Nobody likes being accused of theft. That includes people who are actually thieves, but their feelings aren't all that important since they’re actually stealing,
The problem — and it's a big one — is that many of the ways retailers fight theft make honest customers feel like criminals. That starts with small things like Walmart (WMT) -) and Costco Wholesale (COST) -) employees checking your receipts when you leave their stores.
Related: Costco makes a major change to stop theft, keep non-members out
Yes, they do it to everyone, but it's still not a pleasant feeling for honest folks worried that they may have missed or improperly scanned an item at self-checkout. It gets uglier, however, when companies use sneaker techniques to cut down theft, specifically at self-checkout.
In Walmart's case, the retailer has technology that allows a store associate to shut off a self-checkout. The worker is not supposed to tell the customer that they're suspected of theft. Instead, the worker is to pretend that it's a technical problem.
That's a strategy that inconveniences honest people and creates a grey area. Did the person steal a can of soup or did it just not scan?
Image source: Walmart
Here's how Walmart's technology works
Walmart workers in the self-checkout area are given devices called "TC Devices," according to a former Walmart employee's TikTok video. Those machines let the worker discreetly watch what people are buying at the self-checkout line.
Never mind that some people use self-checkout because they're buying embarrassing items they don't want a clerk to see, Walmart is spying on you looking for theft.
"We're able to see everything you are purchasing, how much your total purchase is, and how much each item costs," the former employee shared.
The TikTok personality, who uses the name "obeygoddess," showed what the TC Device screen looks like, and it literally shows a sort of running receipt of a customer's purchases.
If something appears out of the ordinary, the worker can hit the pause button which freezes the machine. Then, a manager can go over and evaluate the situation.
At best, that's an inconvenience when the customer is not shoplifting. At worst, it's a dangerous situation as the suspected thief can become hostile — a situation Walmart clerks and checkout personnel are not fully trained to handle.
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Walmart policies raise tension
If you're not stealing, self-checkout can still be stressful because it's easy to make a mistake. People who are stealing can use anger and indignation as a way out of being caught since Walmart workers aren't specifically allowed to accuse them of theft.
This has led to an increase in hostile situations for the chain's workers, according to Business Insider. Even though the workers are trained to blame the machine and not the customer for items not being scanned, having to engage them at all creates raised tension.
"It's really uncomfortable, and it becomes, like, a safety issue," one worker told the website. (Names were redacted in the Business Insider article to protect the group of seven Walmart employees interviewed for the article from reprisals from the chain).
Workers are not given training or scripts to de-escalate tensions, according to the news article.
Walmart does not share specific theft numbers, but CEO Doug McMillon did comment on shrink, an industry term for items that are stolen, during the company's second-quarter earnings call.
"Shrink is an important part of margin," he said. "Shrink has increased a bit this year. It increased last year. It's uneven across the country. It's not in every market. Some markets are higher than others."
Rival Target (TGT) -) has faced similar problems, and CFO Michael Fiddelke talked about it during the retailer's third-quarter earnings call.
"The rising cost of inventory shrink represented a 40 basis point headwind to our third-quarter gross margin rate. While we're encouraged that this impact was smaller than expected and better than we faced earlier in the year, growth in shrink remains a significant financial headwind and we're determined to continue making progress in the years ahead," he said.
