Debit or Credit – A Risky Proposition

The concept of using a credit card seems simple enough.  You give the card to the cashier, they swipe the card through the register, a receipt pops up and the customer signs it, and the cashier verifies the signature to the signature on the card.  Simple right?  Not so, apparently for the modern retail shopper.

Back in the early days of Woolworth, the company had to different types of charges:  credit card charges and employee charges.  The credit card charges worked pretty much as explained above except that the credit card was swiped through a VeriFone 2000 terminal (long been discontinued, but still available).  After swiping the card, the employee would enter the dollar amount and press the enter key.  After a few seconds, an approval code would show up on the screen.  Every credit card was imprinted on a special form that had the card number on it, along with the transaction amount, a brief description of the merchandise, and the approval code.  It was this paperwork that the customer signed and accordingly the customer was given the middle copy.  Usually, I also included the carbons with their copy so that there would be little chance of identity theft (yes, we even considered it to be a problem back in the late 1980’s and early 1990’s).  When the company upgraded the registers, the VeriFones disappeared, the manual charge slips disappeared, and the swipe device was built into the register.   At this point, the customer would sign the copy that came out of the register and we would still check signatures just like before. 

The most interesting thing about the VeriFone system was that the approval codes sometimes were odd to say the least.  At one time, a foreign country Visa card generated the approval code of “HI”.  Thinking this was some sort of error, I swiped the card again and got the same code.  After calling over the manager on duty, they agreed with me that this was probably a malfunction and that I should swipe the card a third time.  Once again the same code came up.  This time I accepted this as the code, not just the equipment being friendly.  Hopefully, the customer wasn’t charged 3 times for the charge.

The other form of Woolworth charge was the employee charge.  This meant that employees could charge items such as meals in the restaurant or small purchases against their check and have it deducted from their next paycheck.  This usually worked as implied as long as the employee had worked enough for that week to pay for their purchase.  A file was kept in the office so that the customer service person could check how many hours the employee worked to prevent an overage by the purchasing employee.  However, there were times when the employee received a voided check as they spent their entire check on purchases.  For some dumb reasons, the employee always seemed proud of doing this stunt.  There were times when employees owed the company money if they quit and they made purchases that they shouldn’t have.  Ironically, this charge policy lasted through the entire duration of the company’s remaining existence.

During my short time at HQ, I saw the beginning usage of the business credit card.  Business cards unlike personal cards didn’t have a person’s name on them, but instead the name of the company.  This meant that anyone who had possession of the card could use it with no questions asked.  So sadly, there was no way to verify who the person was using the card or verify any signature.  Because of the way these cards physically were handled, many of them were extremely dirty and thus were impossible to scan through the register.  Imprinting these cards were no better as many were damaged beyond a decent imprint.  The one thing about these cards were that we had to take them no matter what.  I believe that fraud existed quite a bit with these cards.  It wouldn’t be until my Staples existence that cards were questioned.

Now we come to the awful company of Staples.  While this company accepted all 4 of the major credit cards, it also had a variety of its own credit cards.  The personal card was meant for individuals who wanted a store credit card even though the interest rate of these cards were over 20%.  The standard business charge card allowed businesses to pay for purchases like personal cards did and at around the same high interest rate.  The third type of account was the “OPEN ACCOUNT”.  These were for customers who paid with purchase orders and wanted a detailed bill sent monthly.  The fourth type of card was the “CONVENIENCE CARD”.  These cards were the oddest of the bunch as they always produced the same approval code of “0APR0”.  As far as I could ever figure out, these cards were like debit cards for businesses, but then again I never quite understood what these cards purpose was. 

When I first started with the company, the only way that debit cards were accepted was as credit cards.  When the company changed its register system over to the touch screen system, the addition of debit card acceptance arrived.  Finally customers could use their debit cards to pay for their purchases and get cash back in amounts of $10, $25, or $50.  No more ATM fees for the customer when they could get money right at the register.  While being convenient to the customer, it created many times where there were shortages in the drawer because not enough cash was available to feed all the debit card customers. 

However, the major problem at Staples remained to be the acceptance of the four major credit cards.  Under the old register system, the cashier always had the credit card in their possession during the transaction so that they could check the signature with the card.  The new register system created quite a hassle on the other hand.  Since the credit card/debit card box faced the customer, it was possible for the customer to swipe their own card and many of them were angry when the cashier asked to see the card even though it said on their screen to give the card to the customer.  The signature that used to be on paper now showed up on screen providing a much more difficult way of comparing signatures.  More often now than ever, an i.d. was required to compare the signature to.  

However, more times than not the other cashiers NEVER checked the card or else just hit the “ACCEPT” button on the register without caring about what they were doing.  It is this sort of lack of interest that costs the company money and also creates fraud.  Even worse than that is when managers did a manual approval code without even calling the credit card company to get a real authorization number.  As with checks, I always wondered how managers could make an approval without getting a REAL authorization number.  I guess it was just managers acting dumb again.

Commentary:  Bad Ways to Take Credit Cards

Back in the days of Woolworth, the chance of getting a credit card not matching the customer was about 1 in 100 transactions.  In the Staples days, that number dropped to a mind-numbing 1 in 10 transactions of cards not belonging to the customer.  Mind you this is my accrued statistics that may not be true to every employee, but then again if the employees were to check credit cards more diligently they too would find out much fraud in the presentation of charge cards.

Back at Woolworth, it was possible to take a charge card that belonged to a spouse or parent as long as the person had a note stating that they had permission to use the card.   This note had to be dated and signed by the cardholder.  We also kept the note and attached it with the store copy of the receipt.  At Staples, this was a no-no policy.  Apparently, the credit card companies changed their minds about how the cards were to be used and be used ONLY by the cardholder themselves.

Yet, it seems that in today’s society, the credit card is not compared to anything and the card is sometimes even ignored by the cashier.  Case in point, Walmart never even looks at the card even though I purposely place the card signature side down forcing them to pick up the card.  They never ever do which is VERY BAD!  Hasn’t Walmart heard of identity theft?  It seems to run rampart lately as more and more companies seem to not bother to check the card at all.  Do these companies know who presents EVERY card?   I doubt it.  What I find even worse are those companies like Target that lets the customer swipe the card without even signing anything.  As long as the transaction is under $50, a customer could purchase a lot without having the real cardholder even know it has happened to them.

On the other side of the coin are those companies that are way too restrictive.  Such an example is the recently opened Books-A-Million store.  When you put down the charge card, some of their employees ask for an id.  I am EVEN more OFFENDED by this because they should at least LOOK at the card, which they don’t do.  Why ask for an id when you don’t even look at the charge card at all?  Defeats the whole purpose of the charge procedure!  The other big offender is Best Buy.  While Staples got rid of the inputting the last 4 digits into the register,  Best Buy continues to input the numbers and then makes the customer hit the “YES” button on the credit card pad to accept the transaction amount.  Worst part of their shopping experience is that the signature pad is so bad that it never looks like my signature.  Recommendation to Best Buy:  get better equipment that you can actually sign with better success. 

It is sad that the stores don’t do more to prevent identity theft when taking charge cards.  They should look at signatures and question them when they don’t match.  It reminds me of an employee from Staples whose name was Shakalaka DingDong (not his real name).  This employee NEVER checked the cards no matter how many times I and the managers told him to do so.  Of course, managers hardly ever cared about what the employees were doing regarding charge cards. 

My suggestion to all retailers:  DON’T BE A DINGDONG!!  CHECK THOSE CARDS AND STOP IDENTITY THEFT!!  Your life will be better for it!

Up Next:  Your Receipt – Here Today, Gone Tomorrow!