Yes, I believe what happened was that the card associations had enough
clout to get legislation passed prohibiting merchants from taking credit
card numbers as guarantees for checks. In Massachusetts, the law is that
they can ask for and look at a credit card and refuse the check sale if
you don't have one but are prohibited from making any record of the card
numbers.
Note that the card associations did have some other recourse. They could
send stern memos to the merchants, look for any actually trying to put
through a charge to cover a bad check, and bounce them as merchants.
(Something like 1% of merchants a year get blacklisted by most card
associations due to fraud or some problem.)
Also they could have put a notice on each card saying it was for card
transactions only, but that might have had some negative publicity
effects.
I seem to recall that the privacy aspect was the stated reason. Without
disputing the influence that the card associations had, people didn't want
their credit card numbers being written down by other people, whether on the
back of checks or elsewhere.
I'm not sure that the cc number was being used as a _guarantee_ for the check,
although I suppose it might have been. Rather, the somewhat vague hope of the
merchants was that if someone had a credit card, he or she was probably good
for the check, and if it bounced, the merchant might be able to get the
consumer's name and address from the card association. This is the reason why
merchants now record your drivers license number on the check -- I doubt that
they expect the DMV to make good on the amount!
Actually, the real reason was probably a legitimate desire by card associations
to deprive the merchants of a free credit check, thereby forcing them to go to
check approving systems who would charge a percentage of the transaction that
would be similar to that charged by the card associations.
Bob
Robert R. Jueneman
GTE Laboratories
1-617-466-2820 Office
1-508-264-0485 Telecommuting