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EMV Implementation: Grocery Industry Guidelines to EMV Liability Exposure (MAG Quarterly- Volume Four, Issue One)

By Hannah L. Walker, Food Marketing Institute 

March 3, 2016

As the October, 2015 EMV migration deadline quickly approached, many of the Food Marketing Institute’s members faced a busy holiday season newly exposed to additional fraud liabilities.  FMI’s Electronic Payments Systems and Asset Protection Committees shared ideas on additional security measures grocers could take after the liability shift and before they were fully EMV enabled.  The exercise resulted in a best practices guide that FMI has shared with its members as a resource for new ideas they may not have yet considered.  We always encourage our members to always be mindful of card operating rules and any applicable laws, but to take the steps they deem necessary to help reduce an uptick in chargebacks as they await EMV certification.   


Suggested best practices for non-EMV members

1) If you decide to do nothing at this time, we suggest you begin tracking / monitoring impact. 

2) At a minimum, we suggest companies make it a requirement to ask for a state ID for any card transactions of $100 or over involving gift cards. 

3) Some member companies have decided to remove the capability to purchase credit on credit, so all gift card purchases would need to be done with debit or cash. 

4) Some member companies have added address verification systems (AVS) to their credit card processing. Just like you enter a zip code at the most fuel pumps, they now prompt for zip code at point of sale. The system will bounce the 5 digits keyed to the billing address. If they get a mismatch, they have trained all cashiers to ask for state ID. The register prompts “Mismatch”. It’s not a “hard” stop, just a slowdown. The cashier will ask some questions and get a supervisor if needed. Transaction under $50 would process normally even with a mismatch. Any transaction over $50 that gets a mismatch will need to have ID verification. 

*These companies report no negative pushback from customers. Making sure that all front end personnel are able to explain why they are using AVS is the key. “It’s to protect the customer”.   

Additionally, companies should be sure that all front end personnel attempt to identify suspicious orders and call a manager when necessary. These signs may include:

•         Guest/customers attempting multiple credit cards with declines

•         Guest has a stack of credit cards visible and outside a wallet

•         Buying large quantities of open value gift cards; VISA, MC, AMEX

•         Buying large quantities of beer or wine

•         When asking for ID, they become nervous and in a hurry

Other suggestions…. 

• Don’t accept credit cards for gift card transactions. Financially you can argue its not profitable considering the exchange rates and gift card commission anyways. • Ask for ID on all CC transactions. • Set up Point of sale system to prompt for manager approval for a certain dollar amount spent on gift cards. • Cash only • Limit purchase only at Customer service instead of front end • No manual entry if mag strip don’t work • CVV verification on manually entered credit transactions for any order • Over $1000 for any entire order, have a manager override on the POS • On reloadable gift cards for fuel sites and service desk, prompt a message to the effect that nobody from our help desk or corporate will ask you to activate a card over the phone • Reloaded gift cards are age restricted so require they show ID. • Do not allow purchase of a gift card with a prepaid or reloadable Visa, Amex, MC, or Discover.  Must use regular credit, debit, check or cash. • Do not allow customer to use a credit card (or check) to buy a prepaid or reloadable Visa, Amex, MasterCard, and Discover gift card – must use debit or cash • Implement check ID and transaction amount limits per customer and per day to help mitigate risk.