ClownLoach wrote: ↑October 15th, 2023, 12:36 am
Yes technically the store is off the hook for the charge, but they will have to fight off the entire chargeback. That costs money. The burden is on the retailer to do the research and present the proof to fight it off (which is usually done at the corporate office, although some companies are using overseas services in the Philippines or India now). And if there are procedure violations found then it does hit the store. The top fraud these days is manual entry of fake cards, and self checkouts make this super easy. Manual entry of a fake/stolen card is 100% charged back to the store, usually the thieves use social engineering to get the cashier to do an override to okay manual entry which still won't hold up to the chargeback. "OH my chip got damaged at the gas station and Chase is sending me a new card next week, I gotta get these groceries though so the bank told me to tell everyone to manually enter." You would be alarmed how many inexperienced cashiers fall for this crap, especially when the customer doesn't 'look the type' and is well dressed and professional.
If it's a major transaction it is scrutinized more, the loss prevention department may have to pull the video. Sometimes the customer has called law enforcement and they decide to intervene at the store level even though it's not really their jurisdiction - sometimes they're hoping to find information related to other cases and such. That's a PITA for the retailer, costly and time consuming for the Manager to be stuck dealing with the PD for hours. And sometimes the customer makes a fool of themselves too demanding to see video (as if they're going to hunt down the thief vigilante style?) and raises hell all the way to the CEO office. Finally, the credit card companies DO have the right to restrict or even pull credit card acceptance if a location has too much fraud. That happened at Circuit City a few times when I worked there; a location would literally be told by Visa or Mastercard or Amex they were "suspended" or even lose the merchant account for too many chargebacks. I was in a Best Buy a few years ago that had mysterious homemade signs saying "Amex Not Available Please Use Other Cards" and I suspect they had the same problem.
The credit card fraud is absolutely costly to the retailer not just in merchant fees but also the administrative costs. They definitely have to attempt to control credit card fraud.
The store won't even hear about the chargeback if it is a properly authorized Chip transaction though. That is one of the new things in the past few years when they finally got rid of signatures. There is no more chargeback retrieval in the event of a stolen card used if the Chip is read as there is nothing for the store to produce (since there is no signature slip, and the card processing network already knows the card was present/chip was read). The chargeback process got a lot easier for retailers after they officially quit requiring signatures. I think this may have actually been another of the reasons for the widespread adoption of self checkout by various retailers who previously didn't have it, and more comfort at allowing them for large transactions.
At this point in my opinion manual entry of credit cards should not be allowed by a front line cashier or even supervisor. I believe many POS systems have been hard coded to prohibit this practice at this point. Also even if the POS system allows it, hopefully the authorization network will decline the charge.
Some card networks have also stopped approving swipe based transactions if the card is a Chip card. There is a process called Fallback where if a Chip fails in a reader 3 times the reader will allow the card to be swiped and send the message to the authorization center for card entry method "fallback-swiped." For a while I had a card with a non-working Chip and was doing a lot of fallbacks. Eventually the card started declining and I called the issuer and they said they wanted to verify my recent transactions and then said this card was disabled and they would be sending me a replacement card. A couple years later I got another card that the Chip quit working, this was a different issuer, it was declining, so I called them, and I was told that card network had quit allowing Fallback so they had to send me a new card and if I couldn't get the tap to work I couldn't use that card at all until the replacement came.
There are a couple stores I go to where I notice the pinpad has a little button on the front of the screen that says "manual." If you press that button it actually lets you type your card number into the pinpad. I haven't actually tried this to see what happens. I cannot imagine it would just go through without cashier intervention... but many stores do not want the cashier to handle the card because they don't want someone to accuse their cashier of handling the card then stealing the card information.
I have dealt with locations that got flagged and put under those special programs for having too much fraud. Those locations get put onto special programs by the card networks. In the old days it meant getting a lot more "call for authorization" prompts when trying to run cards. It also results in a higher processing fee. Card skimming was often the big reason why these locations were having major frauds that landed them in these programs (cloned cards used). In that case you can check ID all day but the name on the card will always match the name on the ID as the crook comes prepared, but the card number on the card won't match the card number on the invoice. A simple prompt on the POS "enter the last 4 digits of the card number" would alleviate that issue after the swipe but very few retailers did that (Lowes chainwide, Target and Office Depot over $200 for a while, and Macys in CA only did- Macys in other states did not). Back in 2007-2008 Loves put that prompt on its gas pumps - "enter the last 4 digits of card" - of course everyone thought it was a zip code prompt, so there was a lot of confusion. The Chip cards have alleviated that issue with card skimming, at least for now. This is also why so many gas retailers have dropped the zip code prompt IF a Chip card is used (it'll still show up for a swiped card... if the pump will even allow a swiped card). That prompt was there just as much to prevent skimming as it was stolen cards.
Also the initial self checkouts did prompt cashier intervention for credit cards. The initial Kroger self checkouts printed a signature slip up at the attendant station and the receipt there, so after you paid, you didn't get a receipt, you got told to "take your card to the attendant for signature slip and receipt" then eventually that only happened over $25 then only over $50 then they switched to sign on screen. The initial Kmart self checkouts had you sign a screen but then the machine needed employee approval for signature verification (this process continued in Canada for many years). The initial Wal Mart self checkouts and also Albertsons self checkouts locked up at $100 on a credit card and gave a prompt for the employee to check ID before the authorization was even allowed to go through (until NCR was advised that prompt was against the card network rules- then that prompt went away; Albertsons switched to a zip code verification where they could (couldn't in CA), and Wal Mart swtiched to a signature verification random through some analysis they came up with.
One of the few things that locks up some self checkouts today is gift cards. Most grocery stores with NCR self checkout software prohibit gift card purchases. Safeway self checkout prompts for employee approval on gift card sales and many stores decline to process them on self checkout. Kroger self checkout will process gift cards up to a certain dollar amount which varies by location and may be as low as $50 or as high as $500 without employee intervention IF a chip card is used. Ralphs has signs all over that say no gift cards at self checkout but I've run $25 and $50 through numerous times without employee intervention and paying by credit card. Once got to $75 and it locked up, entire transaction was voided, cards cut up, and was told to go get new cards and see a regular cashier. Counterfeit cash payments are just as big of a concern as stolen credit cards when it comes to gift cards. I think they should have to call for authorization on gift card transactions over around $100. Blackhawk's best practices suggest the store require ID for any large gift card purchase (whether it is cash or credit card) but crooks often come prepared with fake ID.