HARRIS TEETER TO TEST DEBIT CARDS IN 20 UNITS

CHRIS O'LEARY

CHARLOTTE, N.C. -- Harris Teeter here plans to test a debit-card acceptance system in 20 stores by the end of this year and is installing personal identification number pads to jump-start the program.

If successful, the debit card system will be rolled out to 141 of its stores, said Leigh Anne Overcash, manager of store systems for Harris Teeter here.

Harris Teeter, which previously did not accept debit cards, said it is responding to consumer requests for the cards, as well as trying to cut down on the use of credit, which has high transaction fees.

"Our competitors offer [debit], and it's less expensive than processing a check, from our standpoint," Overcash said. "And credit's expensive. We hope the customers will take the option of debit vs. credit from our standpoint."

Last September the chain piloted the Plus and Honor regional debit cards in stores in Athens and Atlanta, Ga., Overcash said. She said Harris Teeter was pleased with the pilot's results. In that test, debit transactions averaged $45 a purchase, slightly less than credit, she added.

To encourage consumers to use debit cards, Harris Teeter is equipping registers with C2000 Protege PIN pads, manufactured by the Scottsdale, Ariz.-based International Verifact. The pads reduce debit transaction time to less than eight seconds.

"Debit will go out of our stores via satellite, which connects us to our hub in Atlanta," Overcash said. The information is then sent to an authorization network in Florida, and relayed back to the store. "The transaction goes a

great deal of distance to get authorization and comes back in eight seconds or less," she added.

Credit cards, which the chain has accepted for two years, will be scanned through the same pads, Overcash said. Previously credit cards had been scanned through a card reader attached to the register keyboard. But since credit authorizations will still go through phone hookups, transaction time is much longer. Overcash expects Harris Teeter will advertise its acceptance of debit cards on highway billboards. "We have some billboards that let customers know we do accept credit, so we'd probably have a debit logo as well," she said.

Harris Teeter still must decide in what areas and in how many stores debit transactions will be introduced. Overcash said no sites had been chosen yet, though she estimated 20 stores will be on-line with the debit system by year's end.

"What we will do is put it in one area," she said. "We'll stay away from having it in one store in one town, and not having it in another store in the same town. We're trying to do an installation in a complete area location." Debit may eventually be rolled out chainwide.

As for eventually joining a national network like MasterCard-owned Maestro, she said, "Right now we have no plans, but our customers will probably dictate whether we do that or not." She said she is optimistic the debit card will be a major player.