October 30, 2015
Is chaos coming to the checkout this Christmas?
Retailers need to post instructions at checkouts for customers using EMV cards for the first time. That was my conclusion after going to a Target to shop this weekend and watching customers struggle with the proper way to pay for their purchases using the new cards. Watching a line of customers all taking extra time to work out the proper way to complete their purchases had me wondering what it would mean for busy store checkouts during the Christmas selling season if using the new cards doesn’t become second nature for shoppers.
Walmart payments executive John Drechny has considered the same thing. According to reports, Mr. Drechny has warned of "anarchy" this holiday season at other retail stores as the time at checkouts is expanded because of the cards.
Speaking at a panel discussion at the Money 20/20 conference, Mr. Drechny said Walmart began working on the problem about a year ago. In that time, Walmart has figured out how to cut the time using the new cards at checkout from 12 seconds to a second. Most other retailers, he said, are now at the place where Walmart was a year ago.
[Editor’s note: While not timing transactions, my observation is it took longer than 12 seconds for customers to figure out the proper way to use the EMV cards during my shopping trip last weekend.]
Photo: RetailWire
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Cathy Hotka
Principal, Cathy Hotka & Associates
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Discussion Questions
Do you share John Drechny’s concern about the impact new EMV cards will have on store checkouts this holiday season? What will retailers need to do to minimize the disruptions caused by consumers learning to use the new cards properly?
Poll
It’s going to be an issue, for sure, in part because adoption is so uneven. When I see a chip reader, I always try to use it, and more than half the time the cashier waves me off with “that doesn’t work yet.” The issue is twofold — it takes a lot of time for consumers to figure out if they’re supposed to swipe or dip, and then when retailers graft the chip process onto their existing payment process, it takes longer than if they’d designed the process around chip to begin with. When I can “dip,” often I find it won’t let me until the cashier has tendered, instead of being able to get that part of the transaction done while she’s still ringing things up as I can with a swipe.
But I think the bigger question will be, will retailers staff up to handle this confusion, or will they just make consumers wait? That’s a dangerous strategy too, as it may well drive consumers to buying more online — and not from the retailer whose line they are waiting around in.
I find it scary that this is actually an issue! My Walmart (and I’m guessing they are all the same) has a screen that tells you to insert the card or swipe. When you insert, it tells you to leave the card in the machine, then it tells you when it is done processing and to remove your card. Even the stupidest shopper is going to get this after one time.
The issue is made more complicated in that not all stores will have the new EMV readers. This means that in some stores the transaction will involve swiping the card as customers in the U.S. have been doing for many years and in others inserting it into the new readers.
Customer communication is the key for those stores that have made the switch to the new EMV readers. These stores can place information regarding how to use the new readers in their ads, on their websites and in the checkout areas. While I am certain not everyone will read, at least some of their shoppers will.
As I said in an earlier RetailWire discussion on EMV, the card companies should have provided instruction on how to use the cards when they were issued.
This is Y2K stuff all over again. The learning curve is pretty fast for consumers and as George suggests it’s already starting. Anecdotally, I’ve been traveling most of the last two weeks and have seen no issues at airport shops, restaurants or elsewhere.
In terms of what retailers can do to help, not to be insensitive or stereotype consumers but there are certain demographics that could have more of a challenge with the new technology. Hiring people in similar demographics, training them and letting them assist their peers is the best way to address the issue.
Is this Y2K all over again? Nope. Some may predict that the sky is falling, but consumers will have plenty of time before the holiday shopping season to learn how to insert their chip cards into readers. Retailers need to train their checkout teams to be patient and quickly explain how to use the new cards. Some, like Costco, simply take the card from the consumer and do it for them.
I do. The technology, while apparently easy and more secure, is not intuitive, e.g., insert and keep in place versus the swipe and go. If a pin is required the touch pad is not very easy to access thus not customer friendly. We know that the longer customers stay in the store the more they buy. Conversely, the quicker they can check out the quicker they will come back.
Now is the time to begin educating customers. How? Post instructions throughout the checkout process. Provide instructions on the retailer’s mobile app and website. Have personnel available at dummy kiosks to demonstrate the process.
If because of this retailers expect checkouts to take longer until consumers get used to the new process, how about they put on more checkers?
As an aside, I just returned from Panama on business. Chase has not yet issued my ATM card with a chip, though they have with my credit cards. I needed some cash and had to go to five ATM machines to find one that would accept an ATM card without a chip. (Of course, that one had the highest charge.) I was in Panama last March and did not have this problem. Apparently other countries are reacting faster to Americans having cards with chips than some retailers and U.S. banks are.
In my opinion, the new EMV technology may be safer BUT it definitely is not as seamless or speedy as swiping, even after learning how to use the new cards.
In my experience 1) the slot is harder to find and dip than the swipe — perhaps a true dip atop the checkout station would be better? 2) Insertion time is later in the checkout process than swiping and that’s confusing. 3) Unlike swiping the EMV card must be left in the slot and customers can forget their card in reader easier than with a swipe — so some percentage of shoppers will forget and have to turn back to retrieve the card. 4) even if card is remembered, the customer still has to wait at checkout point to put their card back in their wallet, slowing the next transaction and of course 5) some merchants may not yet have adapted so there may still be minor confusion this year.
Will it be anarchy and chaos — perhaps not BUT it will lengthen checkout times and that will lead to frustration, especially at the holidays. So I sure hope Walmart adds more cashiers even with their early adaption and training. And in my opinion, the EMV will add time to checkout even after customers have become familiar, simply because of some of the points noted above. Do i feel safer? Yes. But am I happy with how the cards work? NO.
As a point of comparison — how do ATMs that have customer insert and pull out their ATM cards compared with older models where the ATM card is sucked into the slot and not returned until after the transaction is completed? Which do you prefer? Which type of ATM machine have you left your card in after you’ve completed your transaction and initially walked away? Which type of ATM do you feel more comfortable using? I see the EMV cards as a similar type of interaction. And I hope they ultimately update the readers so you can dip and keep your card rather than having to leave it in the reader.
I will just speak from personal experience. I have already walked out of two stores in the last two weeks because of the length of the checkout line, One of those was Walmart.
The number one solution at this point is to make sure you have enough checkers. If it had looked like the store was trying to accommodate customers by having more lines open I would have waited.
Each time I transact, I ask the cashier/salesperson/associate about their POS functionality. Currently, there is a broad range of experiences. POS functionality isn’t top of mind for most shoppers. Most just want to complete the transaction, get out and onto the next thing. I think smart stores will minimize the confusion by minimizing changes at POS. Be prepared to accommodate the outliers: early adopters, tech geeks and risk averse shoppers. Key will be how front-liners are educated and trained to resolve the confusion.
Be sure to motivate those holiday temps to be patient, kind and helpful.
And as we like to say, “retail ain’t for sissies!”
I had dinner last evening with a bunch of retail IT leaders who were incensed that the EMV deadline — and shipments of chip cards — was happening in October, so close to Christmas. Retailers will have to train associates and customers alike to use the new cards. There’s no question that a lot of retailers will see longer lines as we get closer to the holidays.
I have to shake my head at the naivety of the comments along the lines that this will be seamless because “even the stupidest shopper is going to get this after one time.” (My response would be that there is still that one time, and there are a lot of stupid people out there.) This really has little to do with the intelligence or tech savviness of people. It’s a simple — and inescapable — fact that it takes people time to change ingrained habits, requiring the change of everyone at (nearly) the same time, the busyness of the Xmas season, and the fact that many aren’t even aware of it will all exacerbate the problem. Not to mention that the process is inherently slower and more prone to people leaving their card behind. The saving grace, I suppose, will be that many retailers won’t have the new readers installed until next year.
What a gigantic waste of time for a decade old technology designed for added security for the shopper and retailer but implemented in a manner (no pin) that is inherently not really secure at all and being turned on at the worse possible time of year. Well done all around. Amazon will be laughing all the way to the bank.
I have an acquaintance who works at Trader Joe’s, and their store just rolled out the new chip readers. I have heard nothing but complaints from the employees there about how the new process is slowing down the checkout line. Either because the consumers are confused about how it works, or because the technology is not up to snuff. I suppose there’s always a learning curve around a new process, but hopefully they can work out their issues so it is more efficient.
Opening more registers will increase labor costs and that’s even if you have any idle registers available during peak periods to open. Customers may ditch their carts instead of standing in line and then choose to go online. This may increase your labor by having pay sales associates to return the merchandise back into inventory, on top of losing sales.
The credit card companies should have done a better job of educating consumers by running commercials on television and online showing customers how to use the new EMV cards and the benefits. They also could have provided retailers with instructional DVDs that could be played at the checkouts or kiosks located in the store. What I’ve experienced so far is that customers have many questions at the checkout, such as “How is this any safer?”, “Can’t I just swipe it?”, “Which end goes goes in?”, “Which side goes up?”, “Where does it go in the machine” and “Why does it take so long?”
The other problem I’ve experienced is when a customer removes the card prior to the retailer receiving approval on a purchase, but the customers card issuer has already captured the sale (on the retailer’s end, the transaction is incomplete, but on the customer’s end, it appears as a pending transaction). The customer must reinsert the card so that the transaction can be completed, which doesn’t seem to be a problem, but if the customer doesn’t have enough funds available to cover both the first pending charge and the second charge…DECLINED. If it does go through and the customer checks their account later they will see two transactions pending for the same amount and you will receive a caller visit from them accusing you of charging them twice. Their card issuer will remove the first pending transaction in a couple of days, but you can’t do anything about it.
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It’s going to be an issue, for sure, in part because adoption is so uneven. When I see a chip reader, I always try to use it, and more than half the time the cashier waves me off with “that doesn’t work yet.” The issue is twofold — it takes a lot of time for consumers to figure out if they’re supposed to swipe or dip, and then when retailers graft the chip process onto their existing payment process, it takes longer than if they’d designed the process around chip to begin with. When I can “dip,” often I find it won’t let me until the cashier has tendered, instead of being able to get that part of the transaction done while she’s still ringing things up as I can with a swipe.
But I think the bigger question will be, will retailers staff up to handle this confusion, or will they just make consumers wait? That’s a dangerous strategy too, as it may well drive consumers to buying more online — and not from the retailer whose line they are waiting around in.
I find it scary that this is actually an issue! My Walmart (and I’m guessing they are all the same) has a screen that tells you to insert the card or swipe. When you insert, it tells you to leave the card in the machine, then it tells you when it is done processing and to remove your card. Even the stupidest shopper is going to get this after one time.
The issue is made more complicated in that not all stores will have the new EMV readers. This means that in some stores the transaction will involve swiping the card as customers in the U.S. have been doing for many years and in others inserting it into the new readers.
Customer communication is the key for those stores that have made the switch to the new EMV readers. These stores can place information regarding how to use the new readers in their ads, on their websites and in the checkout areas. While I am certain not everyone will read, at least some of their shoppers will.
As I said in an earlier RetailWire discussion on EMV, the card companies should have provided instruction on how to use the cards when they were issued.
This is Y2K stuff all over again. The learning curve is pretty fast for consumers and as George suggests it’s already starting. Anecdotally, I’ve been traveling most of the last two weeks and have seen no issues at airport shops, restaurants or elsewhere.
In terms of what retailers can do to help, not to be insensitive or stereotype consumers but there are certain demographics that could have more of a challenge with the new technology. Hiring people in similar demographics, training them and letting them assist their peers is the best way to address the issue.
Is this Y2K all over again? Nope. Some may predict that the sky is falling, but consumers will have plenty of time before the holiday shopping season to learn how to insert their chip cards into readers. Retailers need to train their checkout teams to be patient and quickly explain how to use the new cards. Some, like Costco, simply take the card from the consumer and do it for them.
I do. The technology, while apparently easy and more secure, is not intuitive, e.g., insert and keep in place versus the swipe and go. If a pin is required the touch pad is not very easy to access thus not customer friendly. We know that the longer customers stay in the store the more they buy. Conversely, the quicker they can check out the quicker they will come back.
Now is the time to begin educating customers. How? Post instructions throughout the checkout process. Provide instructions on the retailer’s mobile app and website. Have personnel available at dummy kiosks to demonstrate the process.
If because of this retailers expect checkouts to take longer until consumers get used to the new process, how about they put on more checkers?
As an aside, I just returned from Panama on business. Chase has not yet issued my ATM card with a chip, though they have with my credit cards. I needed some cash and had to go to five ATM machines to find one that would accept an ATM card without a chip. (Of course, that one had the highest charge.) I was in Panama last March and did not have this problem. Apparently other countries are reacting faster to Americans having cards with chips than some retailers and U.S. banks are.
In my opinion, the new EMV technology may be safer BUT it definitely is not as seamless or speedy as swiping, even after learning how to use the new cards.
In my experience 1) the slot is harder to find and dip than the swipe — perhaps a true dip atop the checkout station would be better? 2) Insertion time is later in the checkout process than swiping and that’s confusing. 3) Unlike swiping the EMV card must be left in the slot and customers can forget their card in reader easier than with a swipe — so some percentage of shoppers will forget and have to turn back to retrieve the card. 4) even if card is remembered, the customer still has to wait at checkout point to put their card back in their wallet, slowing the next transaction and of course 5) some merchants may not yet have adapted so there may still be minor confusion this year.
Will it be anarchy and chaos — perhaps not BUT it will lengthen checkout times and that will lead to frustration, especially at the holidays. So I sure hope Walmart adds more cashiers even with their early adaption and training. And in my opinion, the EMV will add time to checkout even after customers have become familiar, simply because of some of the points noted above. Do i feel safer? Yes. But am I happy with how the cards work? NO.
As a point of comparison — how do ATMs that have customer insert and pull out their ATM cards compared with older models where the ATM card is sucked into the slot and not returned until after the transaction is completed? Which do you prefer? Which type of ATM machine have you left your card in after you’ve completed your transaction and initially walked away? Which type of ATM do you feel more comfortable using? I see the EMV cards as a similar type of interaction. And I hope they ultimately update the readers so you can dip and keep your card rather than having to leave it in the reader.
I will just speak from personal experience. I have already walked out of two stores in the last two weeks because of the length of the checkout line, One of those was Walmart.
The number one solution at this point is to make sure you have enough checkers. If it had looked like the store was trying to accommodate customers by having more lines open I would have waited.
Each time I transact, I ask the cashier/salesperson/associate about their POS functionality. Currently, there is a broad range of experiences. POS functionality isn’t top of mind for most shoppers. Most just want to complete the transaction, get out and onto the next thing. I think smart stores will minimize the confusion by minimizing changes at POS. Be prepared to accommodate the outliers: early adopters, tech geeks and risk averse shoppers. Key will be how front-liners are educated and trained to resolve the confusion.
Be sure to motivate those holiday temps to be patient, kind and helpful.
And as we like to say, “retail ain’t for sissies!”
I had dinner last evening with a bunch of retail IT leaders who were incensed that the EMV deadline — and shipments of chip cards — was happening in October, so close to Christmas. Retailers will have to train associates and customers alike to use the new cards. There’s no question that a lot of retailers will see longer lines as we get closer to the holidays.
I have to shake my head at the naivety of the comments along the lines that this will be seamless because “even the stupidest shopper is going to get this after one time.” (My response would be that there is still that one time, and there are a lot of stupid people out there.) This really has little to do with the intelligence or tech savviness of people. It’s a simple — and inescapable — fact that it takes people time to change ingrained habits, requiring the change of everyone at (nearly) the same time, the busyness of the Xmas season, and the fact that many aren’t even aware of it will all exacerbate the problem. Not to mention that the process is inherently slower and more prone to people leaving their card behind. The saving grace, I suppose, will be that many retailers won’t have the new readers installed until next year.
What a gigantic waste of time for a decade old technology designed for added security for the shopper and retailer but implemented in a manner (no pin) that is inherently not really secure at all and being turned on at the worse possible time of year. Well done all around. Amazon will be laughing all the way to the bank.
I have an acquaintance who works at Trader Joe’s, and their store just rolled out the new chip readers. I have heard nothing but complaints from the employees there about how the new process is slowing down the checkout line. Either because the consumers are confused about how it works, or because the technology is not up to snuff. I suppose there’s always a learning curve around a new process, but hopefully they can work out their issues so it is more efficient.
Opening more registers will increase labor costs and that’s even if you have any idle registers available during peak periods to open. Customers may ditch their carts instead of standing in line and then choose to go online. This may increase your labor by having pay sales associates to return the merchandise back into inventory, on top of losing sales.
The credit card companies should have done a better job of educating consumers by running commercials on television and online showing customers how to use the new EMV cards and the benefits. They also could have provided retailers with instructional DVDs that could be played at the checkouts or kiosks located in the store. What I’ve experienced so far is that customers have many questions at the checkout, such as “How is this any safer?”, “Can’t I just swipe it?”, “Which end goes goes in?”, “Which side goes up?”, “Where does it go in the machine” and “Why does it take so long?”
The other problem I’ve experienced is when a customer removes the card prior to the retailer receiving approval on a purchase, but the customers card issuer has already captured the sale (on the retailer’s end, the transaction is incomplete, but on the customer’s end, it appears as a pending transaction). The customer must reinsert the card so that the transaction can be completed, which doesn’t seem to be a problem, but if the customer doesn’t have enough funds available to cover both the first pending charge and the second charge…DECLINED. If it does go through and the customer checks their account later they will see two transactions pending for the same amount and you will receive a caller visit from them accusing you of charging them twice. Their card issuer will remove the first pending transaction in a couple of days, but you can’t do anything about it.