California businesses are at risk of taking another financial hit, according to industry experts. This time, it’s because of a proposed bill that’s aimed at eliminating self-checkout. 

The goal of Senate Bill 1446 is to eliminate theft, which has been tied in part to self-checkout stations, but industry experts argue this bill could pile on significant costs for business owners. 

According to a summary of the proposed legislation, if passed, grocery or retail drug establishments would be prohibited from providing a self-service checkout option for customers unless specified conditions are met.

Some of these conditions are that no more than two self-service checkout stations can be monitored by any one employee and the employee has to be relieved of all other duties, 

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NCR Voyix CEO and member of the National Retail Federation board of directors, David Wilkinson, says the bill will not only frustrate customers because it reduces choice, but it will “lead to higher operational costs that will be passed to consumers.” 

NCR Voyix is a leading global provider of digital commerce solutions for the retail, restaurant and digital banking industries.

According to an economic analysis of SB 1446, conducted by Encina Advisors, LLC on behalf of the California Foundation for Commerce and Education, businesses would need approximately 10,200 additional cashiers under the mandate. That would result in at least $497.1 million in additional costs falling upon grocery retailers annually, according to the findings, obtained by Fox Business. 

“While tackling retail theft is crucial, there are unintended consequences,” Wilkinson said. 

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Given that it insists on one employee for every two self-checkout stations, those employees are stuck at the machines instead of helping customers, he added.

He is also “concerned with the undertones of this bill that could potentially ask store associates to act as security guards,” Wilkson said. 

Mature woman scanning groceries at self checkout line in Costco, Palm Beach, Florida. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images) / Getty Images)

Instead, Wilkson said stores need to “embrace tech to help solve the problem.”

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“Fighting theft is a multi-faceted societal issue. It takes partnership with policy makers, businesses, and tech working together to curb crime which will ultimately help businesses,” he said. 

Ryan Young, senior economist at the Competitive Enterprise Institute, told FOX Business, that the best way to tackle the issue is through enforcing shoplifting laws. 

“Self-checkout lanes can save on labor costs, but increased theft is one of the tradeoffs,” Young said. “Companies can decide for themselves whether that tradeoff is worth it. The answer will vary from business to business. They do not need California’s state Senate deciding for them.”

North Miami Beach, Florida, Walmart customer using Self Checkout. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images) (Jeffrey Greenberg/Universal Images Group via Getty Images) / Getty Images)

Steven Greenhut, western region director of R Street Institute, doesn’t believe removing self checkout helps stores prevent theft at all. He argued that the “state and local governments could help by actually prosecuting people who steal stuff, but stores are perfectly capable of reducing their own shrinkage problem.” 

However, a growing number of companies have been removing self-checkout aisles in recent months as a means to thwart theft.  

Earlier this year, Dollar General began employing new measures to crack down on rampant retail theft that it says has been the most problematic problem for the business. Some of its measures included converting 12,000 stores away from self-checkout since the beginning of the fiscal year.

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In March, Target announced that it was limiting self-checkout to 10 items across stores nationwide. 

That same month, Five Below announced it was reducing self-checkout at stores in an effort to prevent theft from cutting further into its bottom line.

The company has “now evolved” to associate-assisted checkout across its over 1,500 locations, CEO Joel Anderson said during the company’s fourth-quarter earnings call.

The California legislature is slated to reconvene on Aug. 5. The last day for each house to pass a bill is Aug. 31. 

Republican Steve Garvey’s fundraising eclipsed that of Representative Adam Schiff in California’s Senate race over the past several months, according to new campaign finance data. Garvey celebrated the fundraising report in a statement to Newsweek.

Schiff, a Democrat, and the former baseball star Garvey are set to face off in November in the Golden State’s election to fill the seat of late Senator Dianne Feinstein. Schiff is viewed as the front-runner in the deeply Democratic state where Republicans have struggled in statewide races. But finance data from April through June shows Schiff’s fundraising lagging behind Garvey’s.

Schiff’s latest fundraising report reveals that he raised about $4.2 million between May and June, while Garvey’s showed that he raised about $5.4 million in the same time period, according to the reports filed with the Federal Election Commission (FEC).

Despite the strong fundraising quarter, it remains to be seen whether Garvey can make the race competitive, as Schiff holds a strong polling lead and has outraised him in previous months.

Schiff still has more cash on hand. According to the filings, he has about $6.4 million on hand compared to Garvey’s 3.3 million.

“Californians are tired of the status quo,” Garvey told Newsweek. “They are tired of the division, they are tired of Washington, D.C., not working together, they are tired of Adam Schiff representing his party bosses rather than them, and now they are speaking up with their checkbooks.

“From day one, voters and donors alike have resonated with my message, that I am running for all of the people with an agenda of building consensus and legislating with common sense and compassion. I appreciate every dollar contributed to our mission of bringing civility and leadership back to Washington, D.C.”

Newsweek also reached out to Schiff’s campaign for comment via email.

On Wednesday, Schiff broke from Biden about whether he should stay in the presidential race.

Biden has faced calls to withdraw from the race after his debate performance against former President Donald Trump last month. He sounded hoarse and appeared to stumble through several answers, doing little to quell concerns about his age.

Schiff joined growing calls for him to exit the race, issuing a statement praising Biden as “one of the most consequential presidents in our nation’s history” but warned that the “nation is at a crossroads,” according to The Los Angeles Times.

“A second Trump presidency will undermine the very foundation of our democracy, and I have serious concerns about whether the President can defeat Donald Trump in November,” Schiff said.

The latest polling of the race shows that Schiff remains the favorite.

The Public Policy Institute of California surveyed 1,098 likely voters from May 23 to June 2 about who they plan to support in November. In that poll, 62 percent of respondents said they plan to back Schiff, compared to 37 percent who plan to vote for Garvey, giving Schiff a 25-point advantage.

Republicans were able to compete in some statewide elections in California throughout the 2000s, but it has become increasingly Democratic in recent years as the party strengthens its margins in suburban areas. Bien won the state by more than 29 points in 2020, and the state is not viewed as competitive in this year’s presidential race.