By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The FT on Friday brings us news from the frontline of the war on cash in the UK, Checking out the UK’s first till-free grocery store:
This week, Sainsbury’s opened what it billed as the UK’s first till-free grocery store. This doesn’t just claim to be cashless, but cardless. After downloading a bright orange app on their smartphones, shoppers scan their own groceries as they walk around, then touch to activate Google or Apple Pay — and simply walk out.
Okay, before getting to some of the problems that may afflict those who choose to use this latest innovation let me address a threshold issue.
What about those who don’t want to download a store’s app to make a couple of purchases?
Ditto those 8 million Britons who the FT notes would struggle in a cashless society – and who tend to skew older, and poorer.
Does Sainsbury’s still want their pounds and pence?
The answer, for the moment is yes – even at this flagship store. The FT relates how after a customer failed to satisfy the conditions necessary to go cashless – being a member of the Sainsbury’s loyalty program and downloading the app – a customer asked whether she could still get groceries at this store:
She was reassured that she could still pay the conventional way — the second member of staff stood behind a low-key counter in the corner where it is still possible to pay by cash or card. There was a queue of five people. Seeing this, another woman who was trying to buy a muffin and a banana put her shopping back and walked out. This is clearly not the bright orange future that Sainsbury’s envisaged.
Which makes me wonder: what is the point?
Of course, I know what the point is. It’s to convince people there is no alternative and to embrace the brave digital future. Which in turn would allow Sainsbury’s to replace paid staff with unpaid customer effort, as well as do deep and thorough data mining of anyone who chooses to use this “service”.
Flaws for Those Willing to Take a Flutter
Let me now turn to a couple of problems with this system for those who either choose to embrace this brave new digital world – or cannot be bothered to resist it.
First, we all know how well these automated systems work in reality. The digital scales that do not register. The conventional self check-out till that doesn’t work – even leaving aside the app issue.
These systems are far from foolproof – and they do fail. In the face of a failure in a self-scan checkout, coupled with insufficient sales staff to assist, does the customer just think to him/herself “screw them” and make off with his/her (nickel and dime) illicit booty?
The Guardian covered this issue in an article from a year ago, Nation of shoplifters: the rise of supermarket self-checkout scams:
A couple of Tuesdays ago, after a difficult day at work, a thing that happens to me more often than I’d usually care to admit happened once again. At a supermarket self-checkout machine a frozen pizza I tried to swipe wouldn’t register, leaving me irked and full of spite. As a kind of reproach, I prepared to bag the item in any case, but a pang of weary guilt set in. Two choices sprung to mind. Carry on as though nothing untoward had happened, and knowingly steal. Or hail the cashier, who at the time was busy at another till, to fix the machine and right the wrong.
I picked the second option, eventually. Though, to be honest, on another day I might have swayed the other way. Plenty of us do. Need proof? Look online, perhaps at a Reddit thread, and you’ll find anecdotes of petty self-checkout theft delivered with something like a stick-it-to-the-man pride. Expensive grapes are scanned as inexpensive carrots. Prime steaks are swiped as potatoes. The barcodes of pricey objects – wine, beer, spirits, cosmetics – are deliberately obscured by stickers removed from significantly cheaper on-sale items. Some scams have names – “the banana trick” (steaks as potatoes), “the switcheroo” (cheap barcodes for pricey ones), “sweethearting” (when a checkout supervisor only pretends to scan an object before handing it to a loved one, gratis) – though there are so many techniques not all of them do.
The Guardian devoted some attention to the personal morality angle. For those of you so interested, look at that piece. What I’m more interested in is that one rationale for moving to digital systems is supposed to be to deter shoplifting, and reduce human staffing levels.
What the Guardian reports may actually be occurring is that shoplifting might be increasing – at least for those who use these systems:
But any financial gains now appear to be marginal, at least in part due to unforeseen spikes in self-scanning theft. In a recent study a team at Voucher Codes Pro, a sales coupon website, quizzed 2,532 shoppers about their supermarket habits and found that close to a quarter had committed theft at a self-checkout machine at least once. (A figure from the same report suggested that the total cost of items stolen through self-checkout machines in 2017 came in at more than £3bn, up from £1.6bn in 2014, though the numbers are speculative.) Some steal by accident, the study found, perhaps on account of a scanning error – honest mistakes. But many perpetrators know exactly what they’re doing.
Unsurprisingly, retailers are loathe to divulging how much theft may be increasing. Nonetheless:
The subject is fraught with uncertainty. Often it is difficult for retailers to discern between malicious actions and honest mistakes – was the customer absent-minded or consciously fraudulent? – and proving intent can be perilous. Charge an honest shopper with theft and lose their business. Let a perpetrator off the hook and suffer a reduction in profit. [Adrian Beck, emeritus professor of criminology, University of Leicester] describes the scenario as “a legal and customer relations minefield”.
And a second issue. What happens when you get home and realize you thought you bought 100 grams of British back bacon but that the AI has charged you for half a kilo of jambon iberico? What do you do then?
Now, you might contact the store and ask them to correct your billing. But if you’re already home, this dispute will boil down to your word against the algorithm’s. Given how little staff time is going to be available to examine discrepancies – and, how difficult it would be even for technical staff to get to the bottom of the issue, possibly requiring review of CCTV footage – there’s going to be a lot of unverifiable claim and counter-claim.
In these situations, most customers will, if they don’t get matters resolved to their satisfaction — e.g., get your money back – will inevitably fall back on getting a chargeback from their card issuer. Here, for once, the system is on the side of the consumer. Credit cards especially have cast-iron chargeback provisions and even debit cards are broadly amenable to making the merchant prove their billing is correct.
All merchants can do is represent that their algorithms are X% reliable. But even if they’re 99% foolproof, that’s not good enough to sustain a chargeback reversal. And given the amount of time it takes to look into each individual claim in a way which will satisfy the card networks high bar of “compelling evidence” before they’ll uphold the merchants’ versions of events (and subsequent billing accuracy) against what will, typically, be de minimis discrepancies, the default response of merchants is likely to be to simply accept the customer’s claim on unchallenged evidence – at least initially.
If these errors skew randomly, I would imagine more customers might report the discrepancy if the mistake hurts them – and stay silent if it’s in their favor. Of course, if it becomes known that Sainsbury’s accepts customer claims without much fanfare, that opens the way to further gaming of the system.
How long, then, will this whole move to a brave till-free world prove to be sustainable before the increased operational losses invalidate the whole business case?
I wonder.
Back to the FT for the last word:
Jonathan Eley, the FT’s retail correspondent, reckons the journey to a cashless society is being partly driven by the desire of big business to collect data about each and every payment we make. “Cash undermines the espionage effort,” he says.
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A lot of people, like myself, go into a supermarket with a list of things to get, grab them and then get the hell out of there. A lot of people, like my wife, will examine what they are buying, compare the item to what else is on the shelf, work out quantities before selecting, and then head off to the checkouts. Two completely different styles of shopping. But after reading this article and the original FT article, no way in hell would either of us want anything to do with this set-up. It is more expensive, more frustrating, more invasive and with that you have run out of reasons for going to such a supermarket.
> What about those who don’t want to download a store’s app to make a couple of purchases?
A good question. I was faced with this exact dilemma yesterday when a family member suggested we use DoorDash to order from a restaurant. When I checked the app permissions I found it requests every conceivable unnecessary permission — including scraping all of the contacts in your phone (which they can sell to Facebook and other advertisers). In newer versions of Android you can disable individual permissions for an app, but you have to install the app first, which gives it access to your phone, and you have to do it individually for every single app. The process doesn’t scale. Another instance of negative software patterns at work. Note that even checking the app’s requested permissions before you install it requires you to click through two screens, and to know what you are looking for. The info is basically buried.
Other thoughts:
It occurs to me that when an item doesn’t scan, the alternative to flagging down a store employee is to set the item aside. This results in fewer sales. For perishable items it could result in food waste or possibly, if the item gets reshelved, the possibility of food poisoning for the next customer who comes along. At grocery stores I’d say I run into something that doesn’t scan about 1 time in 7. It’s very common for fresh produce not to have labels. This puts me, the customer, in the grips of a moral dilemma whenever I check out — and “doing the right thing” costs me time and money.
Next, regarding various self-scanning scams, I’ve noticed that Target prominently videos you at their self-scanners. This means you have intrusive surveillance at the point of check out and it’s right in the customer’s face. I suppose this is meant to deter you from the various scams, but it’s quite off-putting. Very Big Brother-ish and for me at least, makes me feel self-conscious about my make-up (the image is quite detailed) when all I’m there to do is buy a damn loaf of bread.
Finally, regarding charge-offs, in the digital world at least if you do a chargeback with your card, the company typically “fires” you as a customer. So for example EA or Steam will disable your account and you’ll lose access to whatever other digital goods you purchased through them. This is a standard practice for digital companies. I’m not sure if Google or Amazon do it but it wouldn’t surprise me. I’m sure brick and mortal retailers will follow, meaning even more customers will no longer be able to patronize entire chains of stores. Stores already do this with customers who supposedly “return” too many items so it wouldn’t be totally novel. It would also have the side effect of creating vast new “food deserts” for particular clients.
What a brave new world we live in….
Next, regarding various self-scanning scams, I’ve noticed that Target prominently videos you at their self-scanners.
I noticed that and nowadays if I shop at Target at all, I use the checkout cashier lane. I wonder if they have surveillance there too?
Same at Wall Mart self-checkouts as well ..
I lived in Sydney for 6 years in the poshest postcode (renting, I could never have bought a property in a million years!) The Woolies and Coles both went for self-checkout very early. They clearly thought people round the lower north shore were “honest good hard-working folk”. Yeah right! The press had a field day when they discovered the amount of fraud by customers was sky-high in those rich areas. I was too frightened to scam but I could see for myself people weighing expensive fruit and pressing the button for the cheapest veggies. Plus NEVER challenged.
Now back in the UK I have seen the same phenomenon – stores in posh areas go self-checkout quickly, whilst poorer areas are slower….but they too get there eventually. I’d love to see relative fraud rates by postcode. Though for reasons given in the article, I doubt the poorer areas will go completely to app-based shopping as the shops know they’d be in trouble. I base my decision on whether to use self-checkout as to whether “shop fraud” would hurt me a lot. All three members of my direct family have been short-changed regularly by using cash at self-checkout tills and you have no recourse! There’s no way I’m gonna go checking credit card/app statements for accuracy.
When you were in Sydney, you probably would have seen the building nicknamed “The Toaster” at Circular Quay-
http://www.visitsydneyaustralia.com.au/circular-quay-toaster.html
You have to have some serious money to live at that exclusive address and I mean serious money. It was reported that in spite of all their wealth, that security guards were finding that the residents were sneaking downstairs to plug in and charge their mobiles at the electrical outlets meant for the cleaner’s vacuum cleaner so it would not go on their electricity bills.
Let’s not forget that physical fiat, aka “cash”, is a means for banks and fiat hoarders to escape negative interest on their fiat. So limits on the amount of cash one may possess are legitimate – unless ways to impose negative interest on cash are used.
But some will say “Banks will simply pass on any negative interest levied on them to their poor depositors.” True, which is one of just many** reasons why all citizens should be allowed FREE* debit/checking accounts of their own at the Central Bank.
So, there’s more than one side to the cash issue and we should be careful not to allow the rich to sanctimoniously hide behind the poor.
*Up to reasonable limits on account size and transactions per month.
** A major reason is that such accounts would constitute an entirely risk-free, always-liquid payment system in addition to the one that must work through private banks – thus potentially freeing the economy from the hostage situation it is currently in vis a vis “the banks.”
Appreciate the article and comments. But what if this technology improves? I read at SCMP that 5G will allow incredible density of connected devices, many tens of millions per square mile, and with microscopic latency. So if you get frustrated when something still doesn’t scan despite all that linky goodness and you walk out with it, what happens? Do your “always on” shoelaces rat on you (giving location,date,time) while simultaneously reporting days until replacement?
>After downloading a bright orange app on their smartphones, shoppers scan their own groceries as they walk around
So if I change my very lightweight, always blowing around in the wind mind about those Pringles Extra Manufactured Goodness 6 pack, I assume I have to fudge with the app to get it taken off again? Jesus.
Of course, I know what the point is. It’s to convince people there is no alternative and to embrace the brave digital future. Which in turn would allow Sainsbury’s to replace paid staff with unpaid customer effort, as well as do deep and thorough data mining of anyone who chooses to use this “service”.
Exactly. I always use the cashier line for this reason, not the self check-out line when shopping. It’s also quicker for me to pay cash.
Jewel Osco has just rolled out a new system where they have taken half of the lanes that normally would have had a cashier and taken them out and put the self service kiosks in. They have had a form of these for a long time and they have rarely worked as planned. And they don’t work now.
Thus goes on the crapification of everything.
Wait until they sell your “lifestyle choices” to insurance companies… junk food, booze, ciggies, colas… it’s all being tracked.
A far cry from the small French market I occasionally visit where I pay only in cash and get recommendations from the cheese fellow and recipes from the charming couple who sell fish and joke with the young fellow selling fruits and veg.
A few self checkout isles have been around for more than a decade in NYC, my LES C-Town supermarket and Home Depot come to mind, my first thought already back then was, first all the good working class jobs disappeared and now all the crap jobs will disappear – and then we’ll all be on the street asking each other to spare a “dime” for a cup of coffee only no one will have a dime.
I wonder – how does capitalism work with no one earning money to spend on purchasing goods that are produced by non paid robots?
That’s when the Few so-empathically eliminate the thenceforth “useless eaters”.
As i have already written here my local Walmart recently went two/thirds self checkout and every machine now has a camera on the viewscreen similar to a computer webcam that photographs you (and shows your picture in a corner of the screen) as you are self scanning. There are also the familar smoked bubble surveillance cameras mounted over every checkout lane, self check and cashier. Meanwhile those Amazon no till stores reportedly have hundreds of cameras all over the store. So this setup–probably meant to intimidate as much as anything else–is Walmart’s response to the shoplifting problem. They have doubtless closely studied the situation and decided that the still inevitable losses through theft are outweighed by the saved labor charges–a cost of doing business.
The problem is that, even with all the surveillance, the algos, the pattern matching, the behavioral analysis this (cobbling together proof of purchases based on anything other than someone physically passing the goods received through a checkout) is, fundamentally, an idea that doesn’t scale.
While the source data to verify a disputed transaction might be there, unpicking it all and presenting it in a linear and coherent version of events is a skilled task and very resource-intensive. No court or other arbitration procedures like a credit card charge-back dispute will settle for a merchant’s report which isn’t anything more than, in essence “the computer sez so”. A real, live employee will need to verify based on robust, reproducible, fairly easy-to-understand evidence what happened, with whom, when. As a UK Supreme Court judge recently opined, it’s no use trying to replace in a court or court-equivalent setting the judgement having seen or heard the evidence of the “man on the Clapham Omnibus” with that of the AI chatbot on the San Francisco streetcar.
Well like I say they may be there only to intimidate (in Walmart’s case). All those cameras may go nowhere.
In Amazon’s case they were also intended to study consumer behavior for some algorithmic purpose I don’t quite remember. It’s hard to take many of Bezos’ ideas seriously. Clearly Walmart is making the bet that self check is the future. It seems highly doubtful that no till is the future.
I knew something was up back when I was a kid decades ago… I was maybe 10, in a new K mart and saw a rather crude and out-of-place mirror high up on the wall. But the wall was a false wall, it separated the bathroom access corridor from the main store and when I looked into the corridor I saw a ladder leading up to an even more crudely cut square in the wall(board), roughly the size of the mirror. Of course I climbed the ladder and yes it was a 2 way mirror, but I remember thinking at the time how weird that no one was manning the spy perch and that bad guys would not be fooled if they didn’t find a way to hide the ladder… then I thought, well if people think they are being watched they probably won’t steal anything. I am actually not surprised that the incident registered on my young “Man from U.N.C.L.E.” inculcated mind but yeah…
camera’s to nowhere…
inflatable tanks…
> A real, live employee will need to verify based on robust, reproducible, fairly easy-to-understand evidence what happened
Ahhh, like they did during the US foreclosure crisis? Because that was a sterling example of moral rectitude! Mortgage servicers stole millions of homes with no paperwork using fraudulent affidavits literally rubber-stamped by company “directors” who were paid $12/hr for the removal of their souls. The courts yawned and approved everything. As the last part of the process, the fully paid-for government effectively retroactively legalized it all with a legal settlement.
Justice wasn’t on the map in that scenario. Why would anyone imagine a different outcome when it comes to steaks rung up the same price as bananas? No, a far more realistic outcome is that stores will implement some shoddy algorithm-trained software to catch the wrong-doers. This software will then robo-sue customers chosen essentially at random for thousands of dollars apiece. And judges will rubber-stamp everything since corporations can do no wrong. IDK, maybe the UK will be different.
Thank you for this reality-based comment.
“like it, proles!”
This is tinfoil hattery. The cases are as far apart as you can get.
For foreclosures, judges had decades of banks foreclosing only on deadbeats, so there was substantial prejudice in favor of the banks. Moreover, arguing that the paperwork was false or bad was accusing the banks (or servicers) of fabrication, something the judges didn’t want to hear or believe. On top of that, finding in favor of the plaintiff meant giving them a free house, something again judges didn’t like to do.
The problem was very rarely was a foreclosure completely groundless (as in foreclosing on someone who had paid off their mortgage). The borrower had at least missed payments and often was substantially in arrears.
With scanning fraud or theft, the store will have to prove that what happened was a crime (intentional) as opposed to an accident by the customer or a defect in the scanner.
Friendly reminder that giant corporations LOVE customers but HATE labor, and have not figured out yet that the venn diagram of those two things should overlap rather than be 2 separate circles of “customer” and “exploitable low-wage labor pool we want to be rid of anyway”.
A pox on all your houses. I will ever use a kiosk while I yet draw breath. Solidarity.
+1
I keep wondering how long it will be before I’m forced to carry a “smart” (i.e spy) phone. I’ve resisted so far, but it looks like the the day is coming… (TINA doncha know).
Great article but I did want to mention this but –
They definitely do have these provisions but I wouldn’t go so far as to say that the credit card companies are on the side of the customer on this – the credit card companies are always on the side of the credit card companies.
Say you make a $100 purchase on a credit card. Your account will be debited $100 and the merchant will be credited $100. Then the merchant will pay a transaction fee of approximately 2.5%. You initiate a chargeback and the reverse happens – $100 to the customer and $100 from the merchant – but where does that 2.5% fee go? I may be way off base here but I’ve been involved in this process for many years and had quite a few disputes with the credit card companies on behalf of the merchants, and I’m pretty sure they simply keep the 2.5% fee when refunding the customer. If they are actually giving it back to the merchants I have been unable prove it by looking at the deliberately byzantine statements the credit card companies put out.
Anyone else know if I’m wrong here?
On a related note, I purchased at device at an Apple store a few years ago and paid cash which nearly made some heads explode. I don’t think anyone had paid cash there in eons and they had to go into the back room to find a key to unlock some hidden drawer in their countertop that had a small amount of cash so they could make change. That really brought a smile to my face watching them scramble to find a sawbuck.
Wont even need an app or a smartphone in the future as the bio metric chip inplanted in you will just be linked to your payment facility….
Once society is cashless the easier it will be to implement. Who would’ve thought you could pay with your phone a few years back.
Coming to a town near you…..
Why would anyone have any qualms about stealing from these corporations? They don’t have any qualms about not employing people or providing good jobs with benefits.
And, they don’t pay me to tot up my purchases and bag them. If they gave 5 per cent off, then the contract changes and so would peoples’ attitudes.
Along a similar meme. When McDonalds first opened in Australia, the company employed a lot of labour, out back cooking and many more out front serving customers. Pretty much the same sort of drive in cafe you see in the movie Founders. Lots of staff.
Two of the biggest differences which made Maccas a success were consistency and speed of service. (And price, but not so much these days I notice.)
All products were under heat lamps and pre cooked and once you’d made your selections, you were pretty much done and sat down or out of there in a minute or so.
The 2019 Maccas hoists its anti labour credentials high. At Mareeba on a public holiday, I waited in line with a number of people for the one terminal operated by a human being. Perhaps 15 minutes before I was served, with those cold robot screens waiting to take my order…
Getting close to a boycott of Maccas – they seem to think their only social responsibility is to serve you food and, preferably, you serve yourself. Gone were the lofty ideals of employing Australians. Aussies don’t want to work there either, so it’s a two for.
Somewhere on this planet, the company is designing a cooking system where you put the raw ingredients in and push a button to get a cheese burger, all wrapped, ready for you to pick up.
Not interested in this kind of shopping at any time. Dont even have a smartphone and I never will.
I was at a BJs the other day with a cousin. As I was in front, she handed me her member card at the self-service checkout. The machine asked me if I was my cousin displaying her name! The system clearly uses facial recognition.
I keep thinking about the the ‘89 Loma Prieta Earthquake, which knockout power for better part of a week for most of Northern California. That was something like fifteen million people then. Even when power was back things were iffy for a bit.
So what happens when the fancy self checkouts, the phone lines, and the internet is gone? Businesses can function without reliable electricity, but that requires cash and human clerks. Heck, you can even muddle through on credit cards with the proper equipment like imprinted, carbon paper, and pens. I am even sure that there are more “modern” ways of doing it.
But hordes of Americans without cash and nearly useless credit cards, and hardly any cashiers…
It wasn’t even that powerful a quake. If a truly big one like the 1906 Earthquake happens… all those coders and wannabe financiers and nobody able to do arithmetic. :-)
I went to that test Sainsbury’s near Farringdon (on the top edge of London City, near Deloitte) the day it opened. It was chosen I believe because it’s across the street from their headquarters, so they can use it as a quick guinea pig for new ideas. Because I was in a rush due to my shortened lunch break, I didn’t read the signs outside and notice until I was inside that it was a new pay by App experience.
Once I was in there, the lunch rush was more chaotic than usual. I counted 8 employees in the crowd trying to explain to people how the app worked and how to use it, along with 2 security guards and a photographer out front to take PR photos of “beautiful people” using the app. (They normally have 2 employees in the shop, and one security guard.)
There was also a long queue filled with grumpy and increasingly impatient shoppers who were waiting to use the hidden till in the corner. I joined that queue after grabbing my sandwich and crisps.
One of the employees every so often went to the queue to ask if they wanted to use the app to pay and save time. It felt like being asked for ransom— “use our app or lose your lunch hour waiting in a queue.” Needless to say, nobody was particularly friendly to him.
Overall, if this is the future of grocery shopping, I would predict it would lead to the end of the large grocery store as we know it, as everyone gives up on these and buys groceries online instead.
Like the sabotage of the early mass manufacturing era, it seems time for another dose. For touch screens with surveillance cameras, carry some press on stickers and slap one on the camera lens. If “self service” doesn’t come with a discount, stand in line for human service and complain to management about the wait and “poor service.” Go onto online rating services and complain again. Make it more expensive to do business this way rather than less. It shouldn’t require wooden shoes jammed into gears, but there are modern equivalents. (I can’t recommend the shoplifting, though, as responding by lowering acceptable behavior standards means “they win.”
Now I’m even happier to have moved to Mexico where it’s primarily a cash economy. I shop using cash. Pay my rent in cash. Recently bought a car with cash. And buy almost everything with cash at mercados around town. Rarely set foot in a store any more, never mind one of the big box variety. This no-till notion will never fly SOTB or in other countries around the planet where much of the population is unbanked.