Whilst many places often refuse to swipe any more (which I suppose is their prerogative) it does actually work. If the chip/pin reader has the swipe slot at the top then it will work.
Tesco don't have the swipe slot, and they now train till staff to say they can't swipe cards. But it does work on the till itself (I know this because when a friend visited we made the poor till attendant try it :)).
EDIT: also, interestingly, it looks like this service only uses the chip feature, not the pin :)
IIRC, the law states that if your card has a Chip/Pin, you have to use it. It basically ignores the case of swipe cards.
Generally I've found that swipe almost always works, it's just that most people don't know that it does. (And you have to be willing to help show them how.)
Tesco don't have the swipe slot, and they now train till staff to say they can't swipe cards. But it does work on the till itself (I know this because when a friend visited we made the poor till attendant try it :)).
EDIT: also, interestingly, it looks like this service only uses the chip feature, not the pin :)