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Should you write 'See ID,' not sign, back of credit cards?

Merchants aren't supposed to accept unsigned cards, but few check

By Bobbi Dempsey

Credit and debit cardholders who believe that writing "See ID" or "Check ID" on the signature panel of their cards will help prevent fraud should think again. According to Visa and MasterCard, when a merchant sees "See ID" on the back of a card instead of a signature, that card should not be processed. But as merchants continue to implement technology where the customer does her own card swiping, well, who is really checking?

Should you write "See ID" on your credit card?
Confusion reigns with 'See ID'

Many consumers are confused about whether the "See ID" practice is a savvy move or a waste of time. That's understandable, given that there's conflicting advice and information about the topic. While major card issuers are unified in their stance that the card isn't valid without a signature, even they themselves give out misleading information. For example, in a Capital One "Identity Theft Guide for Victims," one piece of advice to consumers wanting to prevent identity theft is: "Sign your credit card or write that the merchant must
'check ID' on the back of the card."

Complicating matters even further, a merchant isn't required to check identification unless the purchase involves alcohol, cigarettes or gambling cash (for age restrictions).

But some consumers just feel better doing it their way. For example, Lynn McMonigal never signs her credit cards. Instead, she just writes "See ID" on the signature panel on the back of the card. It's a habit dating back to 1994, when one of her college friends did an experiment involving credit cards. "She borrowed her roommate, Jennifer's, card and went shopping -- with Jennifer's permission.  At every store, she signed her own name, Paula, even though she used a card with Jennifer's name on it. She went to six places. Only two of them even asked for ID.  One saw Paula's ID and still allowed her to make the purchase. The other didn't let her buy anything. I figured if no one was checking anyway, what really would be the point of signing my cards anyway?"

McMonigal -- a stay-at-home mom from Jackson, Miss., -- isn't alone. The practice of writing "Check ID" or "See ID" is very common, and most likely became the stuff of urban legend in reaction to increased proliferation of credit card and identity theft. As a result, these consumers are adamant in their belief that this is a smart move, and aren't eager to change their ways. 

'See ID' against Visa, MasterCard rules
Chris Monteiro, spokesman for MasterCard, says, "Technically, a MasterCard is not valid unless signed by the authorized cardholder. If a person has not signed his card, the merchant technically should not complete the transaction." The merchant can only complete the transaction on an unsigned card if the cardholder signs the card in front of the employee and then produces valid identification proving their identity, Monteiro says. The cardholder then has nothing to gain by refusing to write anything but his signature on the signature panel.

Visa's policy is nearly identical to MasterCard's. Visa covers this topic in its "Rules for Merchants" handbook. There is a section entitled "See ID," which says: "See ID or Check for ID is not a valid substitute for a signature. The customer must sign the card, in your presence." And if the customer refuses? "A refusal to sign means the card is still invalid and cannot be accepted." The handbook then reminds merchants that if they ignore this mandate and accept an unsigned card anyway, they risk financial liability should the cardholder later dispute the charge.

In another section, the Visa handbook also prohibits merchants from demanding identification as a condition of the sale -- so if the merchant does accept your unsigned card, they technically cannot force you to show identification. The converse is true for signed cards as well: A merchant cannot refuse a transaction if you choose not to produce identification, and a merchant does not have to ask for additional identification when presented a signed credit card.

What that signature really means
The card companies remind customers that the signature panel isn't just for verifying the signature. It's also used to validate the contract you have with the credit card company. By signing, you confirm that you agree to their terms. And even though you may choose not to sign the card but use it anyway, you still are bound to the terms and agreements set forth by the issuer.

For customers who still want to stick to their "See ID" ways, Nessa Feddis, vice president and senior counsel at the American Bankers Association, cites several downsides to this tactic. If you want to charge something and don't happen to have your identification with you, for example, you'll be out of luck. Forcing a merchant to check your identification will also slow down your transaction. Plus, there's the possibility that crooks who get their hands on your signature-free card could just sign it in front of a clerk, thereby making the card appear valid -- while also ensuring that the signature on the card will now match their own signature on the receipt. A solution offered to the extra-cautious: Sign the card AND write "See ID" on the signature panel. It won't guarantee your credit card won't ever be used by thieves, but if it makes you feel better, there's no harm in it.

Dan Clements, vice president of Affinion Group Inc., which specializes in helping companies secure personal data, agrees with the dual protection method. "It's a good practice to put 'Check ID' after your signature on the back of the credit card. This makes it harder for an in-store identity thief to run up charges on your credit or debit card. Even though you have limited liability on credit cards, maybe a bit more on debit, you can possibly avoid the hassle of filling out bank affidavit's to dispute fraudulent charges. These charges have been known to affect credit scores, so avoiding them is key."

Reality vs. practice
In reality, though, the issue of whether the card is signed is often irrelevant. Many cardholders rarely notice anyone even looking at the signature panel anymore. An increasing number of retail stores require customers to swipe their own cards through a machine, making it less likely for store employees to check the card's signature panel. In places such as gas stations -- where customers often swipe the card themselves at the pump and never interact with an employee -- nobody would ever know what's on the back of the card. In addition, Visa and MasterCard have both relaxed their rules about requiring signatures on receipts for minor purchases, meaning the person using the card might not need to sign anything at all.

However, a few businesses remain strict about not accepting cards with a "See ID" notation. Perhaps the largest is the U.S. Postal Service, which now has posters displayed on its counters alerting customers that these unsigned cards will not be accepted. That's the only place where "See ID" advocate Lynn McMonigal (see sidebar) has had a problem having her card accepted. She dodges it by writing a check . 

How likely is it that a merchant will in fact check the signature on your card? That often depends on whether the store in question is a hot spot for thieves.

"Somebody at the Starbucks counter probably won't be worried about fraud, because it's rare that fraudulent charges would happen there," Feddis says. "It's much more likely at, say, electronics stores. And those retailers are generally very diligent about checking cards."

It may be an inconvenience, but Feddis points out that the stores are ultimately just trying to protect the consumer. "Remember, merchants don't like fraud, either. They want to prevent it as much as they possibly can," she says.

There does seem to be one thing everyone agrees on: The worst thing you can do is leave the signature panel completely blank, with nothing at all written there. In essence, that's like giving a crook a blank check. But for those cardholders who are still reluctant to sign their cards, Feddis says there's no need to worry about fraud-related losses, since they are usually covered by the issuers' protection policies. "Consumers are protected for any fraudulent use and won't be responsible for unauthorized charges anyway," says Feddis.

See related: Anatomy of a credit card

Published: September 12, 2008



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