Credit Cards – No Signature Required
In this day of identity theft and concerns about security I find it stunning that you don’t need to sign your credit card at a store. On Sunday Kim and I were at Home Dep
ot getting supplies for our bathroom painting and repair fest. We buzzed through the checkout with around $50 worth of stuff, swiped the credit card and then waited to sign. The checkout clerk said to us “Oh, you don’t need to sign anymore.” I was shocked and confused. Walking out to the car I simply muttered that this woman has just given me my next blog post because I need to find out the scoop behind this supposed new rule.
Sure enough, as I googled this topic I was led to the latest and greatest on this new no-signature trend. At CreditCards.com they go on to say:
In order to encourage the purchase of small items at a faster pace, credit card companies are increasingly permitting consumers to simply swipe their card to pay for items under $25 at drug stores, fast food eateries, convenience stores, and pharmacies — no signature required. Credit card companies hope that these no-signature transactions will speed up store checkouts and encourage more consumers to make everyday purchases with their credit cards.
Here’s the hidden good news — you can buy more little stuff without noticing so the retailers’ pockets get fatter while you slip deeper into debt if you’re not careful.
Back to my story… This article seems to confirm the no signature trend, but our purchase was over $25, what gives? So I did a little more digging.
Visa has a whole new card called Contactless that takes the whole no signature thing a bit further. No swiping, no signing, just the need to hold it up to a secure reader. Once again, though, I see that $25 limit thrown around (which I might add is very similar to the under $25 no receipt required IRS rule for minor business deductions if my mind recalls correctly). Once again I wonder — am I missing something or did Home Depot pass on a signature when it really should’ve required one? I did a number of Google searches, but couldn’t find a single article talking about purchases over $25 not requiring a signature. So, I’m stumped.
My initial take on the whole thing is that speed and convenience is nice, but what happened to safeguarding your financial information? It doesn’t seem all that long ago that credit card companies were singing the praises of cards with photos and additional security features. Now, we’ve changed our tune to swipe and go. While credit card companies are great for purchasing protection and if you’re astute you’ll notice if something goes awry on your account, why invite trouble? How long does a signature or PIN verification really take? Of course one could argue that store clerks never look at your signature on your card and compare it to what you wrote anyway.
Another interesting security concern comes with the new contactless cards that use RFID technology. In October the NY Times did an article on these security concerns called “Researchers See Privacy Pitfalls in No-Swipe Credit Cards”. While all the companies claim the use of high level encryption for such data transmissions, that may not always be the case.
But in tests on 20 cards from Visa, MasterCard and American Express, the researchers here found that the cardholder’s name and other data was being transmitted without encryption and in plain text. They could skim and store the information from a card with a device the size of a couple of paperback books, which they cobbled together from readily available computer and radio components for $150.
Now that is not too comforting, is it? As a consultant with a background in technology, I know that even though information may float out there unencrypted, having someone actually obtain and abuse that information is still several steps removed. However, it does beg the question — who is policing all this? And, are we even aware what is going on behind the scenes of our financial transactions?
I’m not sure what the bottom line is on this whole trend, and most certainly have no idea why I wasn’t required to sign for my > $25 purchase at Home Depot. However, it looks like the speed and convenience trend continues to outpace security and is here to stay.
What do you think? Have you experienced this new signature-less trend? Share your thoughts and experiences in the comments…
I’ve been seeing this trend more and more and often appreciate it when I’m not thinking about the security risks. Since I don’t carry cash and haven’t carried cash for years, it is a nice break to get through the line faster. Of course, I never found the signature needed requirement much of a security feature. Very rarely do people check my card and, even then, they rarely ask for id that the signature line requests.
RFID tags are a whole different story, I’ll pass on that technology. At least I’ll feel somewhat reassured that to get my card data you’ll have to get my card (or one of those full-number-display receipts I still get occasionally). And I’ll continue to get a new card issues annually since I use it so often.
I think the CC companies don’t require signatures because they know that the cashiers don’t check them anyway.
What’s the point of signing for my groceries, if I don’t have to show my card to the cashier? I can buy $200 of groceries with a fake signature on the touch screen.
Probably the rate of fraudulent transactions is so small, anyway, that the increased number of transactions compensates for not requiring signatures and checking identities.
I just had this happen for the first time this evening while shopping at The Home Depot. I bought a storage shelf for just under $50 with taxes. I used my Visa card, which was handed right back to me with my receipt. I thought there was a mistake and said “Oh, that was a Visa, not a debit card. You need my signature.”
“No. We don’t need a signature for anything under $50 anymore.”
I was shocked. How the heck is that secure!?
This contrasts sharply to my experience at WalMart earlier in the day, where the cashier held onto my card and very carefully checked my signature against my the one on the card (a rarity these days but policy at this particular retailer). My total at WalMart was just over $70.
My theory is that major retailers (such as The Home Depot) and grocery chains have protection worked out with the major credit card companies. They have to. How else can they get away with accepting credit cards for purchases without verifying them?
I think the better questions we should all be asking are, “Why isn’t my credit card company telling me about this? What is the policy/procedure? What is the limit on unsigned transactions?”
I don’t think that cashiers should know more about how my card works than I do. Credit card companies should be telling account holders about these changes!!
My boss consistently tells customers that they do not need to sign the merchant copy of the credit card receipts and it drives me insane! These are sales in the hundreds (usually $800-$1000 each) and I don’t understand why, when the customer is standing there with pen at the ready, it’s too much of a hassle to hand over the slip and then reach out to take it back. His assumption is that if he’s physically swiped their card, it’s proof that they approved the transaction. I just don’t like it.
It’s especially fun if you think about those self-service supermarket checkout kiosks…i know you can make a purchase (up to $50, maybe more) at one of those without anyone else ever seeing your card or your signature.
There are 2 points to this argument:
1. Identity theft, wherein someone steals your Credit Card and makes unauthorized purchases with it.
If that’s the case, then this thief would be smart enough to even copy your signature. So, even if the clerk matches the signature on the Card with that on the receipt, and given the queue of people that the clerk has to contend with, it’s a rare possibility that a minor signature mismatch would be caught.
2. Credit Card companies encouraging people to spend more, and their conjecture that a hassle free transaction will lead people to spend more.
In this scenario, as a customer, what difference does it make even if you don’t sign the merchant’s copy.
I mean, one does get his/her own copy of the receipt, and if one wants to track their purchases, they can very well do so online these days.
Moreover, Credit Card companies also offer facilities to revert unauthorized transactions. So, if you notice anything suspect, go ahead and report it to the concerned people.
As Simple as that 🙂
Further to my above comment, the only way I see is to make the transaction safe, is for the clerk to see your ID Card along with the Credit Card.
Now, that might be a bit of a hassle, but I think that’s the safest bet !!!
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It’s all about trust and if I can’t trust where I make my purchases I will boycott that business. In fact I would like to find a web site that post these businesses that implement a company policy in support of a no signature required and brand them as a high risk and do not trust this company. So far I already have a list from the Austin TX area of business I do not trust nor do I make any purchases from when no signature required for $25/$50 and less.
Thank You Richard
Running my own company, I have come to find out that a consumer has up to one year to go back and fight against a charge made via their credit card. This is VERY scary to businesses!! Because the consumer basically ALWAYS wins, which means we’re out the money AND product(s)!
However, if they have signed for their goods…then they will not win. At least that’s what I heard last. 🙂 Signatures are golden.
Online sales, EVERYTHING has to match to the cc billing statement. If something doesn’t match up, my merchant service will not even allow the cc payment to go thru. I had them set it up that way after a HUGE kick to my butt when someone blatantly lied to me via email (yes, actually had correspondence with the thief!)about an order they placed. I had questions, he gave answers…and everything was a lie…unfortunately.
So after learning the hard way, we no longer will process payment if anything is incorrect. But without a signature, a business WILL be out the money and goods if a consumer ever comes back to deny the charge.
Not stating this to give anyone ideas….just stating what I’ve learned as a business owner. 🙂