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Dollar General Reduces Self-Checkout Options to Increase Engagement, Decrease Shrink

Dollar General is cutting back on its offering of self-checkout options, saying it is doing so to improve the customer experience and to reduce inventory shrink.

This change follows a year in which the retailer saw an increased level of shrink, the company said in a Thursday (March 14) earnings release. Inventory shrink, or shrinkage, is the loss of goods, especially by theft.

The company has self-checkout options available in more than 14,000 stores, Dollar General CEO Todd Vasos said Thursday during the company’s quarterly earnings call.

Those stores are equipped with a self-checkout solution that can be converted to associate-assisted checkout, he added.

In 9,000 of those stores, Dollar General is immediately converting some or all of the self-checkout registers to assisted-checkout options, Vasos said. The goal in those stores is to drive customers to staffed registers first, and use assisted-checkout options only when traffic is high and lines are long.

In the remaining stores with self-checkout, the retailer has begun limiting self-checkout to transactions that include no more than five items.

In 300 stores — the ones with the highest shrink — Dollar General will completely remove the self-checkout option.

“Collectively, we believe these steps are in line with where the customer wants us to be, which includes increasing personal engagement with them at the store,” Vasos said during the call. “Additionally, we believe these actions have the potential to have a material and positive effect on shrink as we move into the back half of the year and into 2025.”

The company is making these changes after deploying an artificial intelligence (AI) solution from Everseen that monitors shrink and determines whether that shrink — in the form of items that were not scanned by the shopper at self-checkout — was purposeful or inadvertent, Vasos said.

Dollar General deployed this solution in the fourth quarter and used it to monitor hundreds of thousands of self-checkout transactions in its stores, he added.

“Long story, here to say, we’ve made decisions based on that AI activity to pull out in 9,000 stores and go to that assisted checkstand,” Vasos said. “That should immediately do a lot for us. Putting someone at the front end of the store, as we did in October, immediately will help our shrink.”