Duplicate Debit Debacle Hits Best Buy, Macys. Who’s Next?
Written by Evan Schuman and Fred J. AunMarch 18th, 2009
Following a December glitch at Macys that saw 8,000 customers double- and tripled charged for debit transactions comes word of an eerily similar triple charge glitch at Best Buy this month. In both cases, the retailers initially painted the problems as isolated incidents. In both cases, the retailers thought initial debit card swipes didn't work and asked the customer to try again, sometimes twice more. And in both cases, the banks removed money from the consumer's bank account equivalent to two and three times the price of the product.
Could these be coincidences? Might they indeed be isolated debit card incidents? Absolutely. But this also might be an initial heads up that the debit card system relied on by major retailers today has inherent flaws. What happened, with both Macys and Best Buy, with software specifically designed to look for and prevent these kinds of multiple identical charges? What about the systems at the card processors and the banks?
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3 Comments | Read Duplicate Debit Debacle Hits Best Buy, Macys. Who’s Next?
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Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk.com? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.
Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk.com? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.
-Christine
March 19th, 2009 at 5:25 am
When you swipe your swipe your card. Ask for an error message, call your bank before swiping your card again. If you are going to use a debit card, do not write checks.
March 19th, 2009 at 10:05 am
Almost all banks/transaction processors in the world have the inherent flaw that caused the scenario described above. They approve the credit/debit transaction and then pass this message to the POS and then assume they’ve done their part and all is well. There are some additional checks behind the scenes to determine if the message was successfully received, but there is still a small window of opportunity for failure.
HSBC is the only bank I’ve seen whereby they require the POS system to respond with a message stating “Yes, I’ve received your approval message and here is the approval code you just sent me which proves I actually received your message – all is well”. If the bank does not receive this message within a certain time, it will assume all was not well and will reverse the last transaction.
The chance of failure in this scenario is about the same as in the scenario at Best Buy and Macy’s however, the liability is shifted from the consumer to the retailer. Instead of the customer being double/triple charged, it is possible they walk out with free merchandise. This of course, raises the argument is it better to annoy a loyal customer (who will notice being overcharged) or take the hit where it might not be noticed (unless the retailer is diligently monitoring their suspense/settlement files). Most retailers prefer the former since they know they can make amends. If a customer walks away with free merchandise, it may be impossible to ever collect that money.
The bottom line – monitor your bank statements regularly and refute all questionable transactions. The onus is on the retailer to prove you authorized the charges.
March 19th, 2009 at 3:43 pm
Interesting that this double posting issue with debit cards keeps happening. My daughter’s debit card was double billed by AT&T when she bought the iPhone 3G. Apparently only debit cards were affected, according to AT&T, and happened to a lot of people.