BOISE, Idaho -- Albertson's here is adding an outside check-authorization service to its fraud-detection arsenal.
In addition to querying its own internal database to see if a customer has written a bad check, the system will enable Albertson's to access a check writer's history with other retailers.
The system will also perform a risk-management analysis to predict the probability that the check will be good based on certain criteria and history.
The move to on-line check authorization is crucial in the effort to reduce check fraud, according to industry sources. While it is important for each retailer to maintain an internal database of customers who have written bad checks, the customer is only added to the database after writing the bad check. By the time the check is returned from the bank and the database is updated, it is often too late to catch a thief who has written perhaps dozens of bad checks to various retailers over a short period of time.
"The negative database will inform the retailer if the customer currently has an outstanding debt and will inform the retailer if the check is most likely going to be good or not," according to a source familiar with the project.
Albertson's is currently rolling out the check-authorization program to all of its 2,400 stores, although no time frame for completion of the installation was given. The authorization will be done through Albertson's current point-of-sale system, according to the source.
"Basically, Albertson's will dial in through their point-of-sale terminal to check against the database before accepting a check," the source said. The test, which was conducted in about 55 stores over a 90-day period, was completed in the first quarter of this year.
"Albertson's believes in providing exceptional customer service," Albertson's spokeswoman Jenny Enochson stated. "We strive to be sensitive to the needs of our shoppers while also being sensitive to reducing the amount of fraudulent checks we receive. Utilizing this [system] will allow us to do both."
The agreement with TeleCheck, Houston, marks the first time Albertson's has used a national check-authorization program, according to the source.
Albertson's will also use the vendor's check-collection services. In addition, TeleCheck will also provide a help desk to field retailer and customer inquiries.