Check-Out Lanes Go Check-less

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We’ve all been there – standing in line at a grocery store “15-items-or-less” checkout line, hands on hips, waiting for the clueless shopper to finish writing a $12.50 check for a quart of milk, two boxes of Ring-Dings and a box of laundry detergent.

Fortunately (or unfortunately, depending on which side of the checkbook you’re on), we won’t be waiting much longer, as more and more grocery chains opt of out of personal checks. Instead of asking “paper or plastic?” now stores are demanding “cash or plastic.”

That means the times are once again changing. It was only three years ago that Americans wrote 30 billion checks, according to the Federal Reserve. But check usage is in decline in 2009, while the use of debit cards, at 25 billion transactions in 2006 – a 17% rise from 2003.

Check fraud is a big issue, too. According to a study by the Association for Financial Professionals, checks were the leading payment method most frequently targeted by scam artists.

Another reason for the switch to cash or plastic? Both banks and retail chains encourage the use of debit cards because it’s easier and faster for them to track your purchases – and it’s easier for them to build a more accurate consumer profile with your name on it.

Whole Foods (Stock Quote: WFMI) is the latest grocery store giant to stop accepting personal checks. Grocery chains point to an increase in bounced checks and longer waits in line while people write out their check payments.

The Whole Foods initiative is just a two-state experiment right now (in Arizona and California – and only in three stores in total). The company says longer lines and the possibility of check fraud are the biggest single reasons for the check-less laboratory experiment.

Says Whole Food regional vice president Bill Jordan, "While our primary intention is to better speed people though the lines, check fraud is on the increase, and that unfortunately makes it more difficult for the remaining customers who prefer to pay this way. To help reduce fraud, we have a several step personal check approval process that can often inconvenience other customers in line.

“We're looking a solution that benefits every customer. Cash, debit cards and credit cards can be processed quickly and come with added protections that protect the interests of the consumer and the retailer, and are therefore our preferred forms of payment,” he added.

So far, big grocery chains like Safeway (Stock Quote: SWY) and Albertson’s are reluctant to follow suit. But Fresh & Easy Neighborhood Market, a California-based grocery chain, says it won’t accept personal checks at any of the company’s 70 California locations.

Critics say that banning personal checks is an inconvenience to older Americans, many of whom prefer the comfort level that checks afford them. Also, Americans with no credit card – and no bank accounts – would suffer, too. According to a recent FDIC study, an estimated 28 million people in the U.S. don't have bank accounts.

The move to bank checks doesn’t help both of those groups, but the handwriting is on the wall just the same. Increasingly, grocers will welcome you to their stores with open arms – just don’t bring your checkbook.

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