Previous violator stops accepting cards

[jw1980]

I went to a small, independent computer store today. I had previously reported the location twice for requiring ID on all credit and debit card purchases. This merchant even had the nerve to install an incriminating sign blatantly proclaiming their intent to violate.

 

Well, that sign has now been replaced by a sign indicating that only cash and checks are valid, and that no credit or debit cards will be accepted.

 

Oh well, it is their loss. The person I went with (I was just coming along, and would never patronize a repeat violator) was there to buy two laptops, two desktops, a monitor, and other miscellaneous supplies for her business. As they no longer accepted plastic, she left without making a purchase, and took her business to a competing location. That merchant lost thousands of dollars in business today, and all future business from that customer, all because they don't seem to see the value in accepting cards and following the rules to do so.

[GEORGE]

I went to a small, independent computer store today. I had previously reported the location twice for requiring ID on all credit and debit card purchases. This merchant even had the nerve to install an incriminating sign blatantly proclaiming their intent to violate.

 

Well, that sign has now been replaced by a sign indicating that only cash and checks are valid, and that no credit or debit cards will be accepted.

 

Oh well, it is their loss. The person I went with (I was just coming along, and would never patronize a repeat violator) was there to buy two laptops, two desktops, a monitor, and other miscellaneous supplies for her business. As they no longer accepted plastic, she left without making a purchase, and took her business to a competing location. That merchant lost thousands of dollars in business today, and all future business from that customer, all because they don't seem to see the value in accepting cards and following the rules to do so.

THEIR LOSS

 

The TACO BELL here increased their sales 2 or 3 FOLD when they started taking credit cards

(they were CASH only)

 

I hope they LOSE 50% of their business for their STUPIDITY

Edited December 18, 2008 by GEORGE

[GEORGE]

I went to a small, independent computer store today. I had previously reported the location twice for requiring ID on all credit and debit card purchases. This merchant even had the nerve to install an incriminating sign blatantly proclaiming their intent to violate.

 

Well, that sign has now been replaced by a sign indicating that only cash and checks are valid, and that no credit or debit cards will be accepted.

 

Oh well, it is their loss. The person I went with (I was just coming along, and would never patronize a repeat violator) was there to buy two laptops, two desktops, a monitor, and other miscellaneous supplies for her business. As they no longer accepted plastic, she left without making a purchase, and took her business to a competing location. That merchant lost thousands of dollars in business today, and all future business from that customer, all because they don't seem to see the value in accepting cards and following the rules to do so.

I would have collected all the stuff and then presented the CREDIT CARD to prove a point

 

(assuming you had time to waste)

[whatsanenigma]

That's really bizzare that a computer store would switch to only taking cash and checks instead of just following the ID policy.

 

People tend to make really big purchases in computer stores, the kind you almost need to finance in some way. You're not likely to have enough for a whole brand new computer system in your checking account.

 

So even the people who would be perfectly willing to show ID or even go to the extent of writing "CID" on their cards will not be able to shop there due to not being rich enough to pay in cash.

 

The business will suffer and not just because of people deliberatly protesting their actions.

[Uncle Leo]

That's really bizzare that a computer store would switch to only taking cash and checks instead of just following the ID policy.

 

People tend to make really big purchases in computer stores, the kind you almost need to finance in some way. You're not likely to have enough for a whole brand new computer system in your checking account.

 

So even the people who would be perfectly willing to show ID or even go to the extent of writing "CID" on their cards will not be able to shop there due to not being rich enough to pay in cash.

 

The business will suffer and not just because of people deliberatly protesting their actions.

 

That's why the whole things seems kind of fishy. It would almost be like a new car dealer suddenly foregoing financing and demanding cash only.

[ElderGeek]

That's really bizzare that a computer store would switch to only taking cash and checks instead of just following the ID policy.

 

People tend to make really big purchases in computer stores, the kind you almost need to finance in some way. You're not likely to have enough for a whole brand new computer system in your checking account.

 

So even the people who would be perfectly willing to show ID or even go to the extent of writing "CID" on their cards will not be able to shop there due to not being rich enough to pay in cash.

 

The business will suffer and not just because of people deliberatly protesting their actions.

 

For what it's worth, I can understand the merchant's problem. I used to be one. Owned a small computer store,

and accepted credit cards, and DID NOT have a policy of checking ID's for purchases.. just signatures.

One week, for example, I was hit with about 23 thousand dollars in chargebacks. I was victimized by crooks that were

using stolen credit cards that must have been either cloned, or unsigned when stolen, and were signed

on the back by the criminals using them at my store. Since the sigs matched, the cards were accepted

by my employees (it involved 6 different cards in 6 different names, used by 6 different people. My security

cameras recorded the transactions, but the folks were never caught, and I was out 23k in revenue and

merchandise.

 

This was a number of years ago... I've long since gotten out of retail. But reading some of the comments

on this board where merchants have been referred to as stupid, criminal, salamanderic, and sundry other

"lower-than-pond-scum" analogies, it tends to awaken a sinking feeling in my gut that I had way back

then.. it was not fun having no money for food, having my electric turned off at home, and telling my son

he was not getting anything for his birthday.. I was living hand-to-mouth at the time and trying to make

a go of it. I had the expenses of the store, and 3 employees to pay, so the person who ate the 46 thousand

dollars in losses was me.. and yes, it was at least 46 thousand dollars in losses.. since I lost the money,

the merchandise purchased with the cards (for which I paid wholesale, and wholesalers didn't offer small

vendors like me the same kind of discounts they offered the big retailers), and also the cost of replacing

the merchandise, so I lost the money plus 2x the wholesale price of all the merchandise. Wholesalers like

Tech Data and Ingram really didn't care that I was ripped off.

 

Just my perspective.. and it's also the reason I don't argue when a small business operator wants to

see my ID. I remember he or she may have a family to feed, and it's hard to feed them on guidelines

and rules. It takes money.

[Uncle Leo]

That's really bizzare that a computer store would switch to only taking cash and checks instead of just following the ID policy.

 

People tend to make really big purchases in computer stores, the kind you almost need to finance in some way. You're not likely to have enough for a whole brand new computer system in your checking account.

 

So even the people who would be perfectly willing to show ID or even go to the extent of writing "CID" on their cards will not be able to shop there due to not being rich enough to pay in cash.

 

The business will suffer and not just because of people deliberatly protesting their actions.

For what it's worth, I can understand the merchant's problem. I used to be one. Owned a small computer store,

and accepted credit cards, and DID NOT have a policy of checking ID's for purchases.. just signatures.

One week, for example, I was hit with about 23 thousand dollars in chargebacks. I was victimized by crooks that were

using stolen credit cards that must have been either cloned, or unsigned when stolen, and were signed

on the back by the criminals using them at my store. Since the sigs matched, the cards were accepted

by my employees (it involved 6 different cards in 6 different names, used by 6 different people. My security

cameras recorded the transactions, but the folks were never caught, and I was out 23k in revenue and

merchandise.

 

This was a number of years ago... I've long since gotten out of retail. But reading some of the comments

on this board where merchants have been referred to as stupid, criminal, salamanderic, and sundry other

"lower-than-pond-scum" analogies, it tends to awaken a sinking feeling in my gut that I had way back

then.. it was not fun having no money for food, having my electric turned off at home, and telling my son

he was not getting anything for his birthday.. I was living hand-to-mouth at the time and trying to make

a go of it. I had the expenses of the store, and 3 employees to pay, so the person who ate the 46 thousand

dollars in losses was me.. and yes, it was at least 46 thousand dollars in losses.. since I lost the money,

the merchandise purchased with the cards (for which I paid wholesale, and wholesalers didn't offer small

vendors like me the same kind of discounts they offered the big retailers), and also the cost of replacing

the merchandise, so I lost the money plus 2x the wholesale price of all the merchandise. Wholesalers like

Tech Data and Ingram really didn't care that I was ripped off.

 

Just my perspective.. and it's also the reason I don't argue when a small business operator wants to

see my ID. I remember he or she may have a family to feed, and it's hard to feed them on guidelines

and rules. It takes money.

 

Excellent points. VISA & MC don't do anything to dissuade people from thinking that THEY cover losses, when in fact they don't. Maybe that's the secret to having the policy, other than a handful of annoying repeat complainers to deal with, it doesn't cost them anything.

 

The name calling and assumptions of criminal activity, while not 100% incorrect, is still juvenile and out-of-line. Merchants do have legitimate concerns, too.

[Continental]

IDs are anything but hard to fake. My cousin (college student) just got her first fake ID for $150.00, and it looks just like the real thing. Lo and behold, $150 and she's now 21....Voila. I myself had one when I first started college. I'm not saying this is legal, but it happens more often than not...I'd bet 75% of high school and college students have one, and most of them are just like the real ones, holograms and everything. You can have it say whatever name you like on it, along with your real picture.

 

Point is, if a thief is anything but a total salamander, he'll have already either gotten a fake ID before he goes to use the cards he stole, or he'll have cloned the info off the mag stripe on the card he stole to a new card, WELL BEFORE you ever get to see his smiling face. For a real CC fraudster, checking his ID isn't gonna do squat.

 

So, the net result of your insistence of IDs is probably very unlikely to stop an actual CC thief and a lot more likely to inconvenience and P.O. your true customers. Plus, as stated here, it is definitely against the issuer's policies, and eventually someone will probably report you.

[GEORGE]

CASH ONLY BUSINESSES have an easy time hiding profits (not that they will ever think of doing that)

[GEORGE]

How does a CASH/CHECK ONLY BUSINESS not have any bounced checks???

 

An approved credit card rarely bounces

[ElderGeek]

An approved credit card rarely bounces

 

 

Not necessary a universally true statement, In my experience, I had more

incidents of bounced checks versus chargebacks purely on a per-incident basis

but higher losses in chargebacks. The laws at the time stated a bounced

check for more than $500 could be charged as a felony, so most of the

people writing me bad checks kept it under $500. Also, the local laws allowed

for treble recovery (3x the value of the check, up to $1500). I gave people

an honest chance to redeem their check, and I only charged them my *real*

fees (my bank only charged me $4 for a returned deposited item at the time,

so I only charged them $5.. $4 for the fee, and $1 for me to notify them).

If they made good on it, no harm, no foul. If I had to turn it over to the

local PD for enforcement, I went for treble. In general, when averaged out,

I lost virtually nothing on bad checks, as getting arrested tends to make

the check writer find a way to pay the damages to me to avoid conviction.

The local court would usually expunge the record if they paid me before

trial date, and stayed clean for 6 months to a year afterward. I never used

collection agencies for bad checks.. it was a waste of time.

 

Chargebacks occurred less frequently, but almost always for higher-dollar

amounts, and the money and merchandise lost were rarely recovered. Most

of the time I didn't have the address of the purchaser, and getting that information

cost me time and money, and in most instances the person "owning" the card

simply told me their card was stolen or otherwise fraudulently used. My recovery

rate on chargeback expenses was under 20 percent. In the cases where

fraud wasn't involved or claimed, the purchaser claimed the merchandise was

broken or non-functional and that's why they did a chargeback. I remember

one chargeback for $1500 in business software in the old "mucho-floppy-disk"

media days.. they claimed the software disks were defective. When I finally

got them back, it was obvious all the boxes had somehow been under

water.. floppies don't like water. They claimed I sold the stuff to them

that way.. never mind the fact that the boxes stuck out like a sore thumb, and

I never would have put the stuff on the shelf like that (swollen cardboard, dissolved

glue/tape, etc).

 

To me, Chargebacks were *way* more of a problem than bounced checks.

 

Therefore, I would not agree that an approved card rarely "bounces".

[Uncle Leo]

How does a CASH/CHECK ONLY BUSINESS not have any bounced checks???

 

An approved credit card rarely bounces

 

You have a better chance of getting reimbursed for a bounced check than you would through a successful chargeback.

[athensgaguy]

That's really bizzare that a computer store would switch to only taking cash and checks instead of just following the ID policy.

 

People tend to make really big purchases in computer stores, the kind you almost need to finance in some way. You're not likely to have enough for a whole brand new computer system in your checking account.

 

So even the people who would be perfectly willing to show ID or even go to the extent of writing "CID" on their cards will not be able to shop there due to not being rich enough to pay in cash.

 

The business will suffer and not just because of people deliberatly protesting their actions.

 

For what it's worth, I can understand the merchant's problem. I used to be one. Owned a small computer store,

and accepted credit cards, and DID NOT have a policy of checking ID's for purchases.. just signatures.

One week, for example, I was hit with about 23 thousand dollars in chargebacks. I was victimized by crooks that were

using stolen credit cards that must have been either cloned, or unsigned when stolen, and were signed

on the back by the criminals using them at my store. Since the sigs matched, the cards were accepted

by my employees (it involved 6 different cards in 6 different names, used by 6 different people. My security

cameras recorded the transactions, but the folks were never caught, and I was out 23k in revenue and

merchandise.

 

This was a number of years ago... I've long since gotten out of retail. But reading some of the comments

on this board where merchants have been referred to as stupid, criminal, salamanderic, and sundry other

"lower-than-pond-scum" analogies, it tends to awaken a sinking feeling in my gut that I had way back

then.. it was not fun having no money for food, having my electric turned off at home, and telling my son

he was not getting anything for his birthday.. I was living hand-to-mouth at the time and trying to make

a go of it. I had the expenses of the store, and 3 employees to pay, so the person who ate the 46 thousand

dollars in losses was me.. and yes, it was at least 46 thousand dollars in losses.. since I lost the money,

the merchandise purchased with the cards (for which I paid wholesale, and wholesalers didn't offer small

vendors like me the same kind of discounts they offered the big retailers), and also the cost of replacing

the merchandise, so I lost the money plus 2x the wholesale price of all the merchandise. Wholesalers like

Tech Data and Ingram really didn't care that I was ripped off.

 

Just my perspective.. and it's also the reason I don't argue when a small business operator wants to

see my ID. I remember he or she may have a family to feed, and it's hard to feed them on guidelines

and rules. It takes money.

 

So your point is chargebacks suck, right?

 

Where do you get the idea that checking ID would have made you any less likely to get a chargeback? (hint: it doesn't)

[ElderGeek]

So your point is chargebacks suck, right?

 

 

Where do you get the idea that checking ID would have made you any less likely to get a chargeback? (hint: it doesn't)

 

No, that wasn't my point. My point, if there was one at all, was to say I can understand

the reason why small business owners would check id.

 

As for your assertion, in my experience, it isn't valid. I believe that it *would* reduce the likelyhood

of a retailer getting a chargeback as a result of fraudulent use. Most unsophisticated criminals won't

go to the trouble to create fake IDs just to use a stolen credit card that will only be "good"

for a couple of days at most. I would agree with you inasmuch as it does nothing to prevent

chargebacks for other reasons, such as the example I mentioned before. In my own personal

experience, I had fewer chargebacks claiming damage or non-functional products than

for alleged fraudulent use, since most people brought the item in question back if it was

malfunctioning or didn't want it - they didn't go to the trouble of contesting the charge. In my

case, I strongly believe that requiring an ID check would have decreased the incidence

of fraudulent use.... but I wish to point out that I never asked for ID on credit card transactions

while in business. I do, however, have friends still running retail businesses, 2 of whom

do require ID's for credit card purchases, and both of them had measurable chargeback

reductions after implementing that policy, even though they knew it could cause problems

with Visa and MC. I just called one of them prior to writing this and asked out of curiousity

if she could tell me how much doing that reduced her chargeback losses.. for CY 06 and

07 her chargebacks were within 10 percent of each other. For CY 08 so far her chargebacks

are about 40 percent of what they were in 07, and there's only 2 weeks left to the year.

 

So why do the clearing companies (MC/VISA) disallow ID checks? Simple.. because allowing it will

result in less use of their card products, and less revenue for them. They want people to

use the cards.. and anything that might possibly result in a consumer choosing to not use

their cards (like ID requirements, minimum purchase requirements, or increased fees for

the merchant to recover the transaction fee) are prohibited by their usage agreement.. these

all are potential revenue impediments to the card companies by making the use of the card

more expensive or less convenient to the consumer. They are not in the business of protecting

the consumer. They're in the business of generating revenue.

 

So, I guess I *am* saying that I believe checking ID is less likely to result in a chargeback. And

while I only have 1 direct piece of evidence and one other indirect one, when coupled

with my own experience, I'm comfortable with that assertion. Do you have any reference

that would dispute that? I'm not looking to argue or try to prove you wrong, but if my friends

are laboring under a misconception (and by doing it are taking a risk in preserving their

ability to take CC's), I would pass that information on to them and thank you for it.

 

There's no argument going on here... as a consumer, I consider it a violation of my privacy

to have to show my license to buy something. As a former retail business owner, I can

understand why it's demanded, improper as it may be. I played by the rules, I got burned

repeatedly, I went out of business, and I moved on and didn't whine about it. That's all.

 

As someone who has worked both sides of the counter, I'm simply providing observations

and opinions.

[Uncle Leo]

Where do you get the idea that checking ID would have made you any less likely to get a chargeback? (hint: it doesn't)

 

I presume you would agree that fraudulent chargebacks, and the merchant taking the loss for something that isn't their fault, isn't cool, so... what would you suggest to protect the merchant? Please, be specific.

[Uncle Leo]

No, that wasn't my point. My point, if there was one at all, was to say I can understand

the reason why small business owners would check id.

 

As for your assertion, in my experience, it isn't valid. I believe that it *would* reduce the likelyhood

of a retailer getting a chargeback as a result of fraudulent use. Most unsophisticated criminals won't

go to the trouble to create fake IDs just to use a stolen credit card that will only be "good"

for a couple of days at most. I would agree with you inasmuch as it does nothing to prevent

chargebacks for other reasons, such as the example I mentioned before. In my own personal

experience, I had fewer chargebacks claiming damage or non-functional products than

for alleged fraudulent use, since most people brought the item in question back if it was

malfunctioning or didn't want it - they didn't go to the trouble of contesting the charge. In my

case, I strongly believe that requiring an ID check would have decreased the incidence

of fraudulent use.... but I wish to point out that I never asked for ID on credit card transactions

while in business. I do, however, have friends still running retail businesses, 2 of whom

do require ID's for credit card purchases, and both of them had measurable chargeback

reductions after implementing that policy, even though they knew it could cause problems

with Visa and MC. I just called one of them prior to writing this and asked out of curiousity

if she could tell me how much doing that reduced her chargeback losses.. for CY 06 and

07 her chargebacks were within 10 percent of each other. For CY 08 so far her chargebacks

are about 40 percent of what they were in 07, and there's only 2 weeks left to the year.

 

So why do the clearing companies (MC/VISA) disallow ID checks? Simple.. because allowing it will

result in less use of their card products, and less revenue for them. They want people to

use the cards.. and anything that might possibly result in a consumer choosing to not use

their cards (like ID requirements, minimum purchase requirements, or increased fees for

the merchant to recover the transaction fee) are prohibited by their usage agreement.. these

all are potential revenue impediments to the card companies by making the use of the card

more expensive or less convenient to the consumer. They are not in the business of protecting

the consumer. They're in the business of generating revenue.

 

So, I guess I *am* saying that I believe checking ID is less likely to result in a chargeback. And

while I only have 1 direct piece of evidence and one other indirect one, when coupled

with my own experience, I'm comfortable with that assertion. Do you have any reference

that would dispute that? I'm not looking to argue or try to prove you wrong, but if my friends

are laboring under a misconception (and by doing it are taking a risk in preserving their

ability to take CC's), I would pass that information on to them and thank you for it.

 

There's no argument going on here... as a consumer, I consider it a violation of my privacy

to have to show my license to buy something. As a former retail business owner, I can

understand why it's demanded, improper as it may be. I played by the rules, I got burned

repeatedly, I went out of business, and I moved on and didn't whine about it. That's all.

 

As someone who has worked both sides of the counter, I'm simply providing observations

and opinions.

 

Stop making sense. It's verboten.

[whatsanenigma]

I presume you would agree that fraudulent chargebacks, and the merchant taking the loss for something that isn't their fault, isn't cool, so... what would you suggest to protect the merchant? Please, be specific.

 

At the risk of sounding snarky, let me point this out.

 

When it doesn't rain for a really long time, that isn't cool. What do I suggest to make it rain when we want it to? I have no idea what to suggest. But I do know that going outside with a megaphone and yelling "Hey you blankety blank clouds, give me some rain here!" will NOT work.

 

You don't have to be able to suggest a reasonable alternative to be able to know that something doesn't work.

[Uncle Leo]

I presume you would agree that fraudulent chargebacks, and the merchant taking the loss for something that isn't their fault, isn't cool, so... what would you suggest to protect the merchant? Please, be specific.

 

At the risk of sounding snarky, let me point this out.

 

When it doesn't rain for a really long time, that isn't cool. What do I suggest to make it rain when we want it to? I have no idea what to suggest. But I do know that going outside with a megaphone and yelling "Hey you blankety blank clouds, give me some rain here!" will NOT work.

 

You don't have to be able to suggest a reasonable alternative to be able to know that something doesn't work.

 

But, the status quo doesn't really work for everybody involved either, and that seems to be where the disconnect lies. Even if a specific plan isn't in mind, rather than throwing up hands and saying "I don't know" or "It's not my problem", a dialogue about the issue would be a good place to start.

 

I wonder how many people would say "If you can't stand the heat, stay out of the kitchen" regarding being in business, then turn around and bemoan the fact when places like Wal-Mart are our only shopping choices because too many places that are willing to offer decent options and customer service run on a thinner line close shop because they cannot afford excessive losses due in part to fraud? Fraud that probably could be greatly avoided if we allowed ourselves to rethink things.

[whatsanenigma]

But, the status quo doesn't really work for everybody involved either, and that seems to be where the disconnect lies. Even if a specific plan isn't in mind, rather than throwing up hands and saying "I don't know" or "It's not my problem", a dialogue about the issue would be a good place to start.

 

I wonder how many people would say "If you can't stand the heat, stay out of the kitchen" regarding being in business, then turn around and bemoan the fact when places like Wal-Mart are our only shopping choices because too many places that are willing to offer decent options and customer service run on a thinner line close shop because they cannot afford excessive losses due in part to fraud? Fraud that probably could be greatly avoided if we allowed ourselves to rethink things.

 

Yes, this makes sense. We really need to focus on finding a good alternative that suits all honest parties as best as possible.

 

What I focus on here is that the credit card companies have a certain contract that businesses are expected to follow. Credit card companies have more money than god and can hire all kinds of professionals to asess the risks of certain actions-and they have decided that checking ID does NOT decrease the rate of credit card fraud, at least not in a statistically significant way.

 

Credit card companies want to keep their problems to a minimum and I am sure this no-ID policy is the policy with the least risk to them. [ETA: The risk to them in terms of directly losing money, and in terms of losing customers who have lost money, or getting sued by the customers, things such as that.] We can speculate back and forth about how much fraud ID checking prevents versus how much it causes or even if it makes a difference at all-but the credit card companies have the studies and the stats and the professionals and they have this policy for a reason.

 

What is the better alternative? Honestly, the only thing I can think of is some bio thing like a fingerprint scanner. But who wants to do a thing like that? I am sure part of the answer lies also in better crime detection and prosecution.

 

But the credit card companies have figured out that ID checking isn't the answer and I'm sure they are working on a better one, but the fact also remains for now that when a contract is signed, both parties must abide by it. So any real challenge to whether or not ID should be checked should be given to MC/Visa/etc., not taken up with individual merchants and insisting they should take it upon themselves to check ID and put themselves at risk by violating the policy.

 

The bottom line is really that if someone wants to have their ID checked upon using a credit card, that person needs to pressure the credit card companies to change the policy, because that's where it all lies.

Edited December 18, 2008 by whatsanenigma

[Uncle Leo]

Yes, this makes sense. We really need to focus on finding a good alternative that suits all honest parties as best as possible.

 

What I focus on here is that the credit card companies have a certain contract that businesses are expected to follow. Credit card companies have more money than god and can hire all kinds of professionals to asess the risks of certain actions-and they have decided that checking ID does NOT decrease the rate of credit card fraud, at least not in a statistically significant way.

 

Is it possible that CC companies saying ID checking does not decrease fraud akin to cigarette companies claiming tobacco is harmless? Considering that their primary concern is making money, how much stock should we put in what they say?

 

 

Credit card companies want to keep their problems to a minimum and I am sure this no-ID policy is the policy with the least risk to them. [ETA: The risk to them in terms of directly losing money, and in terms of losing customers who have lost money, or getting sued by the customers, things such as that.] We can speculate back and forth about how much fraud ID checking prevents versus how much it causes or even if it makes a difference at all-but the credit card companies have the studies and the stats and the professionals and they have this policy for a reason.

 

I'm speculating of course, and tend to be cynical anyway, but I'd suspect the 'reason' is path of least resistance and passing the buck. They're not actually backing up this anti-fraud policy, they're passing the cost onto somebody else. I'd be more open to their statements if they actually put their money where their mouths are and backed it up themselves.

 

 

What is the better alternative? Honestly, the only thing I can think of is some bio thing like a fingerprint scanner. But who wants to do a thing like that? I am sure part of the answer lies also in better crime detection and prosecution.

 

But the credit card companies have figured out that ID checking isn't the answer and I'm sure they are working on a better one, but the fact also remains for now that when a contract is signed, both parties must abide by it. So any real challenge to whether or not ID should be checked should be given to MC/Visa/etc., not taken up with individual merchants and insisting they should take it upon themselves to check ID and put themselves at risk by violating the policy.

 

The bottom line is really that if someone wants to have their ID checked upon using a credit card, that person needs to pressure the credit card companies to change the policy, because that's where it all lies.

 

I've always thought something like using a PIN similar to a debit card (but not making it literally a debit card) would be a good move. I don't know enough about "PIN & Chip" to comment about the chip part, and I have heard that it has it's down points as well, but there's has to be a better solution that is more fair for everybody. I've never been one to reject anything simply because it's not an ideal or perfect change. A good solid step in a positive direction can be enough.

 

Personally, I would not favor fingerprint scans. If that were the only option, I'd rather leave thing as they are.

 

I also agree that, as long as the system is as it is now, merchants should abide by the agreements they sign.

[ElderGeek]

Credit card companies want to keep their problems to a minimum and I am sure this no-ID policy is the policy with the least risk to them. [ETA: The risk to them in terms of directly losing money, and in terms of losing customers who have lost money, or getting sued by the customers, things such as that.] We can speculate back and forth about how much fraud ID checking prevents versus how much it causes or even if it makes a difference at all-but the credit card companies have the studies and the stats and the professionals and they have this policy for a reason.

 

Bingo! The way I see it, there's absolutely no incentive for the Credit card companies to change their policy in this

aspect (ID checking). Their current policy maximizes their returns, the minimizes their risks...

 

1) If ID is required, a certain part of all potential transactions will not happen. This loses

transaction fee revenue for the CC company

 

2) If Fraud occurs, the consumer is credited and the merchant gets a chargeback. This preserves

the revenue stream for the CC company (they still keep their transaction fee which the merchant paid),

and the consumer (they get their credit value back.. the merchant is the one who loses money)

This form of protection to the consumer makes them *more* willing to use their credit card in the

future.. ensuring increasing returns for the CC company.

 

Look how well it works from a consumers' point of view.. it can be easily seen on this board by

the number of folks that strongly advise against using debit cards, and from their perspective

they're completely correct.. in a debit card transaction, the consumer and the bank bear some

of the risk, whereby with a credit card, the risk is virtually completely borne by the merchant. This

makes happy consumers, which can be evidenced by the chorus of voices here that say

in unison that debit cards are a bad thing, and credit cards exclusively should be used,

from the consumer's point of view, this is absolutely true, and let's face it, most of the folks

here are consumers. Not everyone, however, therefore the axiom is not an absolute truth.

Lots of "truths" are only valid from a certain perspective.

 

Example: The earlier statement that checking ID doesn't decrease fraud is only a fact when viewed

from the perspective of the CC clearing companies, since they have virtually 0 risk/liability for

fraud to begin with in nearly all circumstances. You can try to sue a CC company if your card

is used in a fraudulent way, but you're not going to get anywhere in most cases. If you didn't

notify them in a timely manner of your ID theft or card theft, it's not their liability. If you *did*

notify them, they will refund the money/credit to you. Either way, it doesn't hurt them, as they

will in turn recoup any losses from the merchant in a chargeback, and I never saw a transaction

fee refund offered. So, since there's already a very low (if not non-existent) loss for fraud to the

CC clearinghouses now, taking any steps to decrease fraud will not decreases their *losses*

due to fraud appreciably, and such steps may serve to decrease their legitimate income due

to making the process of using their product more cumbersome. Therefore, the position that

requiring ID verification does not decrease fraud risk is valid for them.

 

Make the same statement to a merchants' trade association, and I'd be interest to hear

the response..

 

The addition of the CVV code on the back of a card was not an innovation of the credit card

companies solely, but a security measure demanded by merchants who were being plagued more

and more by fraud chargebacks associated with telephone and other not-in-person transactions

where the physical card was not being presented. This provides a means to ensure that

the user is actually in possession of the card. It doesn't screen out theft or someone who skims

all the data for the card somehow, but it did serve a purpose, and it resulted in a reduction

in a specific type of fraud that it addressed.

 

Such is life.. in business everyone wants to make money. Unfortunately, the playing

field isn't level, and smaller businesses can't absorb or mitigate the risk like larger

ones can.

 

... and discussing it in an open forum *sometimes* gets enough collaborative jiuces

flowing that a real, genuine idea emerges. After all, you never know who's reading.

[Uncle Leo]

Sounds like the only way to effect any kind of positive change for merchants would be for merchants to band together. Maybe by refusing to take CCs for a time and cut into the CCs profits. Problem is, the bigger retailers would never be part of this as they can absorb the losses relatively easy.

[GEORGE]

HOW DOES CHECKING ID PREVENT CHARGEBACKS???

 

I don't get it..............

 

What is this deal with a business that gets $23,000 of chargebacks???

[athensgaguy]

No, that wasn't my point. My point, if there was one at all, was to say I can understand

the reason why small business owners would check id.

 

As for your assertion, in my experience, it isn't valid. I believe that it *would* reduce the likelyhood

of a retailer getting a chargeback as a result of fraudulent use. Most unsophisticated criminals won't

go to the trouble to create fake IDs just to use a stolen credit card that will only be "good"

for a couple of days at most. I would agree with you inasmuch as it does nothing to prevent

chargebacks for other reasons, such as the example I mentioned before. In my own personal

experience, I had fewer chargebacks claiming damage or non-functional products than

for alleged fraudulent use, since most people brought the item in question back if it was

malfunctioning or didn't want it - they didn't go to the trouble of contesting the charge. In my

case, I strongly believe that requiring an ID check would have decreased the incidence

of fraudulent use.... but I wish to point out that I never asked for ID on credit card transactions

while in business. I do, however, have friends still running retail businesses, 2 of whom

do require ID's for credit card purchases, and both of them had measurable chargeback

reductions after implementing that policy, even though they knew it could cause problems

with Visa and MC. I just called one of them prior to writing this and asked out of curiousity

if she could tell me how much doing that reduced her chargeback losses.. for CY 06 and

07 her chargebacks were within 10 percent of each other. For CY 08 so far her chargebacks

are about 40 percent of what they were in 07, and there's only 2 weeks left to the year.

 

So why do the clearing companies (MC/VISA) disallow ID checks? Simple.. because allowing it will

result in less use of their card products, and less revenue for them. They want people to

use the cards.. and anything that might possibly result in a consumer choosing to not use

their cards (like ID requirements, minimum purchase requirements, or increased fees for

the merchant to recover the transaction fee) are prohibited by their usage agreement.. these

all are potential revenue impediments to the card companies by making the use of the card

more expensive or less convenient to the consumer. They are not in the business of protecting

the consumer. They're in the business of generating revenue.

 

So, I guess I *am* saying that I believe checking ID is less likely to result in a chargeback. And

while I only have 1 direct piece of evidence and one other indirect one, when coupled

with my own experience, I'm comfortable with that assertion. Do you have any reference

that would dispute that? I'm not looking to argue or try to prove you wrong, but if my friends

are laboring under a misconception (and by doing it are taking a risk in preserving their

ability to take CC's), I would pass that information on to them and thank you for it.

 

There's no argument going on here... as a consumer, I consider it a violation of my privacy

to have to show my license to buy something. As a former retail business owner, I can

understand why it's demanded, improper as it may be. I played by the rules, I got burned

repeatedly, I went out of business, and I moved on and didn't whine about it. That's all.

 

As someone who has worked both sides of the counter, I'm simply providing observations

and opinions.

 

Stop making sense. It's verboten.

 

 

If they have the physical card, they most likely have an ID that was in the same package as the card.

 

If they made the card they can probably make an ID even more easily.

 

ETA: If someone saw a DL in order to accept one of my cards, that increased the chance of a chargeback from almost nil to 100%.

Edited December 19, 2008 by athensgaguy

[Uncle Leo]

If they have the physical card, they most likely have an ID that was in the same package as the card.

 

If they made the card they can probably make an ID even more easily.

 

ETA: If someone saw a DL in order to accept one of my cards, that increased the chance of a chargeback from almost nil to 100%.

 

You say these things as if they're the only possibilities. Far from it. It's easy to pick and choose which scenarios ID checking wouldn't help and ignore the others as if they don't exist. How about the scenarios where it would help?

Edited December 19, 2008 by Uncle Leo