Last week, I did some shopping at a local CVS Pharmacy before Christmas. As I checked out, I inserted my chip-enabled credit card into the chip reader on the credit card machine. To my surprise, a message popped up that read “Mag Swipe Required.”
I looked at the cashier. “Why can’t I use the card reader?” I said.
“Oh, they took it off for the holidays,” he said. “It was taking too long.”
He went on to explain that when the store was using the chip card readers, the lines of customers had gotten too lengthy. Then he said, “We should probably get that turned back on soon.”
And the store probably should, since disabling chip card readers in retail stores makes them liable for any fraud that occurs as a result of card swipes there—a change that went into effect on October 1.
“CVS would be liable in this case,” says Matt Schulz of CreditCards.com. “It’s not just about having the equipment, it’s about having it deployed and operational.”
But Schulz wasn’t surprised that CVS would choose to disable their EMV card readers. “Many retailers are willing to risk taking on extra liability in order to spare themselves and their customers the headache of dealing with the new chip cards during the holidays,” he says.