SCHENECTADY, N.Y. -- Price Chopper here plans to begin a test next week in two to three stores of a new point-of-sale receipt printer's ability to process check payments electronically, including capturing a digital image of the check for fraud-prevention purposes.
The chain finished installing the receipt printer, model TM-H6000II, from Epson America, Long Beach, Calif., in all of its 102 stores last month. The units are being used initially for printing only. Epson says Price Chopper is the first user of the device and would be one of the first supermarket chains to capture images of checks at the point of sale.
The dual-function device offers two-color receipt printing as well as the ability to handle electronic check conversion, processing a paper check electronically and returning the check to the consumer on the spot. It is fully integrated into Price Chopper's POS system. Epson says it's the first device to incorporate both features.
Price Chopper, which has been working on electronic check conversion for a few years, "expects to fully roll out" the process, said Mona Golub, the chain's manager of public relations and consumer services.
Golub said that electronic check conversion is expected to reduce Price Chopper's check-handling costs, though she declined to be specific, and will "save consumers bank expenses as well." The imaging capability gives Price Chopper a record of check information -- stored by a third party -- in the event that a check is returned, helping with the collection process, she said.
Price Chopper will retain a three-day "float" on check transactions as a customer service, though the system allows immediate transmission of transaction data, she added.
Capturing an image of a check is "not required" to process it electronically but is a "significant point of interest" to retailers as a fraud-prevention strategy, said Michael Herd, director of public relations for NACHA, the bank industry-supported electronic payments association based in Herndon, Va. The association oversees the automated clearinghouse network that processes electronic checks. Herd said that NACHA predicts 200 million checks will be cleared electronically this year, or 2.5% of all checks at retail, compared to 1% processed electronically last year. "We've seen transaction volume for electronic checks double for the last several years," he said.
In addition to reducing handling costs, electronic check conversion offers retailers notice of returned checks as much as a week faster than in the conventional manual process, he said. He did not have figures on the percentage of retailers capturing check images.
Epson says the printer costs $1,498 per unit, not including infrastructure and servers to store images.
Companies that handle the processing of electronic check conversion include TeleCheck Services, Houston; Certegy, Alpharetta, Ga.; and BankServ, San Francisco.
The Federal Reserve recently issued a consumer affairs pamphlet on electronic check conversion that can be accessed at www.federalreserve.gov/pubs/checkconv/default.htm.
