I’m trying to figure out how credit cards worked before the invention of the magnetic stripe. How did the prevent someone from going and buying 100k worth of shit on card with a $500 limit? How long could a thief use a stolen card? Forever?
I worked in a retail store around 1974. When someone gave us a credit card we first looked in a book of numbers of bad cards. If we found a match, we were supposed to confiscate the card. I’m sure that checking the book varied from store to store. If you knew a store that was lax you could get away with it for a lot longer.
If no match was found, we picked up the phone and called the credit card company and got an authorization number that we had to write on the credit card slip. As I recall, every single transaction had to have the authorization, but I don’t remember whether that was store policy or the credit card company’s. Those were the days when the card was placed in a little machine with a roller that imprinted several copies with the number on the card and other information from the raised digits on the card.
The person then signed the slip, took the customer copy. We the merchant kept a copy and the third copy was mailed in to the credit card company.
What if the phones weren’t working or the line was busy or the call was dropped, all of which happened on a regular basis? Everybody cursed the credit card company and waited. Not that different from today, all things considered.
In the old days the store clerk had to telephone a live human operator and read that person the number on the card, their merchant number and the proposed sale amount. The credit card clerk would type that into their computer & read back the yeay or nay result. Yes, using a credit card then was much slower than using a check is now.
The credit card companies also used to publish books of stolen card numbers. Every week or so every retailer in the country would get one new book for each of their cash registers. Thigs were a lot more local then, so it wasn’t like the book covered every card in the country, just the ones from your state or region. And before a sale was approved, they’d thumb through the book looking to see if your card was in it.
The magstripe really has nothing to do with any of this. The first electronic card approval systems required the store clerk to hand-key the card number into the terminal. WAG early 1970s. Swiping came many years later. WAG late 1970s.
ETA: Must. Type. Faster.
Really? Huh. How thick was the ‘bad card’ book? Did each credit card company provide a book the size of the NYC phone book?
Credit cards were nowhere near as universal as now and if you did have one, it was likely the only one aside from a dept. store or gas card.
I got my first job at a bookstore in 1984, I think, and this is just what we did as well. We had a set amount under which we could process a charge without calling for authorization; the amount varied depending on whether it was a Visa/MasterCard or American Express (Discover Cards had not yet come into being).
Not much bigger than a TV Guide.
I remember the book at the size of a Time magazine, but sideways using very thin newsprint for cheapness. There could be 500 or 1000 numbers of a page. The whole thing would be maybe 50-100 pages thick. A lot of numbers in a physically minimal space.
If it was a local department store card, quite often they had a computer pad in the office, a clerk would put the charge slip and card into a vacuum tube container (Like what is used at some drive in bank tellers) and it would go up to credit where a credit clerk would look at the pad, if all was OK, a notation of the sale was made on the pad, and approval written on the slip and it would be shipped back down to the sales floor via the vacuum tube.
There were also monetary rewards when a clerk found a tagged card and confiscated it. I can recall working in a self-serve gas station back in the day and confiscated my share of cards. An incentive of $100.00 reward per card didn’t hurt. A couple of times in that tenure my weekly confiscation rate exceeded my weekly gross wage. Hellofanincentive to verify every card every time.
I recall I worked at a Red Roof Inn and we installed a strip reader for the credit card in 1986. It didn’t do real time verifications but simply looked the credit card number to see if it was in the book.
As far back as 1980 when I worked with credit cards, we used books. They weren’t very big, because you had to be really bad to get into it. Or have the card stolen.
In all those years I never found a bad card, though a co-worker of mine had her card in it.
Here’s how it worked for our hotel.
Each month you got a book. Visa / Mastercard were one book, AMEX was another and DC/CB was another, and JCB had yet another. When Discover came out they also had a seperate book.
Each charge was covered up to a certain amount. For instance, our hotel was covered up to $200 for a credit card charge. Which was lot considering the room was $13/night when I started
So they customer came in and gave us the card, we made an imprint of it and gave him a room key. Then we’d look up the card in the book. So if it was Visa, we’d get the MC/Visa book and look to make sure it wasn’t in there. If it wasn’t we’d note the page where it would’ve been had it been listed.
As long as the person’s bill did not go over $200 we were covered. If the bill went over $200 for any reason we had to phone the credit card people and get an approval number.
If there was a known thief in the area, the credit card would phone you and tell you the number and what the person looked liked.
The thing you have to remember is charges were small. Not everyone took them, even in hotels once you checked in that’s pretty much all you did. There were no faxes, or movies or such. Phone calls were limited to less than 3 minutes.
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I may be reading this wrong, but it looks like you might be thinking that the magnetic stripe stores information about the credit card’s limit. It doesn’t work like that. Today and in the olden days, someone or something at the point-of-sale has to get verification that the amount can be covered from the issuing body.
I think it’s just like today: stores have a choice whether to get authorization, but their fees are substantially higher if they don’t. Double, if I recall correctly.
Of course, a TV Guide back then was about 5’ x 8’…the last time I saw one recently it was a standard magazine format…
My father worked for a credit-card issuing company in the mid-seventies. He was the person at the other end of the phone that store clerks would call for authorization. He describes a giant lazy susan of enormous books that you would swing around until you found the appropriate one; you’d then look up the account and see if they had enough credit to cover the purchase, then authorize it or not.
:eek: That’s a gigantic magazine.
There was a similar service for checks - I worked at one of the first check approval services to actually use a computer system (a PDP-8 with total storage in the 10’s of megabytes) to look up account numbers. Most of the agents still used the paper books - I recall that merchants could pay for a premium service that used the computer for faster responses, though they still had to dictate the number to an agent and wait for it to be typed in. One thing I remember is that one agent used a pair of dice and rolled to decide whether to approve or decline. His accuracy rate wasn’t much different from the other agents.
The fee schedule also varies depending on whether the card is swiped or the number is typed into the keypad (for example, because the stripe isn’t readable). Those get treated as “card not present” purchases which carry a higher fee to the merchant.
Back then, TV Guide’s graphic designer was Nigel Tufnel.
We’re gonna need a bigger magazine rack…