Connect with us

Headlines

Fraud Helping Kill Pay-by-Check in Stores

Target’s move to stop accepting such payments likely to spread, says business professor.

mm

Published

on

PHOTO: ISTOCKPHOTO

Target recently decided to stop accepting personal checks, citing the low volume of payments being made that way. And while that’s definitely the case, business school professor Jay Zagorsky, writing on The Conversation.com, argues that fraud is another major reason retailers are shying away from taking checks.

“Given that checks are still being used — albeit less often than before — why are businesses like Target, Whole Foods and Aldi refusing them?,” asks Zagorsky, an Associate Professor of Markets, Public Policy and Law at Boston University. “I think an important part of the story is that check fraud is becoming rampant in the U.S.”

As evidence of that, he points to statistics from The U.S. Treasury Financial Crimes Enforcement Network, which show that the number of check fraud cases has exploded since 2020, nearly doubling from 2021 to 2022. (At the same time, the Federal Reserve is now processing 80% fewer checks than it did in the early 2000s.)

One of the biggest sources of check fraud involve those written at the cash register, Zagorsky says. As the Atlanta Fed points out, “Anyone with graphics software and a high-quality printer can readily turn out counterfeit checks,” he notes.

Merchants are hit with a double whammy when check fraud occurs, Zagorsky writes.

“First, they lose the merchandise, which cannot be sold to a legitimate customer. Then, unlike shoplifting, the store is faced with more financial pain because most banks charge both the merchant and the check writer when a counterfeit check is presented. Both sides are charged because the Federal Reserve charges high fees for returning uncollectable checks.”

Advertisement

Zagorsky believes the increase in check fraud means other retailers will likely follow Target’s lead. “I expect in the future only stores like Costco, which photograph every member and has every customer’s address on file, will allow checks,” he notes.

Click here to see Zagorsky’s full article.

Advertisement

FEATURED VIDEO

Sponsored by Cogent Solutions Group

Reduce Your Pet’s Hip & Joint Discomfort with the Most Researched Hyaluronan on the Market

Nearly 60% of dogs and 90% of cats suffer from joint discomfort. Trixsyn joint supplement contains a patented and proven hyaluronic acid molecule for maximum efficacy to promote joint, bone, soft tissue, and cartilage health, keeping your pet feeling comfortable, for longer. Trixsyn is veterinarian recommended, safe and all-natural, and contains research-proven ingredients. Get your paws on the most-researched hyaluronic acid on the market. Learn more at Trixsyn.com.

Promoted Headlines

Most Popular