I can’t remember the last time I’ve signed the back of a credit card, and I use my credit cards (one for personal travel and big expenses, one for all other personal expenses, and one for business expenses) almost every day. It has never caused me any problems with cashiers; at the most, I might get a dirty look or I might have to show my license, but almost always the cards are accepted without much thought.

A lot of retailers have terminals where customers can swipe their own card, so many cashiers don’t even get the chance to check for a signature on the back. Even those who ask to see the card take no more than a quick look at the back. Most do nothing but punch in the last four digits into their point-of-sale computer and hand the card back.

It’s fairly common to write “See ID” or “Ask for ID” in the signature block on the back of credit cards but not every retailer reacts the same way when encountering this request. Here is a question I received from a Consumerism Commentary reader, Ryan:

I was recently told by a retailer that they would not accept my debit/credit card because I had not signed the back and wrote “SEE ID” instead. I was told the card was not valid and I was required to sign it in order to use it. I have done this same practice for over twelve years and have never been asked about it before now.

I was told they were cracking down… So the sale was denied and the charges reversed. First, is a signature truly required? If so, how can online and “swipe-less” transactions with my card be legal?

If you ask Visa or MasterCard, the policy is clear. For all in-person transactions, a signature on the card is necessary. If a signature is not on the card, retailers are instructed to require the customer to sign the card and provide identification.

Here is the related section of the Rules for Visa Merchants:

The final step in the card acceptance process is to ensure that the customer signs the sales receipt and to compare that signature with the signature on the back of the card… While checking card security features, you should also make sure that the card is signed. An unsigned card is considered invalid and should not be accepted. If a customer gives you an unsigned card, the following steps must be taken:

• Check the cardholder’s ID. Ask the cardholder for some form of official government identification, such as a driver’s license or passport. Where permissible by law, the ID serial number and expiration date should be written on the sales receipt before you complete the transaction.
• Ask the customer to sign the card. The card should be signed within your full view, and the signature checked against the customer’s signature on the ID. A refusal to sign means the card is still invalid and cannot be accepted.
• Ask the customer for another signed Visa card.
• Compare the signature on the card to the signature on the ID.

If the cardholder refuses to sign the card, and you accept it, you may end up with financial liability for the transaction should the cardholder later dispute the charge.

Some customers write “See ID” or “Ask for ID” in the signature panel, thinking that this is a deterrent against fraud or forgery; that is, if their signature is not on the card, a fraudster will not be able to forge it. In reality, criminals don’t take the time to practice signatures: they use cards as quickly as possible after a theft and prior to the accounts being blocked. They are actually counting on you not to look at the back of the card and compare signatures — they may even have access to counterfeit identification with a signature in their own handwriting.

“See ID” or “Ask for ID” is not a valid substitute for a signature. The customer must sign the card in your presence, as stated above.

MasterCard’s rules are similar, and most agreements between merchants and third-party payment processors reflect these rules.

You might think that would be the end of the story, but in reality these rules are almost never followed. The banks that offer credit cards on Visa’s network or MasterCard’s network, like Citi and Bank of America, may not even be fully aware of the signature requirement. I called Citi to speak to a customer service representative to try to gauge the bank’s preference. The person I spoke with seemed unfamiliar with MasterCard’s rule. She mentioned that it’s quite common for customers to write “See ID” on the back of the card and for those cards to be accepted. The representative understands most retailers will ask for identification and complete the transaction without requiring a signature.

According to the customer service representative the retailer has the authority to decline a transaction if the signature is missing even though most retailers don’t. Although Visa and MasterCard would like to require a signature, most retailers are willing to bend the rules to make the sale and remain customer-friendly.

Ryan also asked about online or “swipe-less” transactions. It certainly is legal to use credit cards for online or telephone-based purchases. In these cases, the “card-not-present” situations in which retailers can’t view the signature on the card, retailers are supposed to implement more security features such as the following:

• Pre-authorize the transaction
• Ask for the card’s expiration date
• Ask for the card verification code (CVV2 or CVC2), the three digit code on the back of the card, or the four digit code on the front of American Express cards
• Verify the card holder’s address (AVS)

It is up to a retailer how secure they want to make the transaction process. Making the process easier for customers, by not verifying address or not asking for a CVV2 code for example, also invites more fraud. Fraud results in chargebacks to the merchant, and merchants really do not enjoy dealing with chargebacks. (This is what happens when you call your credit card to dispute a charge you may or may not have made.)

You are at the mercy of the retailer or cashier when it comes to acceptance of credit cards. If a cashier won’t accept your card without a signature, you could try asking for the manager but don’t be surprised when a retailer won’t complete the sale without a signature. Not many are this strict, but those who do require the signature are sticking to Visa’s and MasterCard’s rules.

Readers: Do you sign the back of your credit and debit cards, leave them blank, or write “See ID?” Have you encountered any push-back from cashiers?

Photo credit: Ciaran McGuiggan
Rules for Visa Merchants, November 10, 2009

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