When Does Credit Card Processing Require a Signature?

Have you made any credit card purchases recently where the merchant did not require you to sign the receipt? Did you wonder why? Maybe you thought it was an oversight on their part, but chances are it was a QSR (quick sale retail), a credit card processing trend that has applications in certain sales situations.

It all began back in 2003, the year credit card giants Visa® and MasterCard® began allowing merchants to skip collecting signatures for charges of less than $25 without any liability for chargebacks. The change was welcomed by retailers that deal primarily in small-ticket sales, like fast food vendors, who are interested in speeding up the swipe/approve/sign process that completes each sale. Processing more customers in less time is efficient and makes more sales possible.

Additionally, merchant services providers will allow their member merchants some flexibility when it comes to getting cardholders’ signatures, but it comes at a price. That’s because providers set their rates and fees based on a number of variables, with risk being a primary consideration.

For example, a card-present transaction that’s conducted face to face with the cardholder and yields a signature is less risky than a card-not-present (CNP) transaction, such as an online sale. A sale involving a PIN debit card is considered less risky than one with a signature debit card, the reasoning being that it’s easier for a fraudster to sign someone else’s name than to guess the personal identification number needed to complete the transaction. An online sale that requires the shopper to enter the CVV, or verification code, processes for less than one that doesn’t.

As a service to their merchants, some providers will allow them to process credit card transactions for small amounts (typically under $25, but occasionally higher) without obtaining the cardholder’s signature. However, the merchant will pay a slightly higher processing fee for those transactions to offset the increased risk that the transaction could be fraudulent.

Many merchants will pay the higher processing fee, figuring that by speeding up the process they’ll make more sales that will offset the difference. For high-volume, low-ticket merchants, this way of thinking is probably cost efficient; for others, it may not be and they can continue to collect signatures on all credit card sales, if they so wish.

Of course, for the cost conscious among us, there are other ways to reduce your credit card processing costs. The first is to work closely with a reputable, experienced merchant services provider like Merchant Express®. We’ve worked with more than 500,000 merchants over more than a dozen years, so we have the expertise to set you up with the right merchant account package for your business and credit card processing needs at a cost that won’t break your budget. And, as an added bonus, you’ll be equipped with the best in high tech products and services, and you’ll be able to count on top-notch customer service and support 24/7/365.

Whether you’re in the market for traditional POS retail, wireless, mobile, MOTO or online credit card processing, Merchant Express has the right solution for you. Talk to us today!