Use Biometrics To Help Identify Check-Cashing Fraud

A grocery chain rolls out a biometric solution to reduce losses from bad checks and speed up checkcashing transactions.

While grocery stores are not necessarily in the banking business, many offer their customers the convenience of payroll check cashing, which in turn encourages customers to stay and shop. However, these same stores lose when customers use false IDs and pass worthless checks.

The BI-LO/Bruno's chain of 310 grocery stores operating throughout the southeastern United States discovered check cashing to be an expensive problem back in 2003. "The chain was experiencing frequent losses due to bogus or counterfeit payroll checks being passed in our stores," according to its Manager of Loss Prevention Services, Ray Kessler. "One of the major obstacles for us in preventing these incidents was our inability to prevent identity fraud."

Typically, to cash a check, a customer presented a valid government-issued form of ID, such as a driver's license, to a store clerk at the service desk. The clerk could cash the check, ask for additional ID if needed, or seek manager approval for the transaction. A manual system such as this made it easy for customers to use different IDs at different stores. In addition, BI-LO/Bruno's lacked the ability to look up a customer's check-cashing history or to easily flag bad checks.