On April 1, 2018, the payments industry said goodbye, at least in part, to an old friend. Businesses are no longer required to obtain signatures for chip card and contactless transactions, ending a practice that had become a punchline for businesses and consumers alike. We’ve written a bit about this topic in the past, but now it’s time to take a deep dive. Let’s learn what this change means for your business – and whether you should consider requiring signatures anyway.
Why It’s Time for Signatures to Take a Bow
The signature on credit card receipts doesn’t do a whole lot to reduce the instance of fraud, highlighted by the fact that consumers have scribbled smiley faces or incomprehensible nonsense on signature lines for years. Many merchants stopped checking receipt signatures against the cards long ago, preferring to accelerate the speed of checkout lines rather than apply an extra layer of chargeback protection. Merchants of all sizes can, of course, still require identification from the customer before agreeing to process a transaction, so the signature matters significantly less.
Merchants will likely celebrate the demise of the signature requirement. With chip cards especially, signatures do little to add extra security to EMV transactions and serve to only to slow down the checkout process. Swiped cards are a different matter – the signature requirement has not been lifted for them. While a signed credit card receipt isn’t a great fraud deterrent, it’s better than nothing.
Misgivings About Getting Rid of Signatures
At 360 Payments, we will be the first to admit that signatures don’t do a whole lot to deter fraud. There are more effective measures, such as checking identification, that merchants can employ to forestall chargebacks and other fraud issues. But before you get rid of signatures entirely for EMV transactions, think about the other purposes that they serve. You may find there’s value in obtaining a signature even if it’s not strictly required for a credit card transaction. For example, many chargebacks arise because of issues with a company’s “all sales final” policy. Ensuring that a customer reads, understands, and accepts this policy is a good use of a signature on a contract or work order even if it’s not needed on a credit card receipt. Furthermore, what about customers that complain that the merchandise or work performed is not up to their specifications and demand a refund? A signature on the original contract or agreement can avoid a world of hurt afterward.
Some industries should be especially wary of getting rid of signatures entirely, particularly the automotive and healthcare fields. When a customer signs a work order at an auto repair shop, they agree to much more than just the credit card transaction. They also indicate that the work is completed satisfactorily, that the car has not been damaged during the course of the repair, and that there are no other concerns with the work. Similar issues exist in the healthcare industry, and doctors and medical centers should carefully consider whether signatures do more to protect patients and healthcare professionals than they do to increase processing times.
Bottom Line: Think Carefully Before Abandoning Signatures
There are certainly pros and cons to removing signatures. Even if you decide that you are ready to do away with them on your EMV credit card receipts, you may find value in adding a signature requirement to your contract or work order. Signatures are good for much more than authorizing a credit card transaction. 360 Payments can help you determine whether or not removing the credit card signature requirement is a good idea for your business. Give us a call at 1-855-360-0360 or drop us a line on our website and we’ll help you out.
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