Thursday, November 14, 2019

Credit Card Restaurant Scams

It pays to check your credit card balance daily - and to take a photo of the merchant receipt!

America, as I noted before, has resisted the implementation of credit card POS readers as they have in Canada and Europe - and most of the rest of the world.  POS terminals (Point of Sale, not Piece of Shit) are brought to your table, and you can insert your chip card, enter a PIN number, and authorize the sale.  Fraud is greatly reduced this way, and as a result, the percentage of each sale charged is less.

In America, the credit card companies deal with a lot of fraud, but they don't seem to care, as they get a greater percentage of each sale.  So they tolerate fraud, because overall, they make more money.  POS terminals have yet to catch on in the USA, and when you go to a restaurant, they walk away with your credit card, to some back room, where they swipe it on a machine and run the charge.

And in some instances, crooked servers or managers will simply photocopy the card, or take a photo of it with their smart phone (front and back) and then either use this data themselves to make fraudulent charges later on, or sell a set of this data to an "identity theft" thief (what we used to call just a thief or credit card thief) who then re-sells the data online to someone else, who attempts to make fraudulent charges.

My credit card - and a debit card - have been compromised this way three or four times in my lifetime.  In every case, I was not on the hook for the charges, and it is not clear who was, ultimately - the bank, the credit card company, or the merchant involved.   Since users are not greatly impacted, there is no hue and cry in the USA to go to POS terminals.  And since the system in the USA is so profitable for the card companies - and it discourages debit card use - it isn't about to change anytime soon.

Sure, we have chip cards now - but without the PIN and POS terminal, they are pretty useless in terms of card security.   Maybe they help prevent ATM fraud, but that's about it.

Anyway, what prompted this was a recent visit to a Greek restaurant in Jacksonville.  We went there to see a movie (and get tickets to Madam Butterfly simulcast from the Met) and stopped at this nice Greek restaurant for lunch.  We split an entree and the total cost was about $30 with two Greek beers.  I though I was being generous, leaving a $6 tip in cash.

The next day, I log onto my bank account and see the $30 charge as a "hold".   Two days after that, it appears as a settled charged for $42.   Someone added a $12 tip to the bill!   I may be a generous tipper, but 40% is a little over the top, and I don't get that drunk on one beer.  As I noted in an earlier posting:
And, by the way, this is important, as people will try to cheat you.   We had dinner in Jacksonville at a nice Greek restaurant.  The bill was $30 (we split an entree) and I left a $6 cash tip and charged the rest to my credit card.   The $30 shows up as a hold, but three days later, it shows $42 charged to the card - a $12 tip!  I call the restaurant, and "Ari" claims the credit card machine was acting up.  But as Booley said to Miss Daisy, "[Credit Card Machines] do not act up!  They are acted upon!"   No doubt the manager thought he could pocket $12 this way - I wonder how many other people have been cheated this way as well.   Why don't we move to POS terminals with PIN numbers like the rest of the planet?  I hate it when people walk off with my credit card and return many, many minutes later.  But I digress.
Anyway, I disputed the charge and so far, unless the manager contests it, I will be credited back the $12.   Is it worth the hassle (I had to scan in my copies of the receipt, and I sent them a cover letter as well)?   Well, probably not.  But it is possible that the manager is doing this regularly - filling in a tip of the customer didn't put one on the receipt, and hoping the customer doesn't notice.   It is likely the waitress pocketed the cash tip and then the manager, angry that "no tip" was left, added the $12 charge.  It is hard to say.

But I have heard of this happening with other people.  If you get a merchant receipt to sign, and you are leaving no tip (it is not a tipping scenario, or you left a cash tip) then it pays to put a line through the tip section and write the total in the bottom.  If not, a server can write this in for you, and it is hard to contest later on.  Some clumsy crooks even write over your number, or change a "1" to a "7" or some such nonsense.  Some don't even bother - since the tip amount is manually entered by the merchant, they can enter any number they want to.  Unless the customer contests the charge, no one will notice.   If enough customers contest the charges, the merchant could lose their merchant account privileges.

And many customers don't notice.  A vast majority of Americans barely check their credit card accounts once a month - most making a nominal payment and then just looking at the staggering balance and sighing.   Few go through, line-by-line, to check for fraudulent charges.  Few keep their receipts to confirm charges.   Like I said, I put receipts in my back pocket, and then at the end of the day, toss them in a big box under my desk.   I was able to find the Greek restaurant receipt this way.
Checking my balance daily and logging purchases in Quickbooks daily allowed me to catch this nonsense.   In the future, when in a strange restaurant, I guess I will have to take a photo of the merchant receipt with my cell phone.   No harm in having documentation of what was written down on the receipt.

I do like giving cash tips, on occasion, if I have cash to tip with.  Since the charge appears first as a "hold" and then as a "charge" later on, it is kind of annoying to go back and update each charge in Quickbooks to add in the tip amount.   But of course, one sure way to avoid this problem is to eat out less often.

Another alternative, of course, is to pay cash, but even that is problematic.   You pay a $30 tab with a $50 bill, and ask for change,  They bring you back change for two twenties, and now you have to get into a dispute with "Ari" as to how much money you gave him.  This is also a problem with some convenience store clerks - you give them a $20 and they give you change for  $10 bill - hoping you don't notice.  If you do notice, they claim innocently that they made a mistake, or worse, claim you gave them $10 and refuse to give correct change.    To help avoid this problem, it pays to say, when paying in cash, "Out of $20" or "Here's $20" loudly and firmly, so they don't "accidentally" confuse your $20 bill with a $10 one.

Even if they play it straight, there is always the smart-ass waiter who brings you $10 change in a $10 bill, for a $30 tab paid with two twenties.  Your choice then is to leave a $10 tip, or ask for more change.   A good waiter brings back change that can be used to leave a 15-20% tip.

Of course, all these scenarios have one thing in common - they hope you are too relaxed, too tired, or too drunk to notice that they've nicked you for a few dollars here and there, or nicked your credit card entirely.   It is sad, but you have to be alert when dealing with strangers - or even people you know, when it comes to money.