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Retailers Scan New Problem with Self-Checkout - Fraud

Major retailers such as Wal-Mart and Home Depot have been using self-checkout lanes to speed up the checkout and payment process for their customers, but what these merchants didn't plan on is an increase in credit card fraud.

Self-checkout stations, such as NCR's FastLane, allow shoppers to scan, bag and pay for items all on their own. What's missing is the cashier. Stores have employees available to oversee the new lanes - either monitoring a screen at a main terminal or walking around answering questions, but there no longer is someone at each register not only to scan items and accept payments but also to check IDs and compare the signature on the credit card with the signature on the receipt.

Thieves are aware of this window of opportunity - thus, the increase in fraudulent transactions.

Although some retailers have installed surveillance cameras, experts say they must do more to protect themselves from this type of fraud by using "traditional" methods of prevention, such as printing dual receipts at the point-of-sale and having a store employee check signatures and identification, as before.

The introduction of self-checkout technology began with grocery stores chains in the late 1990s; today, more and more retailers are adding it or testing it in their stores. Home Depot uses it in 500 of its 1,600 U.S. stores. A recent study conducted by IDC and sponsored by NCR, one of the leading suppliers of the technology, found that about 70% of consumers in five countries would be likely to use these systems.

A Visa USA Director said merchants have a responsibility to check IDs at the point-of-sale, the Sacramento Bee reported. Credit card issuers lose hundreds of millions of dollars every year from credit card fraud, and often these losses get passed on to cardholders and merchants in the form of higher fees.

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