Why Your New Credit Card Isn’t as Safe as Promised
Life + Leisure

Why Your New Credit Card Isn’t as Safe as Promised

Getty Images/Joe Readle

You’ve probably received a newfangled chip card that offers better protection against ID theft when used in a store. Too bad most stores aren’t accepting them yet.

Three-quarters of retailers haven’t enabled the card readers that accept chip cards, even though most national and regional chains have installed them at their checkouts, according to a new report by Consumer World.

That’s bad news for Americans who are left at risk of ID theft, but it could also be a costly mistake for retailers. After Oct. 1 of this year, the stores could be financially liable for any losses from card fraud if they swipe chip cards rather than use the chip technology for verification. (Previously, the card issuers bore responsibility for fraudulent charges.)

Related: Your New Chip Credit Card: Everything You Need to Know

“It seems crazy that millions of dollars have been spent to issue chipped credit cards and to install special card readers, but shoppers’ security is no better than it was before because the systems haven’t been enabled by most retailers,” Consumer World founder Edgar Dworsky said in a statement. “It’s also frustrating and confusing for shoppers who see the new terminals but don’t know whether to swipe or dip their credit cards.”

Among the retailers that haven’t enabled the technology in all their stores yet are some holiday-shopping heavyweights like Sears, Costco, Kohl’s, Toys ‘R’ Us, and Bed Bath & Beyond.

Some say they are still testing the software; others are waiting for certification from the card networks (such as Visa, MasterCard or American Express). And several said they didn’t want to roll out the new system during the busy holiday shopping season.

Of the stores surveyed, only 11 national chains of the 48 surveyed had enabled the chip-and-pin technology in all stores, including previous hacking victims Target and Home Depot.

TOP READS FROM THE FISCAL TIMES