Supermarket sues banks over chip card shift, says it lost $10K in 4.5 months | Hacker News Reader

Supermarket sues banks over chip card shift, says it lost $10K in 4.5 months

arstechnica.com

45 pointsprotomyth12 comments

As it turns out, they actually have a valid reason for this. If the merchant has stated that they're ready for certification, I don't see why they should be held liable when the certification company has been dragging it's ass.

And they were ready months in advance, too.

"Tellingly, nothing Milam’s Market could have done—short of making the business-crippling decision to stop accepting Visa cards—could have prevented this outcome,” the complaint added

Is that really true? You can't ask for photo ID, a second signature, a pre-verification of the charge against credit limits?

>All the networks allow a merchant to ask for identification. MasterCard and Visa, however, explicitly prohibit retailers from requiring an ID to accept a properly signed card.

Source: http://www.creditcards.com/credit-card-news/can-retailers-as...

That seems like a huge loophole that the merchant can use in their lawsuit.

On the other hand, "properly signed" still means that the merchant can compare signatures on the card and receipt, right?

Forging signatures is trivial.

Not to mention, the signature space on the back of a card is so tiny that we just expect a person's real signature to look rather different.

Chargebacks have nothing to do with credit limits. If you send a transaction online (which any fixed terminal would always do), it will be checked against credit limits.

Chargebacks are different. Chargebacks are when the customer alleges that the bought item doesn't satisfy it's intended function. Say you buy a chinese 2T harddrive and it turns out to have a 2GB SD card inside with firmware that fakes the free space.

Chargebacks really suck for merchants, because

1) recovering the item is the responsibility of the merchant. The bank won't help with that. In most cases, neither will the police. That leaves private sector "loan collectors" and "repo men" but they're not free, meaning a supermarket wouldn't do it for almost any item.

2) there's a cost associated with a chargeback, to be carried by the merchant. In other words, you sell $10 to customer, he complains, you get to pay $15 back to the bank (the 5$ is a ballpark amount, it varies)

The costs for this were initially carried by the banks in order to get the mail-order economy going. But now banks have the ability to impose terms on their merchant customers, so they're forcing merchants to accept onerous demands.

I think that this supermarket store is trying to get a judgement based on a basic legal principle, which doesn't often work. But the basic principle is that contracts should not be "one-sided". If one side is able to impose any terms on the other side, those clauses aren't enforceable.

I wish them good luck, because this is really hard to get a judgement for. And frankly, I hope they win just because they're a small merchant taking on a large bank. Those guys really could use some serious judgments against them. That said, their chances seem slim.

Class action suite. The amount is not the issue. The lawyers looking to make millions is. 10k is a write off for most grocery stores.

From what I've read, the fancy credit card terminal that was deployed nationwide is actually not compatible with European-style chip-and-pin, which will be the next version of credit card standard. So billions were spend for nothing.

The hardware is compatible, but the software isn't. From what I understand, the card enumerates what applets it has installed and the POS picks the first one it knows how to interact with.

The mess of bad hardware, software and UX really makes the acronym POS so appropriate ;-)

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