I sort of understand the theoretical justifications of why using a credit card requires a signature but, in real life, has the signature on a credit card receipt ever changed anything? Multiply the billions of extra pieces of paper and extra time spent and managing the entire infrastructure and the entire thing seems like an eminent waste of time to me.
Some people who are into fraud later claim that they did not sign the receipt. That is why the back is signed so that the clerk can see that the signature on the back matches that on the receipt. No clerks actually check as far as I can tell.
Back in the dark ages when I managed a Blockbuster (the nineties), we would get three or four “chargebacks” every week. These were letters sent from the credit card companies, notifying us that their customer had disputed a charge and asking me to verify that the charge was legit. If I could send them the signed credit card receipt (and, presumably, the signature matched the one they have on file), the problem usually went away with no further action on my part.
Yup. But the collary to this is, is if you sell something where the comsumer has to pay by credit card (called "MOTO, mail order telephone order, in the CC merchant biz), you never get a chance to get a signature.
So, for example, you could go and “charge back” the chicargo reader charges to your CC for your TSD sub, and you’d get the funds back (after ~6 weeks, and a lot of forms). The Chicago reader would not be able to provide any supporting evidence to prove you really did auth the charge, and - cos you never signed anything - so they are debited the funds, and a fine for being so “irresponsible”.
The credit card schemes are aware of this, but it’s not really in their interest to fix it, cos they clip the ticket no matter which way the funds flow. Visa and MC have made a half hearted attempt to roll out a PIN system for credit cards (“SecureCode” for MC, and “Verified by Visa”), where anyone using a CC ont he net enters their PIN as well as the usual CC data. But, very few people are using this.
Requiring the three digit CCV (aka CBV) on the signature panel was another lame attempt to combat this.
So, the answer to the OP is, yes, the signed bits of paper DO serve a purpose. They are the vendor’s “proof” that the person who owns the card approves the transaction. In the US, I have never seen a clerk check the signature, and it’s is truly weird. Here in Oz, clerks at least make the attempt to look at the signature.
I often have my credit card initially refused in Aus because the signature strip is worn and the signature is faded. Now that I pay more attention to it, I’d estimate that at least 50% of employees check the signature.
They’ve been doing away with signature requirements for a lot of smaller transactions. I can’t remember the exact cutoff but at Albertson’s (now becoming Lucky’s), it’s something like if your transaction is less than $25.00 or so there’s no signature required. Many other places I go and make small purchases on credit either don’t require a signature, or it’s an electronic sig, which at least does away with the “billions of extra pieces of paper”. Although that logic is fundamentally flawed since the paper you sign is usually the store’s copy of the receipt, which they would usually print whether you had to sign it or not.
The signature is the consent of of the card holder to abide by the terms of the card, and shows they agree to pay back the money. Sometimes you can catch somebody that shouldn’t be signing the card because the signatures are not even close. The main function is to indicate the person agreed to the transaction that is being processed.
While I can see this working for places that require you to sign a paper reciept, it seems like those electronic signature pad gizmos allow you to, at best, give them something that looks vaguely like handwriting.
I ask to see some other ID in this case. Almost everyone is ok with that, and the majority thank me for being careful. A small minority get offended, and even most of them calm down fairly quickly when I smile and assure them I don’t suspect them of being a credit fraudster, and that it’s just something I have to do.
The question was does it ever do anything practical.
I haven’t signed my real name on a restaurant receipt for almost ten years. I’ve steadily written more and more ridiculous things. No one has ever checked. I like to make doodles, write my impressions of last nights’ basketball game, write “STOLEN” or other meta-messages, scribble garbage in made up languages, mirror-writing, use obviously fake names (e.g. Barack Obama, St Augustine). They’ve never checked.
Well, okay, they checked once. Years ago, buying the second Harry Potter book. I signed the receipt “Albus Dumbledore”. He looked at my card, looked at me, looked back and forth at the signature, then sent me on my way.
Given my experiences, I have a hard time seeing how the receipt is very useful.
I’ve seen a website where someone did the same thing for several months as an experiment and there were no problems.
I’ve never signed the signature strip on a credit card, nor have I had trouble using any of my boss’s credit cards. Some of his cards are even signed “CHECK ID.” Sometimes I sign his name and sometimes I sign mine, which doesn’t look anything like his. No problems in 6 years and probably 1000 purchases.
This doesn’t mean they aren’t important if there’s a dispute and were probably more important in the olden days when they used a carbon copy machine.
Not necessarily. First, the merchant processor here is Paypal, and anyone with a Paypal account is going to have a hard time succeeding on a dispute, especially if using a credit card that’s been verified by Paypal. Second, the subscription rate here is quite puny, certainly well below most issuer’s thresholds for following through with an investigation. More likely, the card issuer will simply write the balance off, which has the effect of spreading the costs of your fraud (for filing a false dispute) across your fellow card holders.
Actually, having the CCV input along with the billing address, and having the shipping address match the billing address* will greatly increase the odds of the merchant being shielded from liability on non-swiped** transactions.
*Here in the US, entering the billing address doesn’t do much more than compare the zip codes. A few merchants do actually contact card issuers to verify this information, but this is a time consuming process and some issuers no longer provide these verifications due to the possibility the inquiry is an attempt at pre-texting. Example, I have a two PO boxes at the same post office with the same zip code, and I’ve been able to interchangeably use both addresses for the billing address on purchases and have yet to have the transaction declined.
**Having the card physically present and physically swiped through a terminal is the single most important means of defending against a dispute. This is why many brick and mortar stores are so reluctant to manually input card numbers (And also why they will probably ask you for the billing zip code) Signatures or ID checks will only solidify the merchant’s position in the dispute.
I would hope that they’re not pushing such systems too much because they wouldn’t actually work to verify much of anything.
A PIN only verifies that the person with the number also has the PIN. They could have gotten it because they are the actual owner, or because they charged the card for something, or because someone who charged the card for something didn’t have good security practices on their website, or in several other ways.
The way to actually secure and verify web transactions is to have the credit card company actually do the authentication, not just the processing. So, web site gives you a code corresponding to a transaction, then you go to the credit card company’s website and authenticate using whatever their authentication method is (password, biometrics, token, etc.), then the credit card company tells the website that the transaction checks out, and it’s good to go.
Of course, as you pointed out, there’s little financial incentive for the credit card company to invest in good security, as they don’t bear the losses from security breaches.
It does for the seller & the credit card company: it provides some proof that it was you that made the purchase & agreed to pay for it.
Paper receipts with your signature are some proof; electronic signatures are also some proof; phone/mail order/internet purchases using the CCV are also some proof. (And they have some proof in that the item was shipped to your address – shipping an online purchase to a different address often requires additional verification.)
For smaller purchases (less than $20 or $25, typically) made in person, they often don’t require a signature any more because they have video of you making the purchase, which is also some proof. (They have decided that the risk of this not being enough proof is worth the speedup in the checkout lines, for such a small purchase.)
They also claim that this provides something practical for you, the credit card user: more protection against fraudulent use of your credit.
I have used a lot of “merchant agreements” in my years working in accounting. The merchant agreement varies among places, but generally, the merchant has to follow rules. If it does and their is a dispute, the credit card company (rather the issuing bank) aborbs the loss (and just passes it along to other customers).
The merchant pays different amounts of money for different levels of protection. For instance if you do online purchases, you have a choice. If you take credit cards without the “security” number on the credit card back, you pay less than if you require that “security number.”
So let’s say I run a website and no one ever disputes charges. It makes no sense to pay more for the security number feature. If I get one or two disputes a year, it makes more sense to abosorb the loss.
The thing that people fail to understand is the credit card rules are only enforced if there is a problem.
For example if I “Markxxx” have a credit card and it has my name embossed on the card and I signed it and I give my card to “Jane Doe,” and she uses it and the merchant clearly sees Jane is not Markxxx, if he takes the card and I don’t dispute it, there is no problem. It only becomes an issue if I say “No, that’s wrong.”
I think it’s funny the way merchants always say “You don’t pay if you’re card is lost or stolen.” I had lost my wallet and called in the card as lost within 15 minutes. I had charges on that card made days and days after to the tune of $2,000.00.
So I had to fill out a police report and print out a signed statement (I had to have it notarized), that I didn’t make the charges.
Then Citibank wrote off the $2,000.00 and immediately raised by interest rate from 1.9% to 23%. So much for protection huh? LOL
Sorry, I’ll have to ask for a cite on this.
ETA: Reason being that brick and mortar merchants generally pay .50% to 1% less in discount fees for having the card present and swiped at the terminal. CVV is a fraud deterrent and it does not stand to reason that merchants would have a higher discount rate for protecting themselves from fraud by requiring the CVV.
I have never signed the back of my credit cards and that has never been an issue. I have never written a fake signature on purpose, but my poor handwriting skills nearly guarantee that all my signatures differ vastly. I never understood the trust put into signatures, they seem rather useless at proving identity.
I would suggest you read the employees comments on Customer’s Suck to see how much of a problem not signing your card is.