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Credit by Hayley Peterson

Walmart is using computer vision technology to monitor checkouts and deter potential theft in more than 1,000 stores, the company confirmed to Business Insider.

The surveillance program, which Walmart refers to internally as Missed Scan Detection, uses cameras to help identify checkout scanning errors and failures.

The cameras track and analyze activities at both self-checkout registers and those manned by Walmart cashiers. When a potential issue arises, such as an item moving past a checkout scanner without getting scanned, the technology notifies checkout attendants so they can intervene.

The program is designed to reduce shrinkage, which is the term retailers use to define losses due to theft, scanning errors, fraud, and other causes.

US retailers lost an estimated 1.33% of revenues to shrinkage in 2017, totalling an estimated $47 billion, according to the National Retail Federation. If Walmart's shrink rates match the industry average, the company's US business would have lost more than $4 billion last year to theft and other related losses.

"Walmart is making a true investment to ensure the safety of our customers and associates," Walmart spokeswoman LeMia Jenkins said. "Over the last three years, the company has invested over half a billion dollars in an effort to prevent, reduce and deter crime in our stores and parking lots. We are continuously investing in people, programs and technology to keep our stores and communities safe."

Walmart began rolling out Missed Scan Detection technology to stores two years ago, and it appears to be working successfully so far. Shrink rates have declined at stores where it's deployed, Jenkins said.

Ireland-based Everseen is one of several companies supplying Walmart with the technology for the program.

"Everseen overcomes human limitations. By using state of the art artificial intelligence, computer vision systems, and big data, we can detect abnormal activity and other threats," an Everseen video advertises. "Our digital eye has perfect vision and it never needs a coffee break or a day off."

Everseen CEO Alan O'Herlihy said the company's technology is designed to reduce friction at checkouts and "digitize" checkout surveillance. Everseen works with 10 of the top retailers globally in terms of revenue, he said. He declined to identify clients by name, citing confidentiality agreements.

He said most of the checkout-related issues that Everseen's technology catches are accidental.

"People make mistakes," O'Herlihy said in a phone interview. "In terms of shrinkage, or loss, that's the main source."

Customers might forget items in the bottom of their carts. Cashiers could accidentally fail to scan an item if they are tired or distracted.

One of the most commonly mis-scanned items is milk, he said.

"People find it hard to scan milk," O'Herlihy said. "Sometimes they get frustrated and they just don't scan it."

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