Loblaw testing grocery receipt scanners. Can customers refuse?

For some Loblaw customers in Ontario, their next grocery run might look and feel a little different.

Canada’s largest grocery company confirmed to Global News on Wednesday that it is testing receipt scanners at four of its stores in Windsor, Woodstock, Oakville and Georgetown as part of a pilot project to stop retail theft after CBC News first reported the news.

“Organized retail crime across the entire industry is a very serious issue, and has only gotten worse. It’s having an impact on prices and safety,” Dave Bauer, a Loblaw spokesperson, said in an emailed statement.

Bauer said the company was “working hard to balance a need for enhanced security while at the same time preserving a welcoming and convenient customer experience.”

But some experts say this could put off customers who may also be wondering if Loblaw has grounds to implement the practice.

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Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said such a measure could deter shoppers.

“I think from a PR perspective, grocers need to be careful with how they deal with loss prevention, essentially because, at some point, you may actually be making many patrons feel guilty for not doing anything really other than shopping in your own store,” he told Global News in an interview Wednesday.

There is also the risk of human error, Charlebois said.

“If for any reason, someone is actually being put aside and checked, that person may actually feel guilty and that person may actually never go back to that same store ever again because of that bad experience.”

Canada’s grocers have been facing increased scrutiny as food inflation at many stores remains in the spotlight, even though it has slowed.

Grocery prices had risen by 3.4 per cent year over year in January but growth had slowed compared with the previous two months (4.7 per cent), according to Statistics Canada.

The Costco membership agreement requires its customers to show their receipt for the items purchased at the warehouse exit.

Costco says this ensures cashiers have processed the items purchased correctly and customers have been properly charged.

“It is also one of our most effective methods of maintaining accuracy in inventory control,” the Costco membership regulations state.

From a legal standpoint, Loblaw may have some bearing here, one expert said, but it all depends on whether there was prior notice given to the customers.

“I assume that a grocery store that imposes this sort of receipt scanner would have spoken to legal counsel, so I would assume that there would be some notice and that the notice would be given to customers early enough that customers can make a choice,” said Alex Colangelo, a professor in the paralegal program at Humber College.

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Colangelo said you don’t necessarily need a written agreement, like Costco has with its members, to implement such a rule. Even a sign would suffice and by entering the store, a customer essentially agrees to that even if it’s not in writing.

“Theoretically it is possible that you could agree through your conduct,” he said.

“So, the question is, have they informed customers? What have they informed of? How explicit was the notice? Did customers have a choice? If the notice isn’t provided to you until you’re stuck, then it’s not really a voluntary choice.”

Loblaw spokesperson Bauer did not mention if customers had been informed about the scanners, but said the grocer welcomes their input.

Ultimately, it is the customer’s choice to give consent or not.

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“If they see a sign and they are not consenting, then the customer has the choice of walking away,” Colangelo said.

“If they don’t have a choice and they find themselves stuck, then a store that doesn’t have the legal authority might have a potential liability.”

Colangelo said he wouldn’t be surprised if this leads to litigation in the courts. He added that there have been past instances where people have sued because loss prevention officers stopped them.

“There have been successful lawsuits where customers were prevented from leaving because they were suspected shoplifters,” he said.

“I think in most cases, even if you have reasonable suspicion, you still don’t have authority.”

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This is not the first time that receipt checks have been conducted at Loblaw-owned stores.

Last summer, Loblaw posted signs at some of its outlets, warning customers to be prepared to show their receipt upon exiting and employees were reported carrying out random checks of shoppers’ receipts.

Charlebois said Loblaw has “really missed the boat” in recent months, referring to corporate bonuses and backtracking on its decision to no longer offer 50 per cent in discounts on nearly expired items.

This latest receipt scan measure is just another example of the grocery giant “not reading the room properly,” he added.

The Retail Council of Canada (RCC), a non-profit that represents the country’s grocers, says incidents of retail theft that involve some form of violence have soared by 300 per cent over the past four years, as reported by retailers across the country.

“Shoplifting has increased across all categories including food, apparel, and footwear merchandise,” RCC said in a Dec. 12, 2023 news release.

Michelle Wasylyshen, RCC’s national spokesperson, told Global News in an emailed statement Wednesday that retail theft costs Canadian retailers billions of dollars a year.

“In addition to being frustrated by financial losses, business owners are concerned for the safety of their customers and employees,” she said.

The latest Statistics Canada data on police-reported crime showed a 31 per cent increase in shoplifting of worth $5,000 or less in 2022 compared with the previous year.

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Loss prevention remains a challenge for grocers.

Dalhousie’s Agri-Food Analytics Lab estimates that the average grocery store loses about $5,000 worth of food products every week.

On top of that, store theft is a problem, but it shouldn’t become “everyone’s problem all at once,” Charlebois said.

He said there are different ways to deal with store theft, such as security guards dressed in civilian clothes surveilling the store, which is becoming more common.

“The Canadian way is basically to be more discreet about it and not put artifacts in stores being aggressive,” he said.

— with files from Global News’ Sean Previl