Signatures – Do You Need Them or Not?
Earlier this year the four major credit card brands, Visa, MasterCard, American Express and Discover all made announcements that they would no longer require customers to sign for credit card transactions. The dollar amount didn’t matter anymore. You may remember that grocery stores stopped asking you sign for small purchases quite some time ago. Yet, everywhere you use your card, from an airport parking lot to restaurants, we are still asked to sign the credit card slip. You may wonder why. Here is some information about signatures.
#1 – You Don’t Need a Signature
The message was poorly delivered to merchants and they simply lack the knowledge. We would like to think that Chosen Payments merchants all know because we delivered the message to our clients in many different formats. However, many people don’t take the time to read our newsletters (which are chock full of information) or they simply are stuck in their ways.
In case you missed it, let us tell you about it again. Attention merchants, you no longer need to ask customers to sign for purchases. Yes, even if the transaction is $1,234.56. Our largest merchant transaction last week was $85,000 in a single transaction. No signature was required. This should speed up the checkout process.
#2 – You Think You Need a Signature
For some merchants, it is almost habit because of a process. For example, you likely will add a tip to a restaurant transaction and both you and the restaurant owner probably falsely believe that signing the transaction receipt acknowledges the tip amount written in by the cardholder. Or, you may believe that having a client sign a receipt acknowledges acceptance of goods and/or services. They might and it might make you more comfortable knowing that you have that signature to prove that you did the work or delivered the goods. However, this offers no protection to your business from credit card fraud.
There are much more effective measures for preventing fraud such as verifying the identity of the purchaser. But, before you decide to abandon the signature simply because the credit card brands say you don’t need them anymore think other reasons you might actually need a signature. If you put a statement on your transaction receipt that says, “Absolutely no refunds”, this now become a contract in addition to a transaction and the signature acknowledges the terms of the sale by signing.
Chosen Payments recommends our auto repair merchants continue to obtain signatures. When a customer signs a work order at repair shop, a signature acknowledges the work was completed satisfactorily, the car was not been damaged during the course repairs and the repairs are accepted as completed.
#3 – Does Your Hardware Need Updating?
In some cases merchants are asking for signatures without actually asking. Their outdated POS systems are prompting customers for signatures on a pen pad. That’s a result of software prompting it because….that’s how we have always done it. Give your credit card processor a call to see if they are able to adjust the settings for you or consider updating your hardware.
Should I Ask for a Signature?
Only you can answer this question for your specific business, the products or service you sell and the type of customers you serve. Many merchants have taken a view that it is “better to be safe than sorry” and continue to ask for signatures. The fact is, having a signature on the receipt won’t do much to combat chargebacks and fraud allegations anymore. Payment technology has moved well beyond that. Whether you choose to require signatures for credit card transactions is totally up to you. Credit card brands don’t require it from any merchant at any time for any type of transaction.