic problem both here and overseas.
Coles and Woolworths are trialing new technologies to reduce the two most popular scams used by shoppers at self-service checkouts – incorrect scanning and blatant stealing – and are hopeful they at least reducing their losses.
Overseas, Walmart has accelerated its fight against theft by installing AI driven cameras in a thousand of its U.S. outlets.
Discreetly called Missed Scan Detection to avoid accusing customers of theft, the system is designed to avoid “shrinkage” – the politically correct term used by retailers to describe theft, scanning errors, fraud and any other illegalities to covert stock without paying.
The U.S. National Retail Federation says its members lost 1.33 per cent of their revenue to shrinkage in 2017 – an estimated $47b. That’s $4b by Walmart alone.
Hence the company’s huge outlay by Australian standards to increase security.
“Walmart is making a true investment to ensure the safety of our customers and associates,” a spokeswoman for the company says.
“Over the past three years the company has invested more than half a billion dollars in an effort to prevent reduce and deter crime in our stores and parking lots.”
Ireland-based artificial intelligence company Everseen is supplying Walmart with some of the technology for its detection program.
“Everseen overcomes human limitations. By using state of the art artificial intelligence, computer vision systems and big data we can detect abnormal activity and other threats,” the spokeswoman says.
Shrinkage has declined in stores where the system was installed two years ago.
In Australia shoppers looking to defraud a supermarket mostly register cheaper prices for products on the computer
They either punch-in a cheaper price for what they are buying (e.g. selecting avocadoes and punching in the price for lollies) or they simply do not scan the product at all.
Coles and Woolworths’ new technologies are designed to stop shoplifting and incorrect scanning.
The innovations include new surveillance cameras at self-service checkouts.
“We know the vast majority of our customers do the right thing at self-service checkouts. We’re trialling new security measures for those that don’t,” a Woolworths spokesperson said.
Coles is also trialling anti-theft technology, using cameras and monitors that display real-time footage of shoppers scanning each item at self-service checkouts.
Woolworths, like Coles, says it has faith in the basic honesty of its customers but has no option to pursue those who are not.
“Like a number of retailers, we work with police to reduce shoplifting,” a company spokesperson said.
“There are also trained, covert security officers in our stores nationally and they’re catching hundreds of thieves every week and reporting them to police.”
A psychologist says it would be wrong to label everybody who scans in a wrong price at a checkout as a thief.
“It could be a genuine mistake. They might not know the difference between a big mandarin and an orange or different type of bananas or apples,” he said.
He suggested it might also be retaliatory action because customers have to select then price their purchases, then ring up the charges as well as load their goods into their car then the supermarket owes them some compensation. Retailers are also anxious to avoid scenes at a supermarket by accusing shoppers of theft for fear of causing a scene or leaving themselves open to legal action if they are wrong.