Theft from self-service checkouts: What it means for your business

Theft from self-service checkouts has been in the news lately, with one researcher claiming stock losses of nearly 4% compared with 1.5% from the shop floor. The risk, he says, is that this behaviour normalises theft.

Fudge factor

We’re all prone to stretch the limits at some time or other. Diving a few kilometres over the speed limit, taking a few items of stationery from work or not telling the shop assistant if they’ve given you too much change are behaviours we might find it easy to justify to ourselves.

Behavioural economist Dan Ariely describes this as the “fudge factor”: that slightly fuzzy moral area between what is clearly wrong and what is clearly right.

Importantly, the fudge factor allows us to gain some advantage while still maintaining a positive self-view. We are able to hold on to the belief that we are good people even when we don’t always act according to the letter of the law. 

Four conditions that make it easier to fudge

As a business it is wise to understand the psychological conditions that facilitate “fudging” by customers, staff and suppliers.

1. Distance from cash

Where taking a pencil from work doesn’t feel like theft, taking a few dollars from the petty cash or register certainly does. As Ariely writes in his book The (Honest) Truth About Dishonesty: “People are more apt to be dishonest in the presence of non-monetary objects- such as pencils and tokens-than actual money”.

Self-service checkouts, where people are dealing with non-monetary products (their groceries) and often swiping a card to pay, create a psychological distance between money and the concept of theft which makes it psychologically easier to be dishonest.

2. Anonymity

We act differently if we know we are being watched, even if we only think we are. People paid almost three times more to an honesty box when a picture of a pair of eyes was pasted on the box compared to a picture of flowers, for instance.

The supermarket is a busy place with lots of movement. Where at a normal register shoppers have to engage with the assistant, at a self-service register you are not under the overt gaze of anyone. The supermarket might consider adding some pictures of eyes to the self-service registers to reduce theft.

3. Moral licensing

Moral licensing refers to our tendency to balance being good with being a little bit bad – we give ourselves ‘licence’ to transgress. In one study people who had done a good deed (e.g. buying environmentally safe washing powder) were more likely to cheat when given the opportunity. The opposite held true too: when people had done something bad they tended to want to make it up by doing something good. 

In a broader sense, shoppers might be justifying their theft by pointing to the huge profits of supermarkets – licensing their behaviour by comparing it to the corporate greed of the large supermarket chains. In fact, according to the self-serve checkout researcher, “people are very good at neutralising their moral concerns when thinking about stealing things … and people can end up feeling they have a right to get their share of the corporate profits”. 

4. Social norms

The researcher who investigated self-service theft rightly expressed fears that it will become normalised behaviour. The more people do it, and the more we hear about it, the more of a social norm it will become. It’s the same rationale underpinning the “Broken Windows Theory” in crime prevention, where the social signal of what is acceptable must be managed. 

What to do about fudging?

Now that you are aware of the conditions that encourage fudging, what do you do about it?

1. Remind people of the monetary value of items
2. Engage them so it’s harder to be anonymous, even if this means pictures of eyes, faces and bringing more mannequins into the space
3. Remind those who behave honestly that this is the norm, and don’t assume a ‘good person’ in one domain won’t transgress in another

For other ideas on how to protect your business from dishonesty click here.

Bri Williams runs People Patterns, a consultancy specialising in the application of behavioural economics to everyday business issues.