Can retailers ask for ID with your credit card?
Card issuer rules vary, as do state laws
"May I see your ID, please?"
You may never give a second
thought to a store clerk's request for identification when you pay with a
credit card. But as long as you have signed your card, you may not be required to show
that ID to make a purchase.
The question of whether it's a good idea to present
an ID sparks plenty of debate between those who see it as a deterrent against
fraud and those who think it creates an unnecessary privacy risk.
Networks hold the
While some states have laws barring a cashier from writing down your ID
information, the card networks -- Visa, MasterCard and the like -- have
the most say in whether merchants can even ask for identification. The
agreements merchants sign when they decide to accept cards from those networks include
rules that govern card verification procedures.
All the networks allow a merchant to ask for identification. MasterCard and Visa, however, explicitly prohibit retailers from requiring an ID to
accept a properly signed card. "They can ask for that ID, but you can refuse to
show the ID and they still must accept the card," says Paul Stephens, director
of policy and advocacy at the Privacy Rights Clearinghouse, a nonprofit that advocates
for consumer privacy rights.
On the other hand, Visa and MasterCard rules prohibit the
acceptance of unsigned cards. If you present one, the merchant must ask you to
sign the card and supply an ID. Visa
guidelines specify that it must be an official government ID.
Discover's policies are more intrusive. They state that a
store employee who has doubts about the validity of a card should "request
and review additional identification" from the customer. And for an unsigned
card, the company requires two pieces of identification, including one
government-issued photo ID.
American Express is more vague. It requires merchants to "verify
that the customer is the card member," but its rules make no direct mention of
requiring an ID.
doesn't really have a policy on it," says Linda Sherry, director of national
priorities for Consumer Action. "If the merchant wants to ask for an ID, that's fine."
Shop clerks don't
Stephens says many store owners aren't aware of card issuer restrictions on
requiring an ID, and set store policies that violate the rules. In other cases,
employees may unwittingly break their own store's own policy by requesting an ID, out of
fear of having an unauthorized transaction slip by.
Retailer location can make a difference, too. Stephens
recalls a personal experience when a store's ID policy seemed to be applied in
a discriminatory way. "It was a supermarket chain in the San Diego area, and
when I shopped in a more affluent area I was never asked for an ID," Stephens
says. "One time I went to one of the chain stores in an area that was
socioeconomically lower than the neighborhood that I typically shopped in -- it
was a rather small purchase -- and I was asked to show ID."
Intentions are good
The whole idea behind checking a cardholder's identification is to prevent the use of
stolen credit cards. Some payment processing consultants advise their clients
to check IDs with that thought in mind.
Donna Broder, vice president and agent at Card Solutions
International in Royal Palm Beach, Fla., says it behooves retailers to
take extra steps to protect themselves against the financial risk of a
fraudulent purchase and subsequent charge-back.
"Once it goes into a charge-back ... the merchant's going to
lose, because they accepted a stolen card and didn't do their due diligence,"
Some people are offended by [being asked for an ID]. I'm
not. They're protecting you, the cardholder, as much as they're protecting themselves.
Card Solutions International
Broder gives the example of a client with a chain of mall T-shirt
shops who was getting hit with numerous charge-backs because of stolen credit
cards and card numbers. After the employees became more consistent about
checking IDs, along with signatures and holograms on customer credit cards, the
number of charge-backs declined, she says.
"Some people are offended by [being asked for an ID]. I'm
not," Broder says. "They're protecting you, the cardholder, as much as they're
While many shoppers don't mind showing their IDs, they may have concerns that
their privacy will be at risk if the personal information on those IDs gets
into the wrong hands.
"I think people are nervous that this information will be
recorded and that an employee will find it and use it for fraud or ID theft,"
Sherry says. "If you look at someone's license, you're going to know their date
of birth, their address. Then you look at their credit card and you not only
have the credit card number, but you have the secret code on the back, so you
could steal their identity or actually buy something with the credit card."
I think people are nervous that this information will be
recorded and that an employee will find it and use it for fraud or ID theft.
Stephens says customers paying with Visa or MasterCard who
want to protect their personal information can reasonably push back if a store
clerk asks for an ID. "There are
various reasons why they may not want to give out that information, and
certainly they are within their rights to refuse to do so," Stephens says. "The
only exception would be, after the card was run through the system, if there
were some sort of flag that came back to indicate that the card had been
reported stolen or there was something suspicious about the transaction."
Though Broder strongly advocates checking IDs, she says
there's no need for store clerks to record the information. "If the employer
wants to know that an employee is following their strict rules for accepting
credit cards, all they have to ask them to do is put a symbol on the [receipt]
indicating they verified ID," she says.
Visa's guidelines state that, when validating an unsigned
card, merchants should write a customer's ID serial number and expiration date
on the sales receipt "where permissible by law," while MasterCard rules say not
to record information from the cardholder's ID.
More than a dozen states have laws restricting the
recording of personal information during credit card transactions. California
led the way with the passage of the Song-Beverly Act of 1971.
In one test of the law, the Californa Supreme Court ruled that asking for a ZIP code is personally identifiable information, so merchants that do so as part of their marketing efforts risk fines under the state law.
That law andothers like it don't prohibit merchants from checking IDs. But "the
minute you record that information, either by writing it down or entering it
into an electronic system, at that point you most likely have broken the law,"
See related: Have I fallen prey to identity theft?, How to clear credit of fraudulent card account, 10 things you should know about identity theft
Published: December 2, 2013