http://www.storefrontbacktalk.com/supply-chain/duplicate-debit-debacle-hits-best-buy-macys-whos-next/ Techniques, Tools and Tirades about Retail Technology and E-Commerce Wed, 10 Mar 2010 17:25:32 +0000 http://wordpress.org/?v=2.9.1 hourly 1 http://www.storefrontbacktalk.com/supply-chain/duplicate-debit-debacle-hits-best-buy-macys-whos-next/comment-page-1/#comment-57101 Bruce Daughtry Thu, 19 Mar 2009 20:43:56 +0000 http://www.storefrontbacktalk.com/?p=2596#comment-57101 Interesting that this double posting issue with debit cards keeps happening. My daughter's debit card was double billed by AT&T when she bought the iPhone 3G. Apparently only debit cards were affected, according to AT&T, and happened to a lot of people. Interesting that this double posting issue with debit cards keeps happening. My daughter’s debit card was double billed by AT&T when she bought the iPhone 3G. Apparently only debit cards were affected, according to AT&T, and happened to a lot of people.

]]> http://www.storefrontbacktalk.com/supply-chain/duplicate-debit-debacle-hits-best-buy-macys-whos-next/comment-page-1/#comment-57076 Terry Bouvier Thu, 19 Mar 2009 15:05:49 +0000 http://www.storefrontbacktalk.com/?p=2596#comment-57076 Almost all banks/transaction processors in the world have the inherent flaw that caused the scenario described above. They approve the credit/debit transaction and then pass this message to the POS and then assume they've done their part and all is well. There are some additional checks behind the scenes to determine if the message was successfully received, but there is still a small window of opportunity for failure. HSBC is the only bank I've seen whereby they require the POS system to respond with a message stating "Yes, I've received your approval message and here is the approval code you just sent me which proves I actually received your message - all is well". If the bank does not receive this message within a certain time, it will assume all was not well and will reverse the last transaction. The chance of failure in this scenario is about the same as in the scenario at Best Buy and Macy's however, the liability is shifted from the consumer to the retailer. Instead of the customer being double/triple charged, it is possible they walk out with free merchandise. This of course, raises the argument is it better to annoy a loyal customer (who will notice being overcharged) or take the hit where it might not be noticed (unless the retailer is diligently monitoring their suspense/settlement files). Most retailers prefer the former since they know they can make amends. If a customer walks away with free merchandise, it may be impossible to ever collect that money. The bottom line - monitor your bank statements regularly and refute all questionable transactions. The onus is on the retailer to prove you authorized the charges. Almost all banks/transaction processors in the world have the inherent flaw that caused the scenario described above. They approve the credit/debit transaction and then pass this message to the POS and then assume they’ve done their part and all is well. There are some additional checks behind the scenes to determine if the message was successfully received, but there is still a small window of opportunity for failure.
HSBC is the only bank I’ve seen whereby they require the POS system to respond with a message stating “Yes, I’ve received your approval message and here is the approval code you just sent me which proves I actually received your message – all is well”. If the bank does not receive this message within a certain time, it will assume all was not well and will reverse the last transaction.
The chance of failure in this scenario is about the same as in the scenario at Best Buy and Macy’s however, the liability is shifted from the consumer to the retailer. Instead of the customer being double/triple charged, it is possible they walk out with free merchandise. This of course, raises the argument is it better to annoy a loyal customer (who will notice being overcharged) or take the hit where it might not be noticed (unless the retailer is diligently monitoring their suspense/settlement files). Most retailers prefer the former since they know they can make amends. If a customer walks away with free merchandise, it may be impossible to ever collect that money.
The bottom line – monitor your bank statements regularly and refute all questionable transactions. The onus is on the retailer to prove you authorized the charges.

]]> http://www.storefrontbacktalk.com/supply-chain/duplicate-debit-debacle-hits-best-buy-macys-whos-next/comment-page-1/#comment-57050 Greg Patrick Thu, 19 Mar 2009 10:25:15 +0000 http://www.storefrontbacktalk.com/?p=2596#comment-57050 When you swipe your swipe your card. Ask for an error message, call your bank before swiping your card again. If you are going to use a debit card, do not write checks. When you swipe your swipe your card. Ask for an error message, call your bank before swiping your card again. If you are going to use a debit card, do not write checks.

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