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Sign the Back of Credit Cards or Not?

Posted on Apr 24, 2008 by Tom Fragala

One common tip I have heard is that you should not sign the back of your credit cards or write something in its place asking that ID be checked. What should you do? Well, the right question to me is "Is this an effective fraud deterrent?" Frankly, it doesn't do much. While existing credit card fraud (unauthorized charges on a bona fide account) is a serious issue, you are afforded the most protections by law, as long as you are diligent in checking your account statements.

You may hear people, who write "check ID" in place of their signature on a credit card, raising a stink that cashiers so rarely look and request ID. While strictly speaking these businesses are violating their merchant agreements with the payment card processors (i.e. Visa, Mastercard), let's be practical. I don't think this is a gigantic scandal we need to focus on. There are far bigger fish to fry. Do you really expect MacDonald's to get in people's faces over a $2 purchase?

Recently, Lifehacker had a post on this topic with quite a few comments (with a lot of misinformation and poor advice in the comments). Some people make the point that signing your credit card makes it easy for a thief that steals your card to forge your signature. That's silly -- criminals don't use stolen cards to get your signature. They steal cards to use them ASAP and then get rid of them. Besides, you are required to have a signed credit card according to payment card industry rules. Here is an excerpt right from Visa merchant rules:

While checking card security features, you should also make sure that the card
is signed. An unsigned card is considered invalid and should not be accepted. If a
customer gives you an unsigned card, the following steps must be taken:

• Check the cardholder’s ID. Ask the cardholder for some form of official
government identification, such as a driver’s license or passport. Where
permissible by law, the ID serial number and expiration date should be
written on the sales receipt before you complete the transaction.

• Ask the customer to sign the card. The card should be signed within your
full view, and the signature checked against the customer’s signature on the
ID. A refusal to sign means the card is still invalid and cannot be accepted.
Ask the customer for another signed Visa card.

• Compare the signature on the card to the signature on the ID.
If the cardholder refuses to sign the card, and you accept it, you may end up with
financial liability for the transaction should the cardholder later dispute the charge.

Moreover, Visa goes into even more detail about those who write "See ID" or something similar in place of a signature. Here are guidelines from Visa about this and when merchants should be asking for ID:

“See ID”:

Some customers write “See ID” or “Ask for ID” in the signature panel, thinking
that this is a deterrent against fraud or forgery; that is, if their signature is not on
the card, a fraudster will not be able to forge it. In reality, criminals don’t take the
time to practice signatures: they use cards as quickly as possible after a theft and
prior to the accounts being blocked. They are actually counting on you not to look
at the back of the card and compare signatures—they may even have access to
counterfeit identification with a signature in their own handwriting.

See ID” or “Ask for ID” is not a valid substitute for a signature. The customer
must sign the card in your presence, as stated above.

Requesting Cardholder ID

When should you ask a cardholder for an official government ID? Although Visa
rules do not preclude merchants from asking for cardholder ID, merchants
cannot make an ID a condition of acceptance. Therefore, merchants cannot
refuse to complete a purchase transaction because a cardholder refuses to
provide ID. Visa believes merchants should not ask for ID as part of their
regular card acceptance procedures. Laws in several states also make it illegal
for merchants to write a cardholder’s personal information, such as an address or
phone number, on a sales receipt.

If you are suspicious about the transaction or feel you need additional information
to insure the identity of the cardholder, make a Code 10 call.

Take away: stop trying to be clever. Sign your credit or debit cards. There are many other more effective means to reduce fraud.