Laurel Tielis

Picture this: I get to the head of the supermarket line, the cashier rings up my purchases, and I give him my credit card. Declined. I ask the cashier to swipe it again, and again, it’s declined.

Concerned, I call the credit card company. I’m told that they’ve had multiple uses of my account in Toledo, Ohio. But I’m holding my card in my chubby little hand, and I’ve never been to Ohio, let alone Toledo.

Not to worry, though. They’ll cancel my card and send me out a new one the next day. My only responsibility is to check my bill, and if there are any additional charges that aren’t mine, to notify them.

Three days later my new card arrives and all is well. Or is it?

Granted, it’s hard to be unhappy with a system that got me back up and running in next to no time, but it’s also uncomfortable to realize just how prevalent credit card fraud is, and to understand the billions of dollars it costs consumers, merchants, and banks. Sadly, in the United States, lack of credit card security is an accepted part of the system.

Stripes aren’t safe

Credit card fraud occurs in large part because the magnetic stripe that runs down the back of  cards used in the U. S., is easily replicated. These cards are just not safe. That’s why most of the world has moved on to smart cards, which have chips with encoded information.

Why does the U. S. trail in credit card security? Blame it on a lack of accord between of retailers and banks, as well as no incentive to make changes. U. S. merchants don’t have terminals that accept smart cards because banks don’t issue the cards; banks don’t issue the cards because merchants aren’t equipped for them. And so it goes.

Change is Coming, and it’s Good

So I was happy to learn that changes are afoot. Visa will start issuing smart cards in 2012, and has plans for a full roll out by 2015. Initially, they’re making it attractive for merchants to install the new terminals by eliminating the yearly security audits of their payment systems, which will save stores owners both time and money.

Instead of the carrot, they’re using the stick in 2015, when the burden of payment for some types of  fraudulent transactions on their cards will move from the banks to retail outlets. So the sooner retailers move to smart cards the better for their businesses.

If you want more ideas about bringing in business, I can help. I’ve been a retail reporter at Women’s Wear Daily and Home Furnishings News, a columnist at the Miami Herald and a correspondent at People magazine.

I’ve also handled the marketing and public relations at major corporations and small businesses. Need a speaker or a consultant? Connect with me at LinkedIn, or follow me on Twitter @laureltielis.

You can also get in touch at Ask Laurel (one word) at laureltielis.com. For easy and effective ways to bring in more business, read Ka-Ching! How to Ring Up More Sales.

Copyright © 2011 Laurel Tielis

Filed under: business, retail Tagged: | credit cards, customer relations, marketing, retail, sales, small business