Monday, May 9, 2016

WSJ: Stores that don't use the chip will eat the fraud

Business owners who haven't started accepting chip cards might want to think about doing so as the bill for fraudulent transactions shifts from the banks to the merchants.  The Wall Street Journal reported today:

For millions of merchants that haven’t yet met the credit-card industry’s deadline for accepting more secure plastic, the bill is coming due.

As of last October, retailers who didn’t make the transition to chip cards are on the hook for counterfeit transactions that used to be covered by card-issuing banks. The costs of the fraud, known in the industry as chargebacks, are starting to stack up.

A few weeks ago, a woman used a counterfeit card to buy $400 worth of gift cards at a Harps grocery store—and then hit nine more stores in quick succession after the first attempt worked, sticking the regional grocer with a tab for $4,000 that previously would have been absorbed by the card-issuing bank.....

Chargebacks among small and medium-size merchants rose 15% in the fourth quarter from a year earlier, according to a recent survey by The Strawhecker Group, a payments consulting firm. The industry believes the volume of chargebacks has likely risen since then, because the fourth quarter included only a few weeks under the new rules and it often takes a while for the costs to flow through to merchants....

Strawhecker, which surveyed 3.5 million small-and-medium-size card-accepting merchants, didn’t put a dollar figure on the chargebacks. Other experts said the total was probably in the tens-of-millions of dollars and will likely continue to rise....

The credit-card industry and retailers battled for a decade over rolling out chip cards, which are more secure but also require new payment terminals and take more time at checkout. The balance tipped against retailers after a spate of cyberattacks hit major chains such as Target Corp. and Home Depot Inc. and compromised millions of cards.

Target, Home Depot and some other large merchants, including Wal-Mart Stores Inc., are now processing chip transactions, but there are still plenty that haven’t installed the new equipment and are for the first time facing sizable costs for counterfeit transactions.

Financial institutions have been issuing the new cards to customers for more than a year, but just 22% of retailers are able to process them, according to a survey released last month by Boston Retail Partners. Another 53% of the merchants in the survey planned to install the systems within the next 12 months.

Some of them didn’t want to install the new equipment before the busy holiday shopping season and have been surprised to discover that there is a long wait to get it certified, according to payments executives and merchants.... Rest of article


Anonymous said...

Recently had my Debit Card number stolen, and several transactions were processed by Wal-Mart in TX. All info points to a breach in Wal-Mart's network, so I only use a chipped Credit Card now. Pay off the balance every month, and less risk of some nincompoop cleaning out my checking account.

Credik or Debra? said...

I have to use the chipped card at Kroger but nobody else has required it yet. I used another card for the first time ever when I ordered football season tickets two months ago. Soon after I made that transaction, six hundred dollars in computer equipment charges wound up being charged to that card.

Anonymous said...

Chip cards almost eliminate the risk of copying card info from in-person transactions. The unfortunate reality remains that most fraud occurs in environments where the card is not physically present and the number is used online. EMV does nothing to combat fraud in those situations.

Anonymous said...

Most businesses I have been to since receiving my chip card are not yet set up to use it.

Anonymous said...

Typically your bank is the one who loses money on refunding fraudulent charges, not the business

Anonymous said...

1:16 Just last week my debit card info was caught by Trustmarks Fraud Dept attempting to be used at a Texas Walmart. FWIW

Sure wish this was a LE priority.......

Kingfish said...

6:45: Actually read the whole post.

Anonymous said...

Who the hell wants to read posts before opining?

Anonymous said...

I've found a few places that utilize the chip reader, but several businesses that have the chip reader don't use it. The clerk says it doesn't work and to just slide the card.

Conservative Rankin Countian said...

A few months ago my credit card was hacked and the card shut down. I call the credit card company and they say somebody tried to charge several hundred dollars worth of merchandise in a big box store in the Midwest USA earlier that morning and the transaction was denied. So I get the info on the store and call the manager. Ask him if he has video at the registers. He does. Call the local police of the city where the fraud occurred and they tell me to file a police report in my hometown. Did that at 3 p.m. the day of the crime and get the Detective in the faraway town on the phone with a case number. They go to the store and view the video. 3 weeks later they call me with an update that the same 2 "democrats" had tried the same trick on 5 other people that same day and they've got the video evidence now trying to identify the perps. I hope I get the chance to take a vacation to the Midwest USA and file charges on these f*cksticks.

Anonymous said...

hmm...Kroger is still taking my chipless card as of last Friday. It'd be sad for me if they really don't now as my cards came out just before the chip machines and don't go out of date for a while yet.
My husband's card has a chip and those machines are SLOW.

Anonymous said...

Surely these technogeek wizbangs will figure out that the simplest way to "control fraud" is to embed the unique identification code directly into the user's body. You know, like a chip in the hand. Or even the forehead. Seems logical and reasonable. My suspicion would be that someone will figure that out. Seems like I've read about that kind of thing somewhere.

Anonymous said...

The chip transactions take so long to process compared to sliding the card. Hope to see that improve.

Anonymous said...

Wonder what this means for merchants who use iPhone Square card readers to scan credit cards (barbershops, nail salons, etc.)?

Anonymous said...

10:19 They'd be SOL. But as someone above stated, virtually ALL fraud event occur while you still have possession of the actual card.

Suscribe to latest on JJ.

Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel


Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS