Five Below is the latest chain to retreat from self-checkout

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Discount retailer Five Below is cutting back on self-checkout, with plans to eliminate them entirely from some stores, CEO Joel Anderson told investors at the company’s earnings call on Wednesday.

The measure is intended to combat a rise in shrink — the industry term for missing inventory — which Anderson said had been higher than expected at Five Below.

Anderson said that in late 2023 the company had tested “many” initiatives to reduce shrink, the industry term for missing stock.

From January, Five Below’s stores all switched to what he called an “associate-assisted checkout,” he said. He said that at these checkouts, staff would scan the items and then the customer would finish the transaction by paying using cash or card.

“That is what we believe is a nice balance between we’re ensuring everything is being scanned,” Anderson said.

“We expect to have 75% of our transactions chain-wide assisted by an associate with a goal of 100% in our highest-shrink, highest-risk stores to be fully transacted by an associate,” he added.

Anderson said that at Five Below’s stores with the highest shrink levels, staff is checking receipts, and more security guards are present.

Earlier this month, Dollar General also rolled back on self-checkout. The company said it would remove this service from 300 locations and add assisted checkout to 9,000 stores.

Retailers have been rethinking their self-checkout strategies over concerns that they’re facilitating theft. Some customers use self-checkouts to avoid scanning some items or putting expensive products through as lower-cost items.

Target is limiting self-checkout to 10 items or fewer at most of its stores and is letting store leadership choose to restrict the hours that self-checkouts are in operation.

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