Garveen Goram was faced with a dilemma. He was on the verge of signing up with Hanco for an ATM. The deal was no payment for the first 150 transactions and after that the £1.50 transaction cost would give him 90p and Hanco 60p. However, up until now Garveen has been doing cashback through the till, charging
£1 for up to £50.
He wanted to know whether the new Chip and PIN system was fraud-proof. He had had a few chargebacks in the past, particularly through the florist shop that he runs alongside his c-store business. As anyone who has suffered chargebacks knows, these take forever to sort out.
A spokeswoman for APACS, the bank clearing service, says that if staff do all the checks then yes, he is covered. "And if he checks his arrangements with say, Barclays, there will be something in the contract that mentions cashback. There could be a rule that says the customer has to buy something in the shop. Just getting cashback is typically fraudulent behaviour. The bank may well ask questions. And if a customer complains about being charged for cashback to his bank then the bank will get in touch with the shopkeeper's bank, telling him he can no longer offer that service."
She made one more interesting point. "The average use of a free machine a day is 213 transactions. The average use of pay-for machines is just 18 a day."
Garveen believes he has a solution that keeps him in the banks' good books. He keeps boxes of matches on the counter and offers them to all customers requesting cashback. "So, they have made a purchase, even though some of them forget to take the matches."
Cashback is a service that people expect to get offered everywhere these days. I was in Marks & Sparks yesterday, buying the usual (underwear, since you ask) and was offered cashback.
Customers probably won't like paying for their own money but if you charged say, 50p, it would be £1 cheaper than some of the machines charge and regarded as a lot more reasonable.