The Real Reason Walmart, Target and Costco Are Axing More Self-Checkouts — As States and NYC Push Limits
The Real Reason Walmart, Target and Costco Are Axing More Self-Checkouts, As States and NYC Push Limits
Remember when self-checkout felt like a gift from the future? You'd slide your three items across the scanner, beep, beep, beep — tap your card, and waltz past the line of carts waiting for a cashier. You felt efficient. Maybe a little smug. (No judgment. We all did.)
Well, the future is apparently being returned for a refund.
Across the country, the machines that were supposed to save retail are being unplugged, roped off, or flat-out hauled away. Walmart is quietly removing self-checkout kiosks from store after store. Target has capped self-checkout at 10 items. Dollar General, the chain that once bet its entire future on self-service, yanked the technology from 12,000 locations in 2024 alone.
And now? State lawmakers from California to Rhode Island are drafting legislation that could permanently change how, and whether, you scan your own groceries.
So what's actually going on? Let's unpack it.
The Shrinkage Problem No One Wants to Talk About
Here's a word you're going to hear a lot: shrink.
In retail-speak, "shrink" is inventory that mysteriously vanishes, through theft, administrative errors, or damage. And self-checkout, it turns out, is a shrink factory.
The numbers are staggering. Studies show self-checkout lanes experience shrink rates around 3.5% to 4% of sales, compared to approximately 0.21% at staffed registers. That's not a small gap, it's a chasm. Theft at self-checkout can be up to 65% higher than at traditional lanes.
"Largely unattended self-checkouts provide a potential opportunity for folks to help themselves," Matt Schultz, LendingTree chief consumer finance analyst, said in a statement. "Even though people know that stealing is wrong and most understand the risk they're taking, tough times require tough choices."
And this isn't just organized retail crime rings, though those are absolutely part of the problem. A California woman was convicted of stealing over $60,000 in merchandise from Target using self-checkout machines during a 100-visit crime spree. She'd scan an item, insert a coin or small bill, and simply walk out the door.
But the bigger issue might be the accidental theft — the item that doesn't scan properly, the barcode you thought faced the right direction, the produce you genuinely forgot to weigh. 36% of users admit they've accidentally left with an unscanned item, and here's the kicker: 61% of those who accidentally took something said they kept it the last time it happened.
Retailers are bleeding money, and self-checkout is the wound they can't seem to stitch up.
How Each Major Retailer Is Handling the Pullback
Walmart, Strategic Retreat, Not Total Surrender
Walmart hasn't announced a nationwide self-checkout ban. Instead, it's taking a surgical approach: pulling machines from stores with the highest theft rates. Think Shrewsbury, Missouri. Cleveland, Ohio. Albuquerque, New Mexico. Los Angeles.
"Walmart regularly reviews stores based on theft and customer experience and takes self-checkout out of their highest-theft stores," retail expert Bryan Gildenberg told the Daily Mail. "I would not read much more into it than that."
The company frames the shift as a customer-service play, shorter lines, more personalized interactions with associates. But when a Walmart in Missouri ripped out every self-checkout machine, the store saw a sharp drop in police calls and arrests. The connection isn't subtle.
In some test stores, Walmart has gone even further: reserving self-checkout lanes exclusively for Walmart+ members. Pay for the subscription, get the privilege of scanning your own milk.
Target, The 10-Item Cap and What It Really Means
Target has been perhaps the most publicly visible in its pullback. The retailer now limits self-checkout to 10 items or fewer — essentially converting those lanes into express checkout.
Target insists the change isn't about theft. A representative told Fox Business the shift was "in the works for over a year" and driven by internal testing that showed it increased customer satisfaction.
But industry experts aren't buying it. Target reported nearly $500 million in shrink-related losses in 2023 compared to the previous year. Retail analyst Neil Saunders told CBS News that self-checkout "is an area of the store people can steal things" and that retailers like Target are scaling it back to reduce theft-related losses.
Costco, A Third Way With Scan-and-Go
Costco has taken perhaps the most interesting approach: it's not removing self-checkout, but it's not leaving it unmanned either.
The warehouse giant has been testing a "scan-and-go" system where a staff member scans items in your cart while you wait in line. By the time you reach the register, your items are already loaded, you just scan your membership card and pay. At self-checkout stations, Costco now requires members to show photo ID that matches their membership card.
It's a clever middle path: keep the technology, but add human oversight at critical friction points.
Dollar General, The Most Dramatic Reversal
It's worth pausing on Dollar General because their story is a cautionary tale. The chain removed self-checkout from 12,000 stores — more than half its locations, in a single year. The CEO directly blamed "shrink," calling self-checkout the company's biggest obstacle.
When a discount retailer voluntarily gives up the labor savings of self-checkout, you know the math has fundamentally broken.
The Legislative Wave: States Are Stepping In
Retailers aren't the only ones rethinking self-checkout. Lawmakers across the country are drafting bills that would regulate, or outright limit, how these machines operate.
New York City's 15-Item Limit Bill
In March 2026, NYC Councilmember Amanda Farías introduced an amendment to the city code that would limit self-checkout to 15 items at supermarkets and pharmacies. It also requires stores to staff one employee for every three self-checkout kiosks. Non-compliant businesses would face daily fines of up to $100 per missing employee.
"We've seen the consequences of removing workers from these spaces: increased retail theft, less oversight, fewer protections for both workers and customers, and generally decreased safety," Farías said while introducing the legislation.
California Senate Bill 442
California's bill, sponsored by State Senator Lola Smallwood-Cuevas, would prohibit grocery stores and retail drug businesses from offering self-checkout unless at least one manual checkout station is staffed. It also imposes a 15-item limit and bans self-checkout for items requiring ID.
The bill passed unanimously out of the Assembly Labor and Employment Committee in June 2025. A previous, stricter version, which required one employee per two self-checkout machines, failed to reach the governor.
Rhode Island Caps Self-Checkout at Six Machines
Rhode Island's approach is the most restrictive: the Senate approved legislation capping grocery stores at no more than six self-checkout units per location and requiring one staffed checkout for every two self-checkouts in operation.
Senate President Valarie Lawson framed the bill as protecting workers and elderly customers: "We've all experienced frustration at a self-service checkout, and this experience can be far more challenging for elderly members of the community."
Other States Joining the Movement
- Massachusetts has a bill limiting grocery stores to eight self-checkout stations and requiring at least one manual lane per two self-checkout lanes.
- Tennessee proposed legislation requiring one staffed checkout per four self-checkout stations and a 15-item limit.
- Washington State has rules requiring no more than two self-checkout stations to be monitored by one employee at a time.
The legislative momentum is unmistakable, and it's bipartisan in many cases.
What Self-Checkout Theft Actually Looks Like (The Data)
Let's zoom in on the consumer behavior driving these decisions, because the psychology here is genuinely fascinating.
A LendingTree survey found that 27% of American consumers deliberately skip scanning items at self-checkout, up from 15% in a similar survey conducted a year earlier. Nearly half of those who admitted to stealing cited economic pressures and rising prices as justification.
Meanwhile, 69% of consumers say it's easier to steal from self-checkout than from a cashier. And 20.1 million Americans have stolen from a self-checkout kiosk, with 8.85 million planning to do it again.
The "walkaway" problem, where customers leave without completing payment, accounts for roughly 0.3% to 0.7% of self-checkout sales value, though some retailers report "much higher figures" in certain store formats. These incidents are often a mix of human error, poor user experience, and opportunistic behavior.
Side note: I find the psychology here oddly relatable. When a machine glitches and a voice says "Please wait for assistance" for the fourth time while nobody comes, there's a very human part of your brain that whispers, "You know what? This avocado is free now." Most people don't act on it. But enough people do.
The counterintuitive twist: 77% of shoppers still prefer self-checkout because they believe it's faster. And 43% of consumers, including more than half of those aged 18 to 44, explicitly prefer using self-checkout over traditional lanes.
This is the tension at the heart of the story. Shoppers want speed and control. Retailers want to stop bleeding inventory. And nobody has quite figured out how to deliver both.
Is This the End of Self-Checkout? (Spoiler: Probably Not)
If you think self-checkout is going the way of the DVD rental kiosk, think again.
Industry insiders broadly agree: self-checkout will never sunset. But the model is evolving fast. "There may be a shift in the totals of traditional checkouts versus self-checkouts as retailers find what works best for their customer base, but it'll never expire," said Keith Carpentier, CEO of Qbuster Technologies. "This is because people like choice."
The future looks less like unattended kiosks and more like supervised automation:
- AI-powered camera systems that track customer movement and detect unscanned items in real time.
- Smart carts (like Instacart's Caper Cart) that scan items as you place them in the basket, eliminating the checkout step entirely.
- Scan-and-go apps that let you pay on your phone and skip the register altogether. Costco and Sam's Club are already testing these.
- Computer vision and weighted shelf sensors with 99% accuracy, allowing retailers to track inventory in real time.
Early adopters of next-generation smart self-service systems are reporting an average 30% increase in sales. One college campus saw a 250% weekly increase after replacing vending machines with smart stores.
The self-checkout of 2030 won't look like the self-checkout of 2020. It'll be smarter, more supervised, and, retailers hope, much harder to exploit.
What This Means for You, the Shopper
If you're reading this between errands, here's the practical bottom line:
Lines might get longer in the short term. As retailers reduce self-checkout kiosks and add staffed lanes, peak-hour wait times will likely increase, especially at Walmart and Target.
Membership has its privileges. In some test stores, Walmart is reserving self-checkout exclusively for Walmart+ members. If you're a frequent Walmart shopper, that subscription may start looking more attractive.
Expect more human interaction. This could be a blessing or a curse depending on your personality. But for anyone who's ever stood helplessly next to a flashing red light while a machine intones "unexpected item in bagging area", having a human nearby might actually be an upgrade.
The 10-to-15-item limit is becoming standard. Whether through retailer policy or state law, the "express lane" model is the new normal for self-checkout. Plan your shopping accordingly.
Self-checkout was sold to us as a win-win: lower labor costs for retailers, faster exits for shoppers. The reality turned out messier. Shrink exploded. Customer frustration mounted. And now, in a rare moment of alignment, both corporate boardrooms and state legislatures are saying the same thing: we need more humans in the loop.
The machines aren't disappearing entirely. But the era of the completely unattended self-checkout lane, the one where you could scan (or not scan) 50 items with nobody watching, is rapidly coming to an end.
And honestly? That might not be such a bad thing.