One in 10 British tills will fail to meet chip and PIN deadline

Leading retailers including John Lewis, Bhs and B&Q will not have chip and PIN terminals in place in all their stores in time for tomorrow's deadline in the transition to the new card payments system.

Some 90,000 tills - more than 10 per cent of Britain's network of 860,000 terminals - have not been converted to chip and PIN technology.

The failure to introduce chip and PIN - which requires debit and credit card holders to key in a four-digit code to authorise transactions, rather than to sign - will hamper efforts to reduce fraud. From Wednesday, retailers will be entitled to insist that customers who have chip and PIN-enabled cards to use the new system - until now, some customers have continued to opt to sign for transactions.

Customers who refuse to use their PINs, or forget their numbers, will be asked to pay in another way, or turned away, though the new rules only apply to people who have chip and PIN-enabled plastic. About 128 million new chip and PIN cards have been issued over the past two years, but holders of about 13 million old-style cards will retain the right to sign for transactions until their plastic has been updated.

Customers will also continue to be able to sign for transactions in outlets that have not yet installed chip and PIN tills. While the retail industry has been aware of tomorrow's deadline since the middle of 2005, several large companies have not brought conversion programmes forward.

Bhs is not expected to update all of its tills until the summer, while Clinton Cards expects to complete the process in May. Similarly, the DIY chain B&Q said it would not complete the installation of chip and PIN tills in its stores until mid-April. Another store chain, John Lewis, will not have installed chip and PIN tills in eight of its 27 stores by midnight on Tuesday, though it hopes to finish rolling out the technology at its Waitrose subsidiary by tomorrow.

Sandra Quinn, of Apacs, the organisation handling the move to the new system, admitted: "It is a mixed picture - most retailers have recognised that customers want this technology, but not all tills have been converted."

Retailers that fail to use chip and PIN technology have been exposed to potential losses from fraud for more than a year. Since 1 January 2005, the banking industry has been entitled to reclaim losses from fraudulent transactions from retailers, if the crime could have been prevented with the use of the chip and PIN system.

Paul Smith, of the British Retailers Consortium, said: "Retailers are ready - 90 per cent of tills in the UK have been upgraded and of the remainder, a significant number have decided not to upgrade machines for the time being."

Small shops, such as newsagents, where most transactions are cash, may believe the expense of the new tills is not justified by their exposure to fraud risk.

A spokeswoman for B&Q said: "We want to ensure all our systems have been properly tested before we fully upgrade so that we continue to offer our customers consistency of service."

Total debit and credit card fraud fell 13 per cent in the second half of last year after the introduction of chip and PIN, Apacs said.