Wegmans ends self-checkout app after too much shoplifting

New York(CNN Business) In 2019, Wegmans, the cult-favorite northeastern grocery chain, rolled out a new mobile app that allowed customers to scan, bag and pay for groceries while they shopped and then skip the checkout line altogether.

The app, Wegmans SCAN, promised customers a quicker checkout and also let them see a running total of their purchases as they shopped.

This week, the grocer announced that it is ending the app because of rampant shoplifting.

"Unfortunately, the losses we are experiencing prevent us from continuing to make it available in its current state," the company said in a statement. "We've made the decision to turn off the app until we can make improvements that will meet the needs of our customers and business."

Wegmans did not provide any details on the losses experienced with the app.

The chain debuted its "scan-and-go" app as Amazon (AMZN) was beginning to ramp up its cashier-less Amazon Go stores. Many other traditional retailers also rushed to keep pace with Amazon and introduced their own scan-and-go style apps. Wegmans called it the "right technology" at the "right time."

Changing habits

This type of mobile technology has become increasingly popular among younger and more technologically fluent shoppers. It also gained traction during the pandemic as consumers looked to reduce close interactions with employees and other customers.

But scan-and-go has come with unintended consequences for stores: higher levels of shoplifting, fraud and other losses than would normally occur at traditional checkout lanes staffed by cashiers.

In a 2018 report on losses associated with self-checkout systems, Adrian Beck, an emeritus professor at the University of Leicester in the UK, said scan-and-go "currently offers far fewer opportunities to amplify risk and enhance detection" compared to regular cashier lanes or self-checkout kiosks.

There are many types of scan-and-go thefts, including customers who intentionally do not scan items, or scan cheaper items than what they put in their carts.

Self-checkout abusers feel it is "easy to do, reaps rich rewards, and even if they are caught, leads to little or no sanctions being applied," Beck said in the report, which analyzed 140 million scan-and-go app transactions.

One retailer shared data with Beck comparing its stores with and without scan-and-go apps. Those with the technology had a loss rate 18% higher than those that did not.