THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 8, 1995 TAG: 9501070186
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Long : 241 lines
Brooke Anderson, splurging on an expensive skin-care line, handed over her personal check to the department store cashier. For no reason other than boredom or curiosity, her eyes wandered to the cashier's hand.
``Then, my heart stopped,'' she said of the experience at the Leggett store in Chesapeake's Greenbrier Mall. ``I saw her writing on my check. She wrote B-F: black female.''
The practice is rare among today's retailers. Few in the retail industry had heard of Leggett's policy of writing race on personal checks. Most consumer groups, retail analysts and law enforcement officials contacted for this story said they did not know of any retailers currently using the practice.
``I have been here for six years, and I've never seen race on any checks,'' said Virginia Beach Magistrate Bert Cowell. ``It's never given.''
Law enforcement officials and merchants groups say noting race and gender is perfectly legal and helps identify bad-check writers. But minority community leaders and some Leggett customers find the practice offensive. They say it brings up a host of issues, particularly reminding black people about the history of discrimination.
``We should not spend our money where we're not respected,'' said March Cromuel, head of the Chesapeake branch of the National Association for the Advancement of Colored People. ``There is no reason for them to be putting race on checks.''
In the past, marking a person's race on checks had drawn enough bad publicity and upset enough consumers to make national chains like Sears and Safeway end the practice.
Leggett Stores Inc., a chain of about 40 department stores, has kept the policy in South Hampton Roads and in its other major markets, a company official said.
For years, the South Boston-based chain has recorded race - black, white or other - and gender on all of its shoppers' personal checks. But that may soon change.
A Leggett official said that the company doesn't want to upset customers and will re-examine the policy early this year.
``A hard look will be taken at it,'' said Jeffrey V. Haley, assistant corporate operations manager.
``We don't want to do anything to alienate our customers,'' Haley said. ``There is no intent on our part of any discriminatory practice.''
Haley gave two reasons for the company's practice of coding checks. Unlike other major retailers, Leggett does not use a collection agency to recover money lost from bad checks. Instead, Leggett contacts customers directly, he said.
Secondly, Leggett believes it needs specific descriptions, such as customers' race and gender, to get a warrant in South Hampton Roads cities and other localities when the company tries to collect on bad checks, Haley said.
``We do this where the court system requires additional information,'' he said.
The Chesapeake branch of the NAACP said it recently has gotten two or three calls from black customers on Leggett's policy. Among them was Anderson, a Virginia Beach resident who manages a doctor's office.
Anderson said she she was shocked when she noticed the Leggett cashier in Greenbrier Mall coding her check. ``Do they think my check is bad because I'm black?'' she asked herself.
After the manager explained that the practice was designed to nab bad-check writers, Anderson wondered: ``Why did they put me through this?''
While some might find the practice insensitive, law enforcement officials generally support Leggett's policy. They say the more information that goes on a check, the easier it is for them to track down bad-check writers. Virginia law says almost anything about shoppers can be written on their checks except their credit-card numbers.
``When a person comes to our office, a representative for Leggett or whatever, to get a warrant for a worthless check, we want to know if the person is white or black,'' said Richmond Baker, an investigator with Norfolk police. ``The race code will help us find the person.''
While race is a plus, a shopper's Social Security number is the most important piece of information, Baker said.
``Race is not really important,'' he said. ``It helps to put a race code, but it's not totally necessary.''
David Williams, Chesapeake's commonwealth's attorney, said that race and gender aren't required, but agreed that the extra information helps when the company tries to get a warrant.
The chances are few that a customer's check is fraudulent or will bounce. According to the American Bankers Association, less than 1 percent of the 62 billion checks written last year were fraudulent. About 1 percent of all checks are initially returned, mostly for insufficient funds in the bank accounts, the group said.
Some retailers get stung more than others, said Bill Coiner, head of the Virginia Retail Merchants Association. An upscale chain might get very few fraudulent checks, while other retailers might find that 20 percent of their total checks are bad, he said.
To avoid offending customers - yet still take note of race and gender - some retailers are using more discreet methods, law enforcement officials said. Some businesses nationwide are coding checks with numbers, they said. For example, the merchant might write 1 for black, 2 for white, 3 for Asian and so on.
Retail analysts say any kind of racial coding - numbers or letters - is outdated. In addition, if customers are complaining, the practice might wind up hurting the business.
``For every one person who complains, there are hundreds of others out there who didn't,'' said Margie Johnson, a Virginia Beach retail consultant who helps businesses attract more customers. ``They just don't shop there anymore.''
Retail analysts say there's no need for racial coding of any kind.
``If they're using it to combat check fraud, there are check-verification services that do that,'' said Kenneth M. Gassman Jr., a retail analyst with the Richmond brokerage firm Davenport & Co. ``After they put it through the machine, five seconds later it tells whether the check is likely to be good.''
Leggett does use a check-verification service at its four South Hampton Roads stores, but only for checks written for more than $50, employees said. All personal checks, regardless of the amount, must include race, gender and birth date, they said.
One Leggett employee expressed embarrassment at the procedure and said several of her customers have gotten upset.
``They say: `What is that? Why do you need that?' '' said the Leggett saleswoman. ``I tell them I couldn't say why and they need to talk to management if they have any questions.''
Another saleswoman at Leggett said customers don't always notice. People don't always look through their checks once they're returned from the bank. Another reason: In training, workers are told to be discreet.
``I did it a few times,'' said the saleswoman, who asked not to be identified. ``But I felt funny about doing it. . . . It's embarrassing. Plus, I thought, `I'm not going to get fussed at by the customers.' ''
Brooke Anderson, splurging on an expensive skin-care line, handed over her personal check to the department store cashier. For no reason other than boredom or curiosity, her eyes wandered to the cashier's hand.
``Then, my heart stopped,'' she said of the experience at the Leggett store in Chesapeake's Greenbrier Mall. ``I saw her writing on my check. She wrote B-F: black female.''
The practice is rare among today's retailers. Few in the retail industry had heard of Leggett's policy of writing race on personal checks. Most consumer groups, retail analysts and law enforcement officials contacted for this story said they did not know of any retailers currently using the practice.
``I have been here for six years, and I've never seen race on any checks,'' said Virginia Beach Magistrate Bert Cowell. ``It's never given.''
Law enforcement officials and merchants groups say noting race and gender is perfectly legal and helps identify bad-check writers. But minority community leaders and some Leggett customers find the practice offensive. They say it brings up a host of issues, particularly reminding black people about the history of discrimination.
``We should not spend our money where we're not respected,'' said March Cromuel, head of the Chesapeake branch of the National Association for the Advancement of Colored People. ``There is no reason for them to be putting race on checks.''
In the past, marking a person's race on checks had drawn enough bad publicity and upset enough consumers to make national chains like Sears and Safeway end the practice.
Leggett Stores Inc., a chain of about 40 department stores, has kept the policy in South Hampton Roads and in its other major markets, a company official said.
For years, the South Boston-based chain has recorded race - black, white or other - and gender on all of its shoppers' personal checks. Leggett cashiers use a stamp to print the letters ``W-B-O-M-F,'' or white, black, other, male and female. Then they circle the corresponding race and gender. Some cashiers write the letters down with a pen.
When asked about the practice, a corporate Leggett official said that the company doesn't want to upset customers and will re-examine the policy early this year.
``A hard look will be taken at it,'' said Jeffrey V. Haley, assistant corporate operations manager.
``We don't want to do anything to alienate our customers,'' Haley said. ``There is no intent on our part of any discriminatory practice.''
Haley gave two reasons for the company's practice of coding checks. Unlike other major retailers, Leggett does not use a collection agency to recover money lost from bad checks. Instead, Leggett contacts customers directly, he said.
Secondly, Leggett believes it needs specific descriptions, such as customers' race and gender, to get a warrant in South Hampton Roads cities and other localities when the company tries to collect on bad checks, Haley said.
``We do this where the court system requires additional information,'' he said.
The Chesapeake branch of the NAACP said it recently has gotten two or three calls from black customers on Leggett's policy. Among them was Anderson, a Virginia Beach resident who manages a doctor's office.
Anderson said she was shocked when she noticed the Leggett cashier in Greenbrier Mall coding her check. ``Do they think my check is bad because I'm black?'' she asked herself.
After the manager explained that the practice was designed to nab bad-check writers, Anderson wondered: ``Why did they put me through this?''
While some might find the practice insensitive, law enforcement officials generally support Leggett's policy. They say the more information that goes on a check, the easier it is for them to track down bad-check writers. Virginia law says almost anything about shoppers can be written on their checks except their credit-card numbers.
``When a person comes to our office, a representative for Leggett or whatever, to get a warrant for a worthless check, we want to know if the person is white or black,'' said Richmond Baker, an investigator with Norfolk police. ``The race code will help us find the person.''
While race is a plus, a shopper's Social Security number is the most important piece of information, Baker said.
``Race is not really important,'' he said. ``It helps to put a race code, but it's not totally necessary.''
David Williams, Chesapeake's commonwealth's attorney, said that race and gender aren't required, but agreed that the extra information helps when the company tries to get a warrant.
The chances are few that a customer's check is fraudulent or will bounce. According to the American Bankers Association, less than 1 percent of the 62 billion checks written last year were fraudulent. About 1 percent of all checks are initially returned, mostly for insufficient funds in the bank accounts, the group said.
Some retailers get stung more than others, said Bill Coiner, head of the Virginia Retail Merchants Association. An upscale chain might get very few fraudulent checks, while other retailers might find that 20 percent of their total checks are bad, he said.
To avoid offending customers - yet still take note of race and gender - some retailers are using more discreet methods, law enforcement officials said. Some businesses nationwide are coding checks with numbers, they said. For example, the merchant might write 1 for black, 2 for white, 3 for Asian and so on.
Any kind of racial coding - numbers or letters - might wind up hurting the business if customers are complaining, retail analysts say. There's no need for racial coding of any kind, they say.
``For every one person who complains, there are hundreds of others out there who didn't,'' said Margie Johnson, a Virginia Beach retail consultant who helps businesses attract more customers. ``They just don't shop there anymore.''
``If they're using it to combat check fraud, there are check-verification services that do that,'' added Kenneth M. Gassman Jr., a retail analyst with the Richmond brokerage firm Davenport & Co. ``After they put it through the machine, five seconds later it tells whether the check is likely to be good.''
Leggett does use a check-verification service at its four South Hampton Roads stores, but only for checks written for more than $50, employees said. All personal checks, regardless of the amount, must include race, gender and birth date, they said.
One Leggett employee expressed embarrassment at the procedure and said several of her customers have gotten upset.
``They say: `What is that? Why do you need that?' '' said the Leggett saleswoman. ``I tell them I couldn't say why and they need to talk to management if they have any questions.''
Another saleswoman at Leggett said customers don't always notice. People don't always look through their checks once they're returned from the bank. Another reason: In training, workers are told to be discreet.
``I did it a few times,'' said the saleswoman, who asked not to be identified. ``But I felt funny about doing it. . . . It's embarrassing. Plus, I thought, `I'm not going to get fussed at by the customers.' '' by CNB