As financial institutions, technology partners, and card producers grapple with ‘faster payments,” identity theft, and card fraud, we often leave one important element out of the fraud equation. And that is our retailers. No, I am not taking another swipe at the data breaches that have been dominating the headlines, but I am going to take a crack here at the merchandising departments whose cross promotions at the register seem to be at odds with what the whole fraud and security community is trying to thwart.
Yep, right there at the register, fraud is in front of your nose in pretty obvious and flagrant ways that have more to do with social engineering issues than a piece of plastic or a chip.
Recently I was shopping at a well-known retailer here in New York. When my turn came up to the register, armed with the discount coupons required to get my 20 percent off that day, I was greeted with a barrage of a promotional pitches before I could even get my items lined up on the counter. One of these involved a new Customer Loyalty program, just launched at this institution, which I nicknamed “Good ‘n Plenty”. (The sales clerk didn’t get my sarcasm, I guess.) I didn’t realize when I said “sure, sign me up” what was going to happen next.
Instead of just capturing my credit card with a swipe along with an email address – the register attendant made me provide detailed personal information “out loud”, fill in my full birth date and enough other personal information to make me uncomfortable. I said, “Really miss, do you realize that this is anti-security?” I got “the burn look” and a comment about that being her job. Indeed. From my birthday, to the store’s ongoing policy of saying the last four digits of my credit card out loud – any decent fraudster potentially could pull off a huge haul hanging out at this retailer, especially at promotion time.
Call me sensitive – having recently had my card hacked and my bank driving me crazy over it – but there has to be a better way for retailers to launch customer loyalty programs or process sales coupons.
And to add insult to injury, I was sent away with a card and brochure and told I had to finish registering online – I mean really??? So why give all that information at the register – which just holds up the shoppers online anyway?
Just as banks worry about cross-channel fraud
and do everything they can to lay traps across the financial institution to capture the bad guys in their nets, I think it’s time for retailers to start looking cross channel as well. Here’s my recommendation: take a good look at your merchandising requirements down there at the register and see where all the good technical work gets thwarted. What good does it do for the security/fraud staff at the retailer and at the banks to work hard implementing card security technology if the environment around the cash register is a big, leaky fraud-prone boat?
I love loyalty programs – I’m a card-carrying loyalist at my vitamin store, my local pharmacy, and at least one other department store – but I am also one of those customers who’s been burned by the fraudsters one too many times. And as consumers like me get more informed - and most are at this point - I am betting that they too will be just as concerned as I was.
At the end of the day, we frequently talk about faster payments, EMV
and other related industry trends in this blog – and occasionally another related subject comes up. Today that related subject is retail education. As we become more mobile and as retailers compete for our dollars, perhaps retail leadership should have their security teams shake hands with merchandising and training teams and come up with a more secure way to process our transactions and to execute their daily “specials.”
With that, I am betting, will come more customer loyalty down the road – and a lot less fraud to boot.