A credit card that won't let you shop at bad merchants

Here’s an idea for a way to bring reputation based shopping to the brick and mortar world.

You would get a new special credit card, Visa or Mastercard. In order to use it, you would be required to rate merchants with reputation scores. You would do this when getting your online credit card bill — a random set of the merchants you purchased from would be highlighted and you would have to put in ratings. You would not have to do all of them, nor more than a set number each month and could also beg off some months to avoid it being a burden. This produces a set of ratings which are not nearly as self-selected as most rating systems, and makes it harder for the merchants to deliberately inflate their own ratings or lower competitors, because they actually have to buy stuff and don’t always rate the purchases they choose. (The system could allow manually chosen ratings but would treat them differently.) If you chargeback, your rating would also get special examination.

However, that’s just step one. The real meat comes when you use the card. You could set thresholds, and if you made a purchase at a vendor with a very poor reputation, below your threshold, the card would decline your purchase. At that point, you would have several options:

  • Get the signal that the merchant is bad, and abandon the purchase
  • Call the 1-800 number on the back of the card on your cell phone. It would spot your caller-ID, and immediately the computer voice would tell you the reputation of the vendor — or tell you that you hit your credit limit. You could then command it to authorize the transaction.
  • Alternately, you could just have it automatically approve any second attempt at the transaction, and thus you could just say “run it again.” (Stores could know this and abuse it, however, so the call method makes more sense.)
  • More simply, if you still want to purchase, you could just pull out another card, and tell them to try that one.

This would work just as well in online shopping, through frankly browser plug-ins make more sense there. However, people don’t use them so this would still work well. In this case you could go to a web URL instead of call the number. And of course it would be nice if paypal also did this, but they don’t seem inclined.

I don’t know if this would violate any bank agreements with Visa or Mastercard, or if, more to the point, they would rewrite the agreements to make it be a violation. The stores who lose business would of course hate it, but they would tend to be the scam houses that just cause lots of chargebacks anyway, so I don’t see why Visa/MC would want to come to their aid.

Ummm...I don't think that would work out

Oh boy would that not last past the first rejection with me. Because I know it would be 4 am, I'm trying to get some breakfast on the road and the card would reject because I'm in some crummy diner that's one bribe away from closure by the board of health. I then have to take the extra step of calling my company and forcing they to auth the charge? No, I think I'll pass on this one...

No

As I said, you could also say "try it again" or use another card, as this would not be intended as a sole card. But it might not be for everybody.

Sounds nice: My bank offers disposable credit card numbers

I just recently noticed that my bank offers disposable credit card numbers. This program is similar to what you propose: You configure it with expiration dates and credit limits. Of course, it only works for online vendors, and only if you go through the hoops to configure a temporary number. Still: a useful way to protect your *real* credit card number, and it seems to indicate that the banks are thinking along similar lines.

That's what I thought of

That's what I thought of too. When I imagine the customer who's getting scammed today, I see someone who would blindly call their company for an auth every time. (Remember that the scam company will be right there telling him how to get the auth, with a bogus story about why the company is blocked.) So the credit card is as insecure as ever; it's just The One That's Hard to Use.

Making customers use a throwaway number for untrusted merchants would actually start adding protection, since even clueless customers would not be able to hand their main CCN to bad merchants.

Not at all like disposable numbers

While disposable numbers are a good idea, that is entirely orthogonal to my proposal. What I’m talking about is using the accept/reject on a credit card transaction as a way to communicate one bit of information back to you — “this store has a bad enough reputation that you probably don’t want to shop here.” You could do that with a disposable number or a reusable one as you wish. The disposable numbers were primarily intended for online shopping, and I still contend that a browser plugin is probably a better way to be warned about shady web shops, though the idea of forcing people to rate merchants when examining the credit card bill remains valuable either way.

Disposable numbers really never worked for brick and mortar purchases.

This method would also not work for restaurants or other places where you use the card after you’ve consumed your purchase. As such it would probably never reject a purchase from such establishments, and just tell you after the fact you made a mistake in case you are planning to repeat it. (ie. an E-mail that night saying, “Before you go back to eat again at Mia Botulisma you might want to know something…”)

This idea relates to one of the first ideas I posted on this blog, the big yellow button.

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