Shrink Happens 
Closing the Self-Checkout Loopholes 

Self-checkout IS supposed to be the ultimate win-win: faster lines for customers and lower labor costs for retailers.  

But somewhere along the way, it also became one of the biggest sources of shrink (damaged, lost or stolen items) in modern retail. 

“Self-checkout is where shrink is really exploding,” said TRG Account Executive Ami Stephens. “At this point it’s on every retailer’s radar.” 

Truth is, these retailers face a difficult tradeoff: customers love the convenience of scanning items themselves, but every unscanned product, mistyped code or intentional theft erodes margins.  

“Of course everyone wants self-service, but nobody has totally solved the shrink problem yet,” added Stephens. “When we head to big gathering like NRF, it’s one of the first things people want to talk about — how to keep convenience without bleeding margin.” 

The concern isn’t just about outright theft. Honest mistakes, distracted customers or system glitches also contribute to the problem. And while each incident may seem small, the losses can add up to billions when you spread them across thousands of stores. 

Modern tools for modern retail 

Shrinkage is not a new issue, but the traditional defenses are really starting to show their age. Take electronic article surveillance (EAS) — you know, those hard plastic tags that trigger alarms at the door.  

Once upon a time these little tags were the standard. Not anymore. 

“Alarms at the door just aren’t enough anymore,” said JW Franz, TRG’s Director of Innovation and an expert in next-gen tools like machine vision and RFID. “You really need item-level data to know what walked out. Otherwise, you’ll know something left, but you won’t know what it was or why it matters.” 

Franz says in a world of self-checkout, ambiguity is the enemy. Was it a skipped scan, a cashier error or an intentional theft that caused the issue? Without item-level visibility, retailers are left guessing. 

That’s where modern methods like RFID come in. Unlike barcodes or EAS alone, RFID tags can be serialized, giving every item its own digital identity. 

“The real leap with RFID is this serialization,” Franz said. “Every item has its own identity. That visibility really changes everything.” 

With serialized RFID, retailers don’t just know that an item left the store — they know what it was, where it came from and how often it happens. That data can be used to uncover patterns, from specific product categories to times of day, and inform smarter prevention strategies. 

To speed up adoption, some retailers are even beginning to leverage Hybrid RFID and EAS tags that bring modern functionality without requiring a complete changeover in store workflow. 

“The Hybrid RFID/EAS systems can give you the best of both words right now,” said Franz. “You get the serialized data for inventory and the alarm functionality for theft and it all works within the footprint of the industry standard EAS tag, which basically everyone can work with.” 

Away from physical checkout, many retailers are also piloting AI-enabled cameras and advanced analytics to further tighten control without slowing down shoppers. 

“Cameras are a great tool — not just for preventing loss but for understanding store traffic and patterns,” said Stephens. “Retailers want visibility into loss without slowing the customer down and cameras are great for this—especially now that AI has developed to the point where it can reliably monitor the footage for issues.” 

The ultimate goal is “frictionless loss prevention,” a series of largely automated systems and tools that can stop theft and prevent mistakes in real time while allowing honest customers to move quicker than ever through checkout. 

Closing the Loophole 

The message from the front lines is clear: shrink at self-checkout is not going away on its own. If you want to take control of your in-store experience, it’s going to take the right strategy and the right partnerships. 

“Self-service obviously isn’t going anywhere,” said Stephens. “It’s here to stay, but it’s going to have to evolve. That starts with retailers realizing that customer experience and loss prevention are really two sides of the same coin.” 

Franz agrees. “Once again, it’s no longer just about setting off alarms and tracking shrink in a spreadsheet,” he said. “Like anything else in modern retail, it’s about knowing exactly what happened, when it happened and why.” 

As TRG prepares for NRF 2026, we know retailers will be looking for more than the latest loss detection tools. They’ll be looking for credible strategies to integrate them into a sustainable model of self-service. 

Shrink happens, sure.  But the tools to close many of the most common loopholes are already here. The real question for retailers is, who can help them put these tools to work most effectively? 

Obviously, we have some opinions …