Unpossible!
And it's not that the bank knows the retailer uses chip. It's that the device knows the card has a chip.
If the magstripe indicates that the card has a chip, the reader must have already implemented the three tries before fallback is authorized, and logged each failure. The reader either sends a message saying, "Authorize this chip" or "Authorize this magstripe in fallback mode".
IOW if your system is set up right, and the device has a hardware failure that causes it to not just fail to read the chip but fail to register that it's even been inserted, it should never allow you to even attempt a swipe.
Defense-in-depth suggests that the bank should also enforce this, but what exactly would you send in the case of a failed read?
Gah! Stop making me think about this!
If the magstripe indicates that the card has a chip, the reader must have already implemented the three tries before fallback is authorized, and logged each failure. The reader either sends a message saying, "Authorize this chip" or "Authorize this magstripe in fallback mode".
IOW if your system is set up right, and the device has a hardware failure that causes it to not just fail to read the chip but fail to register that it's even been inserted, it should never allow you to even attempt a swipe.
Defense-in-depth suggests that the bank should also enforce this, but what exactly would you send in the case of a failed read?
Gah! Stop making me think about this!