Some stores accept ONLY chip cards?
May 26, 2016 5:56 PM   Subscribe

I had to replace my credit card this week due to fraud. I've received a super basic (no pretty image, no bank name, no chip, etc.) temporary card until my permanent one arrives. Just tried to use the temporary one, and was declined. Called up the credit card company and was told that the purchase was declined by the retailer because the card does not have a chip. Is this correct? Do some retailers only accept chip cards? I actually had to go through this whole new card number process not two months ago, and this was never an issue during that go around (even using it during interstate travel).
posted by riverandstars to Grab Bag (4 answers total)
One of the reasons the US lagged in changing to chip cards was because stores didn't want to bear the burden of switching terminals to chip readers. In recent years, As part of the big conversion to chip and signature, credit companies have put in new contractual agreements that basically said "you can still use swipe, but if there are fraudulent transactions the burden is on you. Transactions using chip will be covered from fraud on the credit card vendor's side."

So yes, some stores moved to chip only. It should increasingly become more frequent as new agreements are signed and the technology becomes ubiquitous.
posted by Karaage at 6:03 PM on May 26, 2016 [1 favorite]

All the chip readers I have seen work like this: if your card is a chip card, it will only read it as a chip card (and not swiping); if your card is not a chip card, you can swipe and it will work. As I understand it, if the card issuer has not made it a chip card, the liability shifts to them.

But so okay, I mean, it's possible, since the credit card company should know what it's talking about. If that's the case, the card will work elsewhere. If that's not the case, there was probably some other problem.
posted by J. Wilson at 6:08 PM on May 26, 2016

I have been to some places (outside the USA) where they pretty much assume you're trying to commit fraud if you don't use a chip - even if the card doesn't have a chip. It's relatively simply to clone the magnetic info from a card with a chip to a blank card without a chip after all.
posted by tiamat at 6:37 PM on May 26, 2016

Thanks - it does makes sense, regarding the security, burden on the retailer, etc., but not knowing about the possibility of being declined and everything working smoothly last time this happened, I'm thankful for the extra explanations. (Unfortunately) learning a lot about credit card fraud lately!
posted by riverandstars at 7:00 PM on May 26, 2016

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