Rat Racing and Lean Thinking

The recent post about my credit card issues has created quite a conversation.

One of the main themes being commented on is whether or not we, in America where we don’t have the chip like they do in the UK, should have to show an ID when using a credit card.

I say we should show ID. Others say it will be an inconvenience and we shouldn’t have to show an ID. Others say we should improve the technology behind the system to error proof it, so to speak. I quite like the chip idea but since we don’t have it today we need to try something else.

The main reason, I’m assuming, people don’t want to have to show an ID when using a credit card is the inconvenience. I’ll admit, my license is pretty hard to get out of my wallet and definitely takes a few seconds.

So, the opponents of the “show your ID” philosophy are basically saying they are willing to take the risk of identity theft. They are willing to trade a few seconds of inconvenience each time they use a credit card for the possibility of having to spend hours changing automatic bill payments, deal with their credit card fraud department, etc.

I wonder if this “it’s an inconvenience” philosophy is much different than the philosophy of not wanting to stop a production line when a defect is found? You know what I mean… quantity over quality.

I also wonder if the people not wanting to show an ID are the same people grumbling through security at the airport (which is far from an excellent process but I digress).

I also wonder if we, especially in America, are so caught up in the rat race of our lives that we are “too busy” to pull out our ID in order to help prevent identity theft?

And if so, could this be one of the reasons so many American companies seem to struggle with the adoption of the “go slow to go fast” mentality of lean thinking?

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Graham
August 20, 2008 - 8:38 am
Reply

I think you may be onto to something. However, I think the best solution is to fix the problem with the chip system similar to the one used in the UK. That would be the best long term solution in my opinion.
Marty Y.
August 20, 2008 - 8:41 am
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Ron,

I believe that showing an ID is a Non-Value-Added task, and we should do whatever we can to eliminate it if possible.

Even if we decided that showing an ID might help reduce our risk, you would need to change the behavior of thousands of point-of-sale checkout employees, and this would be too costly and ineffective. Plus, there are many transactions now such as gas stations, internet, and vending machines that do not have a person there to check ID. I would rather come up with a fix that works on all transactions, and does not slow us down.

I currently focus on several ways to prevent problems:
1. I only use my credit card for transactions. NEVER Debit cards. If problems occur, credit cards are much easier to fix and/or cancel.
2. I only have two credit cards in my wallet and I use a display similar to a Kanban. If one is missing, I know it right away. I don’t search through the pockets to find them; when I open my wallet they are right there.
3. I have my computer automatically download all of my credit card transactions into Quicken on a daily basis. I know if fradulent or bad transactions occur within a day or so and can work to correct immediately. This is just like stopping the production line.
4. I have setup my account to automatically text my phone if transactions above certain thresholds are completed. Again, I can work to limit the problems right away like stopping the production line.

So, I am one of those who wants it done quickly and efficiently at the beginning, and I am willing to take the risk of problems. However, I have minimized this risk so much that I have whenever I have had problems in the past, I have easily and quickly repaired them.

I don’t believe that any of the problems that I have had would have been corrected by showing ID.
Ron Pereira
August 20, 2008 - 9:20 am
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Excellent, and well thought out plan, Marty. I’m on board!
Jason
August 20, 2008 - 2:07 pm
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I’m with Marty (and take many of the same steps).

Another key point is to differentiate between identity theft and credit card theft. There is a very, very large difference between the two, and I think some confusion.

Identity theft is one someone usurps your identity, including your SSN, address, driver’s license number, etc., and uses those to open new lines of credit in your (their) name. They then use these new lines of credit and cause a massive headache for you to fix. Checking ID at the store does not prevent this.

Credit card theft (which it seems you experienced), is when someone fraudulently gets hold of 1 of your credit card numbers or physical cards and uses it for nefarious purposes. The long term effects of this are pretty minimal – cancel the card and get a new one. It’s slightly more complicated if that was a debit card, as they need to cancel the card and then you have to fight for any money that was removed from your account.

Asking for ID at the store won’t prevent identity theft. It will, marginally, make it more difficult for fraudsters who have already stolen your identity to use the cards, but given the other options, like online purchases, gas stations, etc., it won’t solve the problem.
Ron Pereira
August 20, 2008 - 3:05 pm
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Yeah, you know… when I bought my lunch today I used my credit card. The cashier just swiped it and I went about my business. Then I realized how impractical it would be for her (Jason, you know how busy our normal place of eating is) to ask for ID with everyone in the line.

Plus, as you say, anyone can go to the gas pump and use a credit card.

You guys are starting to convince me… I’m just pi$$ed because I’ve been ripped off twice in the last 3 months!!

I know… maybe the rule should be any purchase over $100 with a credit card should require proof of ID… in Walmart only!! Ha!

Thanks for the great comments everyone. It’s actually very therapeutic for me to gripe a little and then be brought back to reality by all of you from time to time!
Panu Kinnari
August 21, 2008 - 12:59 am
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Here in Finland limit to check ID is 50€. But cards with chips and machines that can use them are starting to be norm, entering PIN will take care of signature and showing ID in the future.

I too had my credit card information stolen couple months ago, started wondering when there were 2 gasoline purchases in US on my statement. And I have never been in US. I doubt that this would’ve been prevented by me showing ID more than I already do.
Brian Campbell
August 25, 2008 - 12:28 pm
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My Bank of America VISA card has my photo on it (a small passport photo). So the card has picture ID built in! Every cashier immediately sees that I am the only person who should be using the card.
Bret Gordon
September 2, 2008 - 9:42 am
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I used to work for a credit card processor and was surprised to learn that a merchant cannot accept or reject a credit transaction based on whether the consumer shows ID or not. In some cases, a merchant may even be fined by the credit card company if they ask for additional ID and are reported. (see http://www.privacyrights.org/fs/fs15-mt.htm). Somehow, asking for ID has become commonplace among retailers as they do not realize that the only way to verify a cardholder at the point of sale should be by his/her signature.