Pressure is mounting for restaurants to improve security measures…
With the high cost of identity theft reaching $56 billion annually, the odds of it happening at a restaurant are high. California Pizza Kitchen and El Pollo Loco are only a few examples of dozens of restaurants named in a class action lawsuit for violating federal law requiring retailers to remove identifying numbers from their receipts. In our post titled, “The Greatest Risk for Credit Card Theft,” we outlined the problem of theft in the restaurant industry. With that in mind, restaurants are under mounting pressure to find solutions.
Consumers are expected to spend $537 billion at the nation’s 935,000 restaurants in 2007. Ruby Tuesday is a great example of the growing usage of credit cards– with a jump from 45% to 57% of their sales paid with plastic. Ruby Tuesday is also the first national chain restaurant to offer a credit card processing system that leaves no credit card information at the restaurant. Their system encrypts data before it’s sent directly to the bank– meaning your credit card number and personal information are safe once your card is processed.
Other security measures are in the works as well. Smaller chains are currently testing handheld devices which allow consumers to pay at the table so their credit card never leaves their sight. This eliminates concerns about skimmers– devices that can lift information off the magnetic strips on the backs of credit cards.
“The restaurant industry is the only industry where you give somebody your credit card, and they walk away with it,” says Ken Chaisson, vice president of information technology. As a result, the major credit card issuers have been pushing all retailers, including restaurants, to install safer systems by July 2007.