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    'Chips and Dips' Takes on New Meaning in Food Stores

    FMI's Sarasin addresses nationwide shift to EMV

    With the payment card industry’s move to a chip-based system this week, “chips and dips” will take on a new meaning at many retail food stores.

    The long-awaited migration to the chip-based payment cards, notable for their embedded gold-colored chips, are designed to eliminate the most common form of payment-card fraud. The new cards store their account number and expiration date on the chips, which transfer account information and generate a one-time-use code to confirm that the card and account are legitimate at the point of sale.

    "Food retailers have been looking for new ways to make retail data and shopper payment transactions safer and as efficient as possible," said Leslie G. Sarasin, president/CEO of the Food Marketing Institute (FMI). "The industry has invested billions of dollars to purchase new payment terminals with a ‘chip’ reader and new software to process ‘dips’ of the card instead of the familiar swipe technology."

    Accordingly, Sarasin advises card-holders to ask their payment card companies for a PIN – which adds an extra layer of security and makes it even more difficult – if not impossible – for cybercriminals to replicate counterfeit cards to make their transactions even more secure from fraudulent activity.

    The Retail Industry Leaders Association concurs. "Unfortunately, retailers are only one-half of the equation, and at present, banks and credit unions are not meeting the retail investment with the same commitment to consumer protection," said EVP Brian Dodge. "Chip and PIN has been proven to combat fraud dramatically," added RILA's Dodge. "But that's not what American consumers are getting, and thus far banks have gone to great lengths to blur the lines between the two distinctly different transactions."

    Looking ahead, Sarasin said, “While some food retailers will be ready to accept the new ‘chip’ cards through the holiday season, many more are preparing to transition after the first of the year.  Importantly, consumers can use either traditional mag-stripe ‘swipe,’ or new chip cards with the same liability protections."

    "Since food retailers are customer-service-centric," Sarasin continued, "they recognize it would be bad business sense to test such a customer-facing transition during a time of year when retail customers are counting on retailers for smooth in-store experiences. We remain committed to the strongest consumer protection tools available.”

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