Identity theft is a growing problem that consumers can no longer afford to ignore.

According to the Federal Trade Commission (FTC), in 2003, consumers in the U.S. alone lost $5 billion to identity theft while the problem cost businesses a whopping $48 billion. On average, people who experienced identity theft that year had to spend $1,495 and 607 hours to resolve their cases.

The federal government is taking decisive steps, including enactment of the Fair and Accurate Credit Transactions Act of 2003, which requires retailers to properly dispose of and destroy sensitive consumer data.

While this is a positive step, what if there were a way in which consumers and merchants could help prevent identity theft from happening in the first place?

Technology: A Helpful Deterrent to Identity Theft

Research by the FTC indicates that identity thefts are increasingly fueled by customer information found in the trash.

One simple way for independent merchants to rectify the trash issue is to automate their point of sale with software technology such as that from Microsoft Corp.

Retailers that choose technology wisely can offer their customers some peace of mind by helping to prevent highly confidential and potentially damaging information from getting into the wrong hands.

By using software technology, account numbers associated with credit and debit cards never need to be committed to paper. Instead, the computer system manages the transaction, masking the data associated with the transaction so full credit card information is more secure.

By automating the point of sale, retailers are also able to help control which employees have access to customer information, and customer data can be deleted once a specified period has passed.

While the benefit for customers is clear, there are also considerable advantages for the retailer. As the experience of many independent merchants proves, automating at the point of sale also helps improve other areas of customer service and saves time and money--all of which, of course, is good for business.

Point-of-sale software technology is certainly not the only solution to the growing problem of identity theft, but it can help small merchants offer greater peace of mind to their customers.