Posted on Wednesday, 16th June 2010 by Sarah Sullivan
All of us use credit and debit cards, and most of us use them frequently. Many use plastic more than cash. Everyone has read that little caveat on the back of their cards: “Not valid unless signed,” but how serious a rule is that? Has anyone ever paid with a credit card to seen a vendor check the signature and frankly, do vendors even see cards anymore? At gas stations we pay at the pump. We use self-checkout machines at supermarkets and pharmacies. Restaurant workers return our cards to us before they see the signature we scrawl on the receipt. Online transactions never come with a required signature. So, what’s the deal with the credit or debit card signature?
Technically, no card is valid unless it bears the cardholder’s authorized signature. The signature on the rear of the card serves two purposes: an identity check, and acceptance of the card’s terms. (Note: using a card, even if you don’t sign it, also constitutes acceptance of card terms.) Per agreements with the company issuing the card, vendors cannot ask a cardholder for identification. Not a driver’s license, license plate number, home address, social security number, nothing. A signed card is considered the only form of identification required. The exception occurs when a buyer pays a merchant with an unsigned card. Then, the vendor is required to ask for identification, and then to insist that the customer sign the card before the vendor can accept it.
Another little fact about merchant agreements: accepting Visa or MasterCard effectively bars merchants from requiring minimum amounts for credit card purchasers. (American Express allows minimums, provided they extend to other cards the merchant accepts.)
Should you write, “Please see ID,” or a similar phrase on the back of your card, instead of a signature? This may work in practice, but according to both MasterCard and Visa merchant agreements, vendors shouldn’t accept any card without a signature. The same rule mentioned above holds true here as well: if a card is presented unsigned, the merchant cannot accept it without verifying the purchaser’s identity and watching the purchaser sign the card.
The “Please see ID” tactic can run you into another little inconvenience. What if you run into the one vendor who checks, and you don’t have identification with you?
Most agree, leaving your card blank is possibly the worst thing you can do. Remember, merchants can’t actually ask you to provide identification if you pay with a signed card. So, let’s say you opt not to sign your card, and find it tragically stolen. With a blank card, the thief can simply sign your name in their own handwriting, and then do the same with any receipts they sign when using the stolen card. Some might say in that scenario, signing the card just gives the thief a sample of the signature to forge. That might be true, but if you force a thief to forge your signature, there’s at least a small chance that the merchant will notice if the forgery is vastly different from that on the card.
The upside is that most fraudulent charges are covered by the issuer’s fraud protections. (For more information on fraud protection, check your card agreement or get in touch with your bank.) So, the best thing you can do is sign the back of your card. Then, keep a close eye on it, and make sure you immediately report a stolen card.
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