Why Black Friday Could Prove to Be a Nightmare this Year

With Thanksgiving around the corner, I’m sure you are all geared up for Black Friday too. One word of caution though – up until now, you only had to deal with lines that led to the entrance of your favorite store. Now however, you may have to wait in long lines to check out as well!

Why? Well, it’s all thanks to the new technology that came into effect last month. On October 1 of this year, credit card companies started rolling out secured cards that use chips instead of magnetic stripes. Thus, instead of swiping the card through the magnetic strip reader, shoppers now have to insert it (chip side up) into a slot on the bottom of the device, and leave it there for several seconds in order to process the transaction. Moreover, using an EMV card adds on average ten seconds to the transaction time.

The motive for the change is sound – these new cards will undoubtedly offer enhanced security and data protection to cardholders. However, the timing of the introduction of these leaves much to be desired.

Certain stores, like Wal-Mart, installed new readers for chip cards early and became proficient with the technology over the past year. But many merchants are starting that transition only now, leaving customers baffled. People unfamiliar with the new process wind up swiping the card like they always have, resulting in failed payment attempts. These customers are then shown how to insert the new chip-enabled cards into the reading machine, which leads to considerable delays.

Overall, the switch to new checkout habits is a significant change for shoppers, and has put additional financial pressure on financial institutions. Many consumers don’t even know why the change is happening or how to use this new EMV chip, or ‘smart’ card. (EMV stands for Europay MasterCard Visa, the coalition that developed specifications for the system in the 1990s.)

Given that the number of shoppers on Black Friday is likely to be in the gazillions, and most of them will have been in line since the crack of dawn, even a small delay while processing payments may test their patience, leading to frustration and slower checkout lines. Add to this the fact that cards (both debit and credit) are the primary payment method for 76% of consumers in the U.S., and voila! You have a sure-fire recipe for disaster on Black Friday.

Nevertheless, there may be some respite for consumers. The rollout of the new technology has been sluggish, and many retailers are still not ready with new reading machines. Most Americans don’t even have the new cards yet, since banks and credit unions have been slow to replace the old ones. Those consumers who don’t have the new chip cards, or who shop at retailers that do not accept the new cards, might not be affected this holiday season.

For retailers, Black Friday, and the weekend following, is crucial to performance. According to the National Retail Federation, Americans thronged malls and stores and drove more than $50 billion in revenue to retailers after Thanksgiving in 2014. Given this huge scale of retail activity, it is unlikely that the average consumer won’t be affected by the new technology rollout this Black Friday, unless of course, he or she chooses to stay at home!