WINN-DIXIE PILOTS TRUE ID SYSTEM

JACKSONVILLE, Fla. -- Winn-Dixie Stores here is piloting an identity verification system to stanch losses due to check-cashing fraud.The True ID solution from Identico Systems, Nashua, N.H., is being tested at three undisclosed sites, according to Larry Gilbert, president and chief executive officer of Identico. Officials at Winn-Dixie could not be reached for comment.According to the Food Marketing

JACKSONVILLE, Fla. -- Winn-Dixie Stores here is piloting an identity verification system to stanch losses due to check-cashing fraud.

The True ID solution from Identico Systems, Nashua, N.H., is being tested at three undisclosed sites, according to Larry Gilbert, president and chief executive officer of Identico. Officials at Winn-Dixie could not be reached for comment.

According to the Food Marketing Institute, Washington, supermarkets in the United States lose close to $90 million a year to fraudulent personal, commercial and payroll checks. The True ID system works by literally "putting a face" on every transaction, Gilbert explained. With the customer's permission, the photo and information from a valid ID is electronically collected and stored at the point of sale. The image is digitally scanned by a device mounted on each register. The next time that customer initiates a transaction, the scanned photo automatically appears on the reader when the identification number is keyed in.

Disclosure notices are prominently displayed throughout the store to let customers know that True ID is being used, Gilbert said.

Brown & Cole Stores, a 35-store chain based in Bellingham, Wash., began piloting True ID in two stores last June, Ken Barnes, loss prevention manager for the chain, told SN. The system is now installed at 22 Brown & Cole locations.

"We have it in all of our stores that cash payroll checks," Barnes said.

Barnes has witnessed a 90% reduction in losses due to payroll-check fraud with True ID. During the 12 weeks prior to installation at the test store in Everett, Wash., 19 fraudulent payroll checks were cashed. No arrests were made. During the 12 weeks after installation, three fraudulent checks were cashed. Two of the perpetrators were arrested and successfully prosecuted.

According to Barnes, the time frame on the return of investment for an individual store varies from two weeks to six months. The chain pays a leasing fee of $99 per month to Identico. After three years, the equipment will belong to Brown & Cole, he said. In addition, stores pay a monthly fee, calculated by volume, for database maintenance.

For now, the system is only used for cashing payroll and government checks, or if a store cashes a personal check, Barnes said. However, he is considering using True ID for all check transactions.

"It has fantastic potential," he said.

Industry observers have questioned the public's willingness to waive their privacy rights in line at the supermarket. However, Barnes said he has not had a single complaint.

The True ID system can be found in over 100 stores at 18 chains throughout the United States.