A checkout system is provided for carrying out a two-factor authentication process where coded products are purchased and theft activity might be pursued. The system typically includes an identification code reader for reading product identification codes (e.g. UPC bar code symbols or EPC-encoded RFID tags) on products that are passed through the point of sale (POS) and a security code detector/reader for automatically detecting/reading a security code (e.g. implemented as an EAS tag or an RFID tag) at the POS. During product checkout operations, the identification code reader reads identification codes, and the security code detector/reader detects or reads security codes applied to products. Collected identification and security data is automatically processed using identification and security data stored in a database to determine whether or not each product being purchased at the POS is in compliance or not in compliance with a two-factor authentication process supported by the checkout system.