Target Self Checkout: Now 10 items or less

[BillyGr]

The F&E stores in that area had a combo of long belted self checkouts and regular self checkouts. Customers with larger orders were directed to the belted checkouts. The front was attended by minimum 1 clerk. Many times there were several clerks for busy times and for bagging. Some stores had to add belted checkouts because of high volume and large average purchases. If a customer started a large order on the small self checkouts the order was cancelled and moved to the belted checkout where a clerk would scan the items and bag the order (for the inconvenience). So added customer service was rendered to comply with the rule.

I see what you are saying so you put the item limit in place on the small self checkouts and kept staffing focused on the large self checkouts. This makes complete sense. This is how the units should have been designed in the first place, and corporate signage should have been posted to that effect chainwide. The small self checkouts were in effect the "express lanes" and the belted self checkouts were the regular lanes. I always thought it was best when F&E had at least 3 employees up front. This way one employee could be completely involved with a cart, then if a second cart came up, that second employee could get involved with that cart. Then a third employee to watch the smaller units. But I understand how the staffing model didn't make it easy for that to happen in the majority of the stores. They always did call it "assisted" checkout as opposed to "self checkout."

So, just to be the devil's advocate, what is worse?

1. Waiting in an express lane behind a really slow checker

2. Waiting in que at the self check outs with multiple incompetent people taking their time scanning and bagging (and sometimes BIG orders)

Seems like both are equally bad, and easily solved by doing what you stated, having some self-checkouts for small orders and others for large orders.

No reason Target couldn't do the same - they usually have 4 or 6 split into two "sides" facing each other, so just make one side "Express Self-Check" and the other side "Regular Self-Check", no matter how the registers are configured (they don't have belts but can still work for this), but instead they want to go overboard with the size limits that make no sense to the customers who are not trying to break any laws

[veteran+]

That's a stretch, a big stretch.

My stores were the highest volume F&Es and the best reviewed so I guess the customers did not see it that way.



BTW, I never said "due to theft". My shrink numbers were below company average due excellent customer service. The main reason was for faster and more efficient flow up front. It removed the clogging up of the typical small F&E front ends. The bonus from this was reduced shrink which prompted a visit from corporate as to how we did it.



P.S. Why are you yelling again?

In your first reply, you said you implemented this and "shrink shrank" - that is another way of saying that it was done due to theft (since you mentioned none of the reasons you gave in this last reply back then, only adding them now, the only thing originally mentioned had to do with theft).

Even the best stores have shrink.

I did not implement that DUE to shrink. I apologize if you understood that to be the case. The bonus was, shrink shrank.

[ClownLoach]

I did not say Grocery Outlet had self checkouts . I just don't care for the company. Just as you explained, I am that customer that if you burn me a couple of times I am never coming back. PLUS, I had to work to spend money in that store? Not going to do that again.

The F&E stores in that area had a combo of long belted self checkouts and regular self checkouts. Customers with larger orders were directed to the belted checkouts. The front was attended by minimum 1 clerk. Many times there were several clerks for busy times and for bagging. Some stores had to add belted checkouts because of high volume and large average purchases. If a customer started a large order on the small self checkouts the order was cancelled and moved to the belted checkout where a clerk would scan the items and bag the order (for the inconvenience). So added customer service was rendered to comply with the rule.

I used to feel the way you do about Grocery Outlet but some better operated stores, policy changes (no more expired items allowed- per corporate), and ongoing mix improvements made me come around. I would also propose to you the operator who burned you with expired product/other dissatisfactory experience is no longer an operator but I suppose you could check into that. I had one unit who hassled me over walking in with a bag from a neighboring store and was about two steps from trying to accuse me of something (bag was from Harbor Freight-nothing Grocery Outlet even sells) and I boycotted that store because despite the operator seeming very responsive to my complaint when I spoke to her, I went back and watched the same employees who hassled me hassle another customer under the same situation as me and I literally walked out right when I saw that happen. Since then the store has changed operators twice, that particular store still sucks, but I no longer boycott it since those employees are gone also. I really would encourage if you have the chance to go to some of the better operated Grocery Outlet units and give the chain a re-evaluation, talk to some of the operators, and observe how well many (not all) of the stores are being run. In my market I have 2 what I consider to be excellent five star stores (Sparks-Disc, Reno-Lemmon), 2 poor stores (Fernley, Reno-Kietzke), 1 very good store (Dayton), 2 acceptable stores (Sparks-Oddie, Gardnerville), and 1 well stocked/nice but very borderline due to service issues store (Carson City).

I see what you are saying so you put the item limit in place on the small self checkouts and kept staffing focused on the large self checkouts. This makes complete sense. This is how the units should have been designed in the first place, and corporate signage should have been posted to that effect chainwide. The small self checkouts were in effect the "express lanes" and the belted self checkouts were the regular lanes. I always thought it was best when F&E had at least 3 employees up front. This way one employee could be completely involved with a cart, then if a second cart came up, that second employee could get involved with that cart. Then a third employee to watch the smaller units. But I understand how the staffing model didn't make it easy for that to happen in the majority of the stores. They always did call it "assisted" checkout as opposed to "self checkout."

I am going to be curious to see if these retailers making some of these changes see any measurable shrink improvements- Wal Mart in Albuquerque removed/is removing self checkout from 3 stores 100%. This Target 10 item limit thing. We will see how this goes.

Meanwhile it is my view at this point the consumer basically demands self checkout. Personally I almost dread going to a store without self checkout (such as... Walgreens) as I don't enjoy waiting in a slow line with a super slow cashier who is trying to work a super slow point of sale system on a poorly designed checkout counter. But if I go to a store like Trader Joe's or Grocery Outlet with a properly staffed/efficient front end often with cashier and bagger I don't mind at all, in fact, I often think I get through their front end faster than I would a store with self checkout.

So, just to be the devil's advocate, what is worse?

1. Waiting in an express lane behind a really slow checker

2. Waiting in que at the self check outs with multiple incompetent people taking their time scanning and bagging (and sometimes BIG orders)

I would not be the least bit surprised if they did some video research and found that the more items the customer attempts to self scan, the more likely they "miss" something either accidentally or intentionally. The more items, the easier to bury expensive pieces that were intentionally not scanned. Especially with the damned reusable bags, they can leave the expensive stuff in the bags in the cart and scan the cheap stuff, toss what was purchased on top of what wasn't. The other thing is that stolen credit cards are more likely to be used on self checkouts where nobody is going to check ID or question the transaction, so they can rack up massive fraudulent charges worry free (and probably while wearing a face mask so the extra cameras don't catch anything).

By reducing the number of items to 10 or less you reduce likelihood of errors and discourage this type of behavior, plus you restore self checkout to what it should be in a well run retailer - an express lane. It makes sense as long as the regular registers are also adequately staffed and cashiers are trained appropriately. I do like the idea of no carts at self-checkout too. I've noticed that some CVS stores have completely eliminated shopping carts to stop "run-out" theft, and probably the fact that the cart makes it easy to conceal goods that they are pretending to ring up/pay for.

Reality is that we finally have the technology for those sci-fi type videos from the 90s where they push the shopping cart through some magical tunnel and everything is totaled up in two seconds. Uniquo is already using it, their self checkouts are pretty much required unless you are paying cash but all the person has to do is physically drop all the merchandise into a bin and the RFID tags are all read instantly so the entire transaction is totalled on screen in half a second. These stores would be best served by accelerating their RFID transitions and purchasing these registers; if a low margin budget clothing chain can afford them so can Walmart and Target.

[storewanderer]

I would not be the least bit surprised if they did some video research and found that the more items the customer attempts to self scan, the more likely they "miss" something either accidentally or intentionally. The more items, the easier to bury expensive pieces that were intentionally not scanned. Especially with the damned reusable bags, they can leave the expensive stuff in the bags in the cart and scan the cheap stuff, toss what was purchased on top of what wasn't. The other thing is that stolen credit cards are more likely to be used on self checkouts where nobody is going to check ID or question the transaction, so they can rack up massive fraudulent charges worry free (and probably while wearing a face mask so the extra cameras don't catch anything).

By reducing the number of items to 10 or less you reduce likelihood of errors and discourage this type of behavior, plus you restore self checkout to what it should be in a well run retailer - an express lane. It makes sense as long as the regular registers are also adequately staffed and cashiers are trained appropriately. I do like the idea of no carts at self-checkout too. I've noticed that some CVS stores have completely eliminated shopping carts to stop "run-out" theft, and probably the fact that the cart makes it easy to conceal goods that they are pretending to ring up/pay for.

Reality is that we finally have the technology for those sci-fi type videos from the 90s where they push the shopping cart through some magical tunnel and everything is totaled up in two seconds. Uniquo is already using it, their self checkouts are pretty much required unless you are paying cash but all the person has to do is physically drop all the merchandise into a bin and the RFID tags are all read instantly so the entire transaction is totalled on screen in half a second. These stores would be best served by accelerating their RFID transitions and purchasing these registers; if a low margin budget clothing chain can afford them so can Walmart and Target.

Like anything there is always an error rate. Whether intentional or unintentional, in watching self checkouts, I see a lot of skipped items. By the same token I also see some people double scan by mistake and not notice. The intentional theft is obviously going to cost the store way more than whatever gain it gets from mistaken double scans. It is a lot easier for someone to "skip" scanning something in a 30 item transaction, than in a 10 item transaction.

The store is paid for the credit card transaction as long as the card is properly authorized/Chip read. Stolen credit card use being paid to the store is baked into those high merchant fees the retailers hate so much. If the card is swiped then the store could be charged back for fraud. Many of these systems are programmed to decline swipe charges entirely or require cashier intervention for swipe attempts if the amounts go over a certain amount. The card authorization networks flag a lot of fraudulent transactions and don't even let them go through but I am surprised at some that they let go through and I think they could do better at flagging/stopping large transactions without further review. This was a lot bigger deal in the old days of swipe/signature, stores were frequently getting charged back for arbitrary reasons (some stores were stupid and didn't send a copy of a signature slip and got charged back) but now that we are on this Chip processing/no more signature slips/automatic payment to the merchant as long as Chip is read much of the time now the merchant doesn't even know about a stolen card used unless a police report is filed and the store is asked to provide surveillance footage of the incident.

Also just yesterday on a local news was video of a couple of different people using stolen credit cards at one of the grocery chains with giant cartfulls of items; they had broken into houses, stolen people's credit cards, then gone to the store to use them. They had a mask on in the store but not at the houses. Their image breaking into the houses was shown too. So using the stolen credit card isn't such a great idea because it gets you on video in the store and the date/timestamp can then be correlated with other crimes (such as house break in near the store). These folks who just go do a run out of merchandise without trying to pay at all (often undetected by store staff) have it much better since there is not an actual activity occurring that triggers the point of sale system to flag a transaction due to stolen credit card use. Sure the security alarm goes off at the door and that is supposed to trigger something but those stupid alarms are going off all day. They go off when I exit or enter a store multiple times each week.

Macys has a lot of RFID on merchandise yet still has a lot of theft (I witness theft at the local store at least a couple times a year, and I don't go there often).

[ClownLoach]

I would not be the least bit surprised if they did some video research and found that the more items the customer attempts to self scan, the more likely they "miss" something either accidentally or intentionally. The more items, the easier to bury expensive pieces that were intentionally not scanned. Especially with the damned reusable bags, they can leave the expensive stuff in the bags in the cart and scan the cheap stuff, toss what was purchased on top of what wasn't. The other thing is that stolen credit cards are more likely to be used on self checkouts where nobody is going to check ID or question the transaction, so they can rack up massive fraudulent charges worry free (and probably while wearing a face mask so the extra cameras don't catch anything).

By reducing the number of items to 10 or less you reduce likelihood of errors and discourage this type of behavior, plus you restore self checkout to what it should be in a well run retailer - an express lane. It makes sense as long as the regular registers are also adequately staffed and cashiers are trained appropriately. I do like the idea of no carts at self-checkout too. I've noticed that some CVS stores have completely eliminated shopping carts to stop "run-out" theft, and probably the fact that the cart makes it easy to conceal goods that they are pretending to ring up/pay for.

Reality is that we finally have the technology for those sci-fi type videos from the 90s where they push the shopping cart through some magical tunnel and everything is totaled up in two seconds. Uniquo is already using it, their self checkouts are pretty much required unless you are paying cash but all the person has to do is physically drop all the merchandise into a bin and the RFID tags are all read instantly so the entire transaction is totalled on screen in half a second. These stores would be best served by accelerating their RFID transitions and purchasing these registers; if a low margin budget clothing chain can afford them so can Walmart and Target.

Like anything there is always an error rate. Whether intentional or unintentional, in watching self checkouts, I see a lot of skipped items. By the same token I also see some people double scan by mistake and not notice. The intentional theft is obviously going to cost the store way more than whatever gain it gets from mistaken double scans. It is a lot easier for someone to "skip" scanning something in a 30 item transaction, than in a 10 item transaction.

The store is paid for the credit card transaction as long as the card is properly authorized/Chip read. Stolen credit card use being paid to the store is baked into those high merchant fees the retailers hate so much. If the card is swiped then the store could be charged back for fraud. Many of these systems are programmed to decline swipe charges entirely or require cashier intervention for swipe attempts if the amounts go over a certain amount. The card authorization networks flag a lot of fraudulent transactions and don't even let them go through but I am surprised at some that they let go through and I think they could do better at flagging/stopping large transactions without further review. This was a lot bigger deal in the old days of swipe/signature, stores were frequently getting charged back for arbitrary reasons (some stores were stupid and didn't send a copy of a signature slip and got charged back) but now that we are on this Chip processing/no more signature slips/automatic payment to the merchant as long as Chip is read much of the time now the merchant doesn't even know about a stolen card used unless a police report is filed and the store is asked to provide surveillance footage of the incident.

Also just yesterday on a local news was video of a couple of different people using stolen credit cards at one of the grocery chains with giant cartfulls of items; they had broken into houses, stolen people's credit cards, then gone to the store to use them. They had a mask on in the store but not at the houses. Their image breaking into the houses was shown too. So using the stolen credit card isn't such a great idea because it gets you on video in the store and the date/timestamp can then be correlated with other crimes (such as house break in near the store). These folks who just go do a run out of merchandise without trying to pay at all (often undetected by store staff) have it much better since there is not an actual activity occurring that triggers the point of sale system to flag a transaction due to stolen credit card use. Sure the security alarm goes off at the door and that is supposed to trigger something but those stupid alarms are going off all day. They go off when I exit or enter a store multiple times each week.

Macys has a lot of RFID on merchandise yet still has a lot of theft (I witness theft at the local store at least a couple times a year, and I don't go there often).

RFID has nothing to do with theft prevention yet. Right now most retailers use it for inventory maintenance, especially in apparel where they can "wave" a scanner over a rack and it cycle counts every item in seconds. Target has been doing this almost a decade now, and they have also moved to a full store RFID system in Las Vegas (and mysteriously Garden Grove by Disneyland, haven't seen this elsewhere) which supposedly does give them the dubious ability to calculate theft in near real time.

But the greatness is when it's used for checkout. In this example they throw in one item at a time, but you could drop an entire basket in there and it would still total in a second. This is what self checkout needs to be in order for it to work.

https://www.google.com/url?sa=t&source= ... RW4m6GCFbR

[ClownLoach]

I would not be the least bit surprised if they did some video research and found that the more items the customer attempts to self scan, the more likely they "miss" something either accidentally or intentionally. The more items, the easier to bury expensive pieces that were intentionally not scanned. Especially with the damned reusable bags, they can leave the expensive stuff in the bags in the cart and scan the cheap stuff, toss what was purchased on top of what wasn't. The other thing is that stolen credit cards are more likely to be used on self checkouts where nobody is going to check ID or question the transaction, so they can rack up massive fraudulent charges worry free (and probably while wearing a face mask so the extra cameras don't catch anything).

By reducing the number of items to 10 or less you reduce likelihood of errors and discourage this type of behavior, plus you restore self checkout to what it should be in a well run retailer - an express lane. It makes sense as long as the regular registers are also adequately staffed and cashiers are trained appropriately. I do like the idea of no carts at self-checkout too. I've noticed that some CVS stores have completely eliminated shopping carts to stop "run-out" theft, and probably the fact that the cart makes it easy to conceal goods that they are pretending to ring up/pay for.

Reality is that we finally have the technology for those sci-fi type videos from the 90s where they push the shopping cart through some magical tunnel and everything is totaled up in two seconds. Uniquo is already using it, their self checkouts are pretty much required unless you are paying cash but all the person has to do is physically drop all the merchandise into a bin and the RFID tags are all read instantly so the entire transaction is totalled on screen in half a second. These stores would be best served by accelerating their RFID transitions and purchasing these registers; if a low margin budget clothing chain can afford them so can Walmart and Target.

Like anything there is always an error rate. Whether intentional or unintentional, in watching self checkouts, I see a lot of skipped items. By the same token I also see some people double scan by mistake and not notice. The intentional theft is obviously going to cost the store way more than whatever gain it gets from mistaken double scans. It is a lot easier for someone to "skip" scanning something in a 30 item transaction, than in a 10 item transaction.

The store is paid for the credit card transaction as long as the card is properly authorized/Chip read. Stolen credit card use being paid to the store is baked into those high merchant fees the retailers hate so much. If the card is swiped then the store could be charged back for fraud. Many of these systems are programmed to decline swipe charges entirely or require cashier intervention for swipe attempts if the amounts go over a certain amount. The card authorization networks flag a lot of fraudulent transactions and don't even let them go through but I am surprised at some that they let go through and I think they could do better at flagging/stopping large transactions without further review. This was a lot bigger deal in the old days of swipe/signature, stores were frequently getting charged back for arbitrary reasons (some stores were stupid and didn't send a copy of a signature slip and got charged back) but now that we are on this Chip processing/no more signature slips/automatic payment to the merchant as long as Chip is read much of the time now the merchant doesn't even know about a stolen card used unless a police report is filed and the store is asked to provide surveillance footage of the incident.

Also just yesterday on a local news was video of a couple of different people using stolen credit cards at one of the grocery chains with giant cartfulls of items; they had broken into houses, stolen people's credit cards, then gone to the store to use them. They had a mask on in the store but not at the houses. Their image breaking into the houses was shown too. So using the stolen credit card isn't such a great idea because it gets you on video in the store and the date/timestamp can then be correlated with other crimes (such as house break in near the store). These folks who just go do a run out of merchandise without trying to pay at all (often undetected by store staff) have it much better since there is not an actual activity occurring that triggers the point of sale system to flag a transaction due to stolen credit card use. Sure the security alarm goes off at the door and that is supposed to trigger something but those stupid alarms are going off all day. They go off when I exit or enter a store multiple times each week.

Macys has a lot of RFID on merchandise yet still has a lot of theft (I witness theft at the local store at least a couple times a year, and I don't go there often).

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.

[storewanderer]

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.

[ClownLoach]

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.

Even with the chip used properly for fraudulent transactions and no more signatures some credit card processors still do send requests to the stores for information depending on the amount and the "tier" of the store's current charge back level. Most are handled by the corporate offices transparently from the store itself, and again many retailers are using a 3rd party offshore service from Accenture or other managed IT partners. But there still is paperwork depending on your credit card processing bank. I'm not sure which one is truly paperless but it wasn't whoever we were using at my last hedge fund owned cheapskate multi-billion dollar employer.

The Blackhawk gift cards are a massive source of fraud, but somehow there's enough money in play that it's usually still slightly profitable for the retailers. The banks are losing incredible amounts of money on these things. The problem is that the cards are universal currently, meaning that lets say the Gift Card Mall is at a Safeway and they're super vigilant about checking ID and stopping fraudulent sales plus they programmed their self checkout to not accept it. No big deal at all for the fraudsters if they know a place to go. They pocket all the unsold Apple iTunes cards or Home Depot or whatever other cards and take them to a different retailer like say Target who isn't supervising the self checkout well or has ambivalent employees who just approve overrides for a manually entered card blindly. I've seen these people hit a store for $20,000+ in a single day with a single cashier who didn't know or didn't care. The entire $20K is coming back to the store as bad debt in that case. I had enough of this issue in my stores (they would try to hit us specifically for the Visa and Amex gift cards) so I tried pulling them off the floor and keeping them behind the counter. That was how I learned these guys pocket them from other stores and bring them in, which led me to just saying $100 or more a Manager has to be involved. They also try playing other short change scams and I'm not even going to get into the rest but if I were the banks I would start saying that if you sell these Blackhawk cards then you're on your own for 100% of chargebacks and fraud going forward.

[storewanderer]

Even with the chip used properly for fraudulent transactions and no more signatures some credit card processors still do send requests to the stores for information depending on the amount and the "tier" of the store's current charge back level. Most are handled by the corporate offices transparently from the store itself, and again many retailers are using a 3rd party offshore service from Accenture or other managed IT partners. But there still is paperwork depending on your credit card processing bank. I'm not sure which one is truly paperless but it wasn't whoever we were using at my last hedge fund owned cheapskate multi-billion dollar employer.

The Blackhawk gift cards are a massive source of fraud, but somehow there's enough money in play that it's usually still slightly profitable for the retailers. The banks are losing incredible amounts of money on these things. The problem is that the cards are universal currently, meaning that lets say the Gift Card Mall is at a Safeway and they're super vigilant about checking ID and stopping fraudulent sales plus they programmed their self checkout to not accept it. No big deal at all for the fraudsters if they know a place to go. They pocket all the unsold Apple iTunes cards or Home Depot or whatever other cards and take them to a different retailer like say Target who isn't supervising the self checkout well or has ambivalent employees who just approve overrides for a manually entered card blindly. I've seen these people hit a store for $20,000+ in a single day with a single cashier who didn't know or didn't care. The entire $20K is coming back to the store as bad debt in that case. I had enough of this issue in my stores (they would try to hit us specifically for the Visa and Amex gift cards) so I tried pulling them off the floor and keeping them behind the counter. That was how I learned these guys pocket them from other stores and bring them in, which led me to just saying $100 or more a Manager has to be involved. They also try playing other short change scams and I'm not even going to get into the rest but if I were the banks I would start saying that if you sell these Blackhawk cards then you're on your own for 100% of chargebacks and fraud going forward.

I've bought a lot of gift cards over the years at Safeway using a credit card and ONE time was asked for ID (at a Vons somewhere, on $250+). Kroger used to have a thing with Swipe-based credit cards where the system prompted for ID if a credit card was used for any gift card(s) totaling $100 of more and the employee was prompted to enter the DL number into the register (it came up on the register the same way a paper check tender ID entry prompt would come up) and they could press "clear, override, enter" and bypass the prompt and the card would just process through. Once they moved to Chip processing that stopped. However over $500 has to be sold at customer service now, it is hard coded cannot be sold at a regular register.

Also on the drugstores, CVS requires ID to be scanned for any gift card(s) over $200. The transaction cannot proceed without it. Walgreens also prompts for manager approval if gift card(s) over a certain amount are sold. In both of these cases payment method does not matter. I also had an interesting incident once with Rite Aid (they use some other provider than Blackhawk). They had a promotion spend $50 on some company gift cards get $10 Plenti points (at the time). So they rang up 5 $10 gift cards and then I paid and it approved my credit card for $50 then the system activates the cards one by one. It activated the first four cards, then the fifth it declined activation, popped open the cash drawer, and instructed them to issue me a refund of $10 cash. I took the cash, got another gift card, tried to pay again using my credit card- same thing- credit card approved for $10 then declined activation of gift card. Was given another $10 of cash. At that point I got another gift card, paid for it with one of the $10, and it activated just fine and then I got my $10 of Plenti points.

So there are various limits, velocity checks, and other mechanisms on these gift cards that the companies seem to think is preventing fraud. I still don't buy it, I hear so many stories from people in the stores who deal with stolen credit cards, bad checks, and counterfeit money on gift card transactions.

A number of retailers will not accept credit cards for the open balance Visa/MasterCards anymore. They will accept them for the set denomination ones (which seem to stop at $100 or $200 now) but for those "0 to 500" ones it is cash/debit only. I think the better strategy with gift cards for a retailer is to sell only small denomination gift cards. $25 cards, $50 cards, etc. Then you put purchase limits in place (or let the card provider do velocity limits as I experienced with Rite Aid above).

The other problem with the Visa/Mastercard ones is criminal rings go and tamper with the cards so they get drained almost immediately upon activation before the legitimate purchaser can use them. This is why it is vital if you purchase one to keep the entire card package/receipt until the entire balance is depleted. I have seen many stores move those behind the counter due to this issue but then as you point out people can go get them from other stores. One store I know of put some loss prevention stickers on their cards (those "this item purchased at .... if found at other retailers call 1-800-...") but between self checkout and indifferent cashiers that didn't work so their next solution was they were keeping those Visa/MC behind customer service to alleviate that tampering risk. THEN they got in trouble with a merchandiser who came in and inspected the gift card endcaps (they have 2 endcaps) and were required to put the cards all out again.

Back in OK the Homeland chain has the entire Blackhawk gift card unit behind customer service. Card purchases can be made only at customer service. This is policy at every location. I don't know how they get away with that. They probably told Blackhawk either you let us do this or we drop your program.

[ClownLoach]

Now today CNN is reporting on the matter, which refers to it as a test and not a rollout but includes statistics, 6% of transactions move back to full service registers.

https://amp.cnn.com/cnn/2023/11/18/busi ... index.html