Credit Cards Signatures and Guard Your Identity

Physical Science – SCI 110

January 26, 2012

Strayer University

Credit Cards Signatures and Guard Your Identity

Some retailers such as gas stations, some grocery stores, and some other stores require signatures on credit card purchases and some do not. There are three basic areas that concern most retailers and credit cards signatures. Credit cards signatures may prevent the crime that causes inconveniences to conduct business, financial losses, and stolen identities.

So, Credit-card issuers and retailer of businesses always make decision between security and customers' convenience. The customers do not want to take the time to provide identification when they use a credit card, or to wait while someone verify it. Most clerks do not check signatures or photos on credit cards. More often, we swipe our cards through a machine ourselves; a clerk does not look at it at all. Intended for some customer convenience and to speed transactions, some stores do not require a signature for small purchases. Others have self-service checkout. Retailers and credit-card companies are willing to absorb some fraud losses as part of doing business. Such trade-offs are not new. Retail stores keep small, very expensive items in locked cabinets, but most goods are easily accessible to customers for convenience and efficiency.

American Express and Discover both have similar policies, and not only prohibit I.D./signature from being required, but also strongly discourage it. By federal law, you can only be held liable for up to $50 of fraudulent credit card charges (The Fair Credit Reporting Act:Relief Act of 2006 (Public Law 109-351)., 2011). That was enacted decades ago, and today, Some have never heard of any credit card company, even the smaller ones, enforcing the $50 deductible. Simply put, you are not responsible for charges. So before you blow your stack, remember it's not your money that is liable!

Now that brings us to the question "If a store cannot ask for I.D./signature when using a credit card, would that hurt the credit card companies?" Well theoretically, yes, they take the liability. But with modern automatic fraud detection techniques, such as unusual spending patterns or use of card outside of your normal areas, the crime is usually caught (as in new charges prevented) early on, even if the consumer doesn't notice them. Credit card companies want their products to be as user-friendly as possible, and they know requiring I.D./signature is not exactly user-friendly. Therefore they have concluded they rather take the risk

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