Retail shrinkage represents a major challenge for the industry and, among the many vulnerable points inside a physical store, the checkout stands out as one of the most critical.

This stage is particularly concerning because it represents the final step of the shopping journey—the moment when products leave the store, and revenue is recorded.

A lack of efficient control at checkout can directly impact profitability, financial projections, cash flow, operational quality, and even the customer experience.

These bottlenecks can also hinder customer loyalty and the attraction of new consumers in an increasingly competitive retail environment.

To give you an idea of the scale of losses at checkout, the Abrappe Retail Loss Survey in Brazil 2024 reported that the retail sector accumulated losses of more than R$ 34 billion in 2023 alone.

This figure represents a 10% increase in losses and serves as a warning for the urgent need for more effective management of risks and operational failures that affect day-to-day store operations.

Within this scenario, store operators must give special attention to checkout.

After all, multiple retail studies indicate that approximately 30% of store losses occur at checkout.

The causes range from operational errors and system failures to deliberate fraud.

To minimize these issues, it is essential to understand their origins and implement effective solutions.

In this article, I highlight the main causes of checkout losses and how technology can support your store in overcoming these challenges.

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Checkout Losses: Error or Fraud?

When talking about losses at checkout, it’s common to assume they are all the result of fraud.

However, many are caused by operational errors or even equipment issues, such as barcode scanner failures.

For example, the cashier may get distracted and forget to scan an item or mistype a product code.

Often, the rush to process purchases due to long lines also contributes to mistakes.

That said, there are indeed cases where losses stem from fraud—committed either by dishonest employees or by customers attempting to bypass store security.

Some schemes even involve collusion between the cashier and the customer, deliberately working together to commit fraud.

Regardless of the case, the result is the same: significant losses for the store.

But how can retailers overcome this challenge?

  • Strict checkout control policies;
  • Continuous training and staff awareness programs;
  • Real-time monitoring supported by new technologies;
  • Investments in security processes and solutions for front-of-store management;
  • Efficient operational management, including strategies to reduce checkout lines.

Throughout this article, we’ll explore the role of technology in reducing checkout losses. But first, let’s take a closer look at the most common causes of this retail challenge.

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5 Main Causes of Checkout Losses in Physical Stores

Below are the five main causes of checkout losses, their impacts, and possible solutions:

1. Failure to Scan Products

This occurs when an item passes through checkout but is not properly scanned.

It may happen unintentionally, due to scanner malfunctions or cashier distraction. At self-checkouts, it often results from customers not knowing how to use the equipment properly.

In other cases, it may be intentional fraud—for example, when a cashier deliberately skips scanning an item, either alone or in collusion with a customer.

Solution: Technology that triggers real-time alerts for unscanned items, combined with remote auditing using audio and video resources linked to receipt data.

2. Barcode Switching

Barcode switching happens when a product is scanned under the wrong code.

This is common with produce, meat, and other items where labels are applied manually in-store.

Fraudulent customers may also deliberately place the barcode of a cheaper item on a more expensive one. For example, swapping a vodka barcode for a bottle of whiskey.

Solution: Staff communication and training are essential to minimize errors. Checkout auditing systems, such as the Darwin Platform, detect these mismatches by cross-checking video footage with checkout data.

3. Quantity Errors

This occurs when products are sold in quantities different from the actual purchase—common with items sold in packs or cases, such as milk cartons, beer, or soda multipacks.

The mistake may come from miscounting, cashier distraction, or intentional fraud.

Solution: Proper staff training combined with real-time or post-event auditing technologies helps prevent these errors.

4. Price Check Mode Misuse

The price check function can be misused, either accidentally or deliberately.

For instance, the cashier might forget to switch back from price check mode to sales mode, allowing products to pass without being recorded. In cases of fraud, they may leave the system in price check mode to simulate scanning.

Solution: Systems that require confirmation to change operating modes at checkout. A recent innovation—the Remote Supervisor—allows these validations to be done remotely, quickly, and with greater control, without needing an in-store supervisor.

5. Financial Fraud

Finally, financial fraud at checkout can take many forms:

  • Unauthorized cash drawer openings,
  • Cash skimming during drops,
  • Manipulation of recorded amounts.

Without proper monitoring and auditing, these practices become easier to execute, causing direct financial damage to retailers.

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Intangible Losses: Impact on the Customer Experience

Checkout losses don’t just affect revenue—they also impact customer experience.

Long lines, billing errors, and poor service can frustrate customers. Naturally, these issues directly harm loyalty and brand reputation.

According to an international survey, over 80% of customers stop shopping with a brand after just one negative experience.

In other words, ensuring a smooth, error-free checkout not only improves customer satisfaction but also builds trust with your store.

Moreover, effective checkout control can be decisive for the long-term financial sustainability of retail operations.

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Checkout Loss Prevention: A Core Retail Challenge

As we’ve seen, checkout is one of the most vulnerable points in retail, as it involves both merchandise leaving the store and financial transaction recording.

Without proper control, this stage can generate considerable losses, harming store profitability.

The most common issues include unscanned items, barcode handling errors, and financial fraud.

Often, these problems are linked to inadequate staff training, cashier distraction, or misuse of checkout systems.

The absence of monitoring and control further increases risks.

The good news: technological advances now provide efficient solutions to prevent and mitigate these losses.

Remote auditing platforms with real-time intervention capabilities allow retailers to quickly identify errors, improve security, and deliver a safer shopping experience.

Still, it’s crucial to combine innovation with proper staff training and supervision.

This way, retailers can transform checkout from a major pain point into an opportunity for improved customer experience and loyalty.

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The Role and Benefits of Technology in Checkout Monitoring

Using advanced solutions is now essential for retail loss prevention. Today’s market offers powerful and adaptable technologies tailored to different store formats and retail business models.

For example, Inwave’s Darwin Platform is an innovative tool that performs remote auditing by cross-referencing video footage and transaction data in real time.

It centralizes all front-of-store operations into a single, intuitive platform.

The result: more efficient fraud and error detection, reduced losses, improved security, and a more positive customer experience.

With simple integrations that adapt to existing store hardware and systems, Darwin also provides a set of valuable KPIs that help managers optimize day-to-day operations.