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To sign or not to sign?

That is the question. The answer isn’t as simple as a yes or no.

In April 2018, Visa issued an official notice indicating that EMV-enabled merchants would no longer be required to capture signatures as a method of cardholder verification for transactions of any amount.  The changes applied to all EMV-enabled terminals, whether the transaction was made via chip-card “dipping”, contactless payment (ApplePay, GooglePay) or swiped.  EMV accepting merchants would also no longer be required to store transaction receipts, and card issuers would be prohibited from submitting retrieval requests for transactions originating from EMV-enabled devices.  In publishing these rules, Visa joined the other three major card brands (MC, D, Amex), who had already adopted similar guidance.  Yet despite this, businesses have several good reasons to maintain their own signature requirements. 

For one, chargeback dispute rules do not appear to be consistently adhered to by all card issuing banks.  Chargeback disputes are adjudicated by card issuing banks (think CapitalOne or Chase).  If a merchant wishes to dispute a chargeback, they must provide documentation in order to prove a transaction was legitimate.  For these issuing banks, a signed receipt is still listed as either a required or supporting piece of evidence a merchant can provide to help win a dispute.     

Secondly, merchants may want to capture a signature to ensure a cardholder’s acceptance of additional terms and conditions of a sale.  Merchants with specific refund policies or those that accept tips which adjust the original transaction amount have good reason continue to obtain signatures.  In these cases, the cardholder’s signature might be the only proof a business has that additional aspects of a sales transaction were agreed to.

Consumers may notice that some larger retailers like Costco never ask for signatures as part of their sales process.  These companies have ultimately made a business decision.  They might believe speedier checkout times are worth the tradeoff in increased risk.  Many large retailers have strong “know your customer” policies in place.   Other merchants operate in an industry with less chargeback risk, such as fast food restaurants.

Our perspective:  We believe the safest option for the majority of our card-present clients, is to continue to require cardholder signatures for the time being, unless your business was previously in a Quick Payment Service, no signature required program.  Ultimately, your business owns the risk of the sale being disputed.  If you would like more information on this topic or wish to discuss the pros and cons of No Signature for your business, please contact us at support@msp-consulting.net.

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