In December 2015, Landry’s, the restaurant behemoth that owns more than 40 brands, reported its credit card data had been breached. Wendy’s, which owns more than 6,500 locations, reported that it is also investigating the possibility its system has been hacked as well.
There are three major ways consumers are victimized by the theft of their credit card data: hacking, skimming and phishing. Phishing is trying to get consumers to give up their personal and credit card information, generally by phone or email, so that doesn't apply to in-person situations like dining. “Hacking” is what happened to Landry’s and possibly to Wendy’s, with the data being acquired by gaining access to databases. “Skimming” employs a device that captures data when a credit card is swiped. It's easy to store under a fast-food counter. Thieves can even rig gas pumps and ATMs with the devices. (Skimming devices come in several forms and can be swipers, cameras or fake keypads.)
While paying with cash avoids the issue, carrying around a bunch of cash is not safe, either. Inadvertently displaying a wad of cash during a purchase is like putting a target on your back and once it is gone, there’s no way to get it back, prove it's yours or reduce liability.
Restaurants and bars are two of the toughest kinds of businesses for consumers to protect their credit card data, purely because of how they operate. In those situations, it is common for the server to take the credit card to the card swipe. It's almost always located somewhere else — often out of sight of the patron. Bars usually expect the patron to hand over his card, and the bar keeps it for the duration of the visit. (It's also very easy to forget your card in these situations — especially if you're with a group of people and someone else closes the tab.) At fast food drive-throughs not equipped with a self-serve card swipe, the credit card goes to the cashier and disappears beyond the window temporarily.
John Brewer with the Harris County District Attorney’s office told the CreditCards.com website that, in cases he’s seen, most credit card data was stolen by skimming. In fact, he regards online purchases as much less risky than in-person transactions.
According to the website, Brewer recommends that when paying by credit card, make sure it never leaves your sight. At fast-food restaurant counters, there’s no good reason for the card to not be visible.
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- Make sure your card stays in sight, and never let anyone leave your presence with the card if you can help it. "Skimming occurs most at restaurants since the waiter has to walk away with your card," Brewer says. "If you are in a retail store and they say they have to go to another counter to run the card, follow them." If you are concerned about letting go of your card at restaurants, use cash instead.
- Your credit card is like cash. "You need to be aware that your credit card is very valuable," Brewer says. "Treat it like a diamond or cash. Would you just give someone cash and let them walk away with it?"
- Monitor credit card receipts and check them carefully against your statements. If you are married, sit down with your spouse to account for all charges, Brewer says. Some thieves take out small amounts in hopes cardholders won't notice.
Here’s another idea for protecting yourself even in situations where the card is inevitably going to disappear temporarily. Most retail stores sell reloadable Visas, MasterCards and American Express debit cards. They’re most commonly purchased to give as gifts, but there’s no reason they can’t be loaded with a fixed amount and used to pay for drinks and meals.
If the card is “skimmed,” that at least limits the kind of hit patrons have to deal with and doesn’t directly affect their bank account. Visa, Mastercard and American Express all have websites to help locate authorized retailers and also sell the cards online. The only downside is there’s usually a fee for reloading — but in light of the hassle and cost of dealing with credit or debit card fraud, it's a nominal price to pay.
All that being said, using a credit card is still far preferable to paying by debit card. Check out this list of ten places never to never use a debit card, which includes, of course, restaurants and gas stations.