The Great Chip Card Debacle

Protecting your identity is important and credit card issuers appear to be taking this seriously, dare I say enthusiastically. In the past several months I have received chip cards to replace my bank ATM card, and all of my various credit cards, including store cards like the Target Red Card. I ordered a card for Kelly to have as a backup, and not only did they send her a chip card, they sent me one, too, even though I already had one.

The idea behind the chip card is that the chip built into the card generates a unique security code each time you use it to make purchases in a store. This prevents the card from being used even if the number is stolen, because it still needs that unique security code for the transaction to go through. This is a good plan. It is similar to the notion of RSA tokens used in multi-factor authentication.

I have only one complaint about the chip card so far: it almost never works.

Each store I go into has been updated with new card reader machines. You can slide your card the old-fashioned way, or slip them into the slot at the base of the reader, chip-first, to ensure a secure transaction. Every time I motion to slip my card into that slot, the cashier waves me off, “Sorry, that isn’t working. You have to slide it.”

It happened several times at Rite-Aid. Then I noticed it happen at other places. So I began keeping a list. Although these stores appear to be equipped to handle the chip cards, I have been waved off multiple times at Hair Cuttery, and Sports Clips. I tried to use the chip reader at Subway on Saturday, and was told that it doesn’t work. My local Safeway has not yet implemented the chip reader so I don’t have to worry about being waved off there.

Target is the only retailer where my chip card works on a consistent basis. It adds a few seconds to the checkout, but so does my attempt to use a chip card at places where the machinery still doesn’t work.

None of these retailers have put up signs by the register warning customers that their chip reader is malfunctioning. Wouldn’t it save everyone time and frustration if there was a sign that instructed you to slide your card? Nothing fancy, just tape a piece of paper over the chip slot with the word NOPE printed on it.

Of course, it would also save time and frustration if the chip readers worked in the first place.

Even when they do, they don’t. When I first got my chip card and used it at Rite-Aid, the machine told me I needed to slide my card instead. I slid my card. There was a pause. The machine said, “Please insert your chip card into he slot.” I did this. I was asked for my PIN, which I dutifully entered. A moment later, the machine indicated that I needed to slide my card instead. I recognize an infinite loop when I see one. I took my card and ran, leaving behind a baffled cashier.

Next time I came in she told me that the chip reader wasn’t working. It hasn’t worked since.

Today, all of my bank and credit cards have been replaced chip cards, and the stores I shop in have new card readers. However, as stores can’t seem to get the machines to work, the result of what must have been a monumental effort is that my level of transaction security is exactly what it was before the new cards were issued.


  1. Hi Jamie,

    Very interesting. We (in the Netherlands)have been doing this for a number of years. Now we have even moved on just having your card touching the machine, no PIN number, and voila. 25 Euro max per day I believe. How do you see the development of paying with your phone?

  2. Could not agree more! All my cards have been replaced with chip cards, and yet it’s rare to find a merchant that actually accepts them. They all seem to have the proper readers now, but none of them work. It’s crazy. I can’t imagine the money that has been spent (ie. wasted) so far to replace all these cards, and for merchants to buy new readers. And yet we implemented chip & signature (vs. chip & pin) which is no more secure than just swiping the card. I’ve actually been trying to use Android Pay wherever I can, and surprisingly it’s accepted almost everywhere I try it. Not to mention it’s more secure, IMHO, because it presents a virtual card number to the merchant rather than your actual credit card number. So if there is a data breach, nobody gets your real card number.


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