Should Small Companies Require Receipt Signatures?

Card networks now do not require signature verification. What does this imply in your small enterprise?

  • Gathering receipt signatures is elective if in case you have an EMV-compliant bank card reader.
  • EMV is simpler than receipt signatures for deterring bank card fraud. Since 2015, EMV-compliant retailers have seen counterfeit fraud drop 80%.
  • Receipt signatures should be helpful for some small companies, reminiscent of eating places that use receipts to gather suggestions or service professionals that use them as proof of approval for work orders or for acceptance of accomplished work.
  • This text is for small enterprise house owners exploring options to asking clients for signatures on bank card and debit card transactions.


Many retailers breathed a sigh of reduction when Visa, Mastercard, Uncover, and American Specific introduced that they had been now not accumulating signatures on bank card or debit card transactions. Nonetheless, not each small enterprise was prepared for the change. Are you ready to make the swap? Right here, we’ll go into elements about why buyer signatures had been required in the first place, the present safety requirements that change the signature, and sensible suggestions that cardholders can implement to maintain their playing cards out of the mistaken fingers.

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Why had been buyer signatures required?

For many years, bank card firms relied on receipt signatures to forestall fraud. They required retailers to gather and retail buyer signatures so that if a transaction was disputed, the service provider might produce a signed receipt proving the shopper was bodily within the retailer and personally authorized the acquisition. Without this proof, retailers had been on the hook for losses as a consequence of chargebacks. They had been additionally liable if the signature on the receipt did not match the signature on file or on the cardboard.

In 2015, bank card firms started issuing chip playing cards to customers and shifted legal responsibility for counterfeit fraud occurring on the level of sale to retailers who hadn’t but up to date their processing {hardware} to incorporate EMV-compliant card readers. This laid the groundwork to shift away from signatures since chip playing cards and digital wallets have superior antifraud applied sciences to authenticate transactions – reminiscent of tokenization and biometrics – that make bank card signature necessities out of date.

Key takeaway: For many years, signatures had been saved on file to confirm card transactions, however developments in antifraud applied sciences have made the following out of date.

How no signature transactions work

No signature transactions make the most of alternative routes to verifying buyer identification, such because the instruments in digital wallets or embedded in chip playing cards, to make sure that the shopper is utilizing the cardboard in a genuine, non-fraudulent method. The chips and expertise used to authenticate the consumer are named Europay, Mastercard, and Visa – or EMV for brief – and are taken into account the gold world normal for verifying a lot of these transactions.

In 2018, the most important bank card firms – American Specific, Uncover, Mastercard, and Visa – lastly stopped requiring EMV-compliant retailers to gather signatures for credit score and debit card purchases. Giant retailers, reminiscent of Walmart and Goal applauded the choice, noting that eradicating this step helps their velocity up the checkout course and eliminates the requirement to save lots of receipts, and the price of storing them safely.

The bank card networks observe that the transfer to signature-free transactions is elective, so if you happen to nonetheless want to gather signatures for bank card purchases for your small business, chances are you’ll proceed to take action. This is how no-signature bank card transactions work for every of the massive 4 card networks:

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American Express

  • Introduced in December 2017 that AmEx card transactions after April 2018 no longer require a signature
  • Applies to all retailers who settle for American Specific worldwide
  • American Specific says that in some jurisdictions, retailers could also be legally required to proceed to accumulate signatures. It additionally states that this system is elective, and retailers who want to proceed to accumulate signatures might accomplish that


  • Applies to credit score and debit card transactions in North America, together with the U.S., Canada, Mexico, and the Caribbean
  • Uncover says that some retailers might replace their point-of-sale methods if they now not want to require buyer signatures


  • Applies to credit score and debit transactions worldwide


  • Applies to all EMV-enabled retailers in North America
  • Visa says the signature requirement is elective for EMV-enabled retailers. If you have not but upgraded your system to just accept chip playing cards, you will proceed to require signatures

Key takeaway: No signature transactions use EMV requirements to confirm the cardholder’s identification as a substitute for matching signatures within the occasion of a dispute. The 4 main bank cards all dropped signature necessities in 2018, significantly in North America.

Ought your small business cease asking clients to signal bank card receipts?

Even though giant retailers rapidly dropped their bank card signature necessities following the cardboard manufacturersbulletins, some retailers are persevering with gathering buyer signatures on debit and bank card transactions.

Earlier than you determine which possibility makes essentially the most sense for your small business, listed here are several elements you must think about.

1. Is your small business EMV compliant?

If you have not but up to date your bank card readers to EMV-compliant fashions, you are not eligible to skip signature verification for Visa and Uncover transactions.

Visa reviews that, as of September 2018, 68% of U.S. storefronts have embraced EMV technology – however, that leaves 32% which have but to improve their methods. If you happen to‘re nonetheless holding out, you must converse together with your bank card processor about updating your card reader. Along with enabling you to cease accumulating receipt signatures, it considerably lowers your risk of experiencing counterfeit bank card fraud on the level of sale.

Regardless of the shortage of a signature requirement for the previous 12 months, EMV expertise has been extremely efficient towards fraud. Visa reported that, as of September 2018, EMV-compliant retailers have seen counterfeit fraud drop 80% since September 2015. Greater than 3.1 million service provider areas now settle for chip playing cards, and greater than 511 million Visa chip playing cards are in circulation within the U.S.

2. Does your POS system provide the possibility of eliminating signature authorization for bank card transactions?

If you have already got an EMV-compliant credit card terminal or card reader, the subsequent step is to check with your POS system provider to seek out out if the software program has been up to date to take away this step from the checkout course.

Many POS suppliers have up to date their methods to permit retailers to decide on whether or not or not they wish to proceed to require clients to signal for purchases. Some, like Square, provide you with multiple receipt signature options. You possibly can select to all the time require receipt signatures, by no means require receipt signatures or solely require receipt signatures for transactions over $25.

Editor observes: In search of the precise bank card processor for your small business? Fill out the under questionnaire to have our vendor companions contact you about your wants.

3. Does your small business use signatures for proof of approval?

If your small business makes use of receipt signatures for different functions, reminiscent of approving a piece order, accepting accomplished work, or agreeing to a gross sales coverage (reminiscent of “all gross sales are remaining“), chances are you’ll hold accumulating receipt signatures.

Writing for 360 Payments, Lisa Coyle says, “Even if you happen to determine that you’re able to cast off them in your EMV bank card receipts, chances are you’ll discover worth in including a signature requirement to your contract or work order. Signatures are good for way more than authorizing a bank card transaction.”

Eating places are additionally more likely to proceed to require receipt signatures to encourage tipping. If, as an illustration, your small business is a sit-down restaurant that does not have a pay-at-the-table possibility that enables patrons to add the tip earlier than utilizing a bank card to pay the invoice, it most likely does not make sense to forgo receipt signatures. It is much less awkward to proceed to ask clients to signal paper receipts that have tip prompts than asking them the tip quantity they need to be added to their invoice earlier than you cost their bank cards.

4. Are you nervous about chargebacks or bank card fraud?

Some retailers which have chip card readers in place and proceed to request signatures have safety considerations about forgoing signature verification. These considerations aren’t new. When the most important bank card networks introduced EMV compliance necessities (the October 2015 legal responsibility shift), critics were frightened that the chip-and-sign course was much less safe than the chip-and-PIN course utilized in Europe.

“Card networks ought to have adopted the worldwide normal PIN requirement as a part of the U.S. EMV rollout,” mentioned Monica Eaton-Cardone, COO of Chargebacks911. “With no signature or PIN required, it is simpler for fraudsters to make use of misplaced or stolen playing cards at point-of-sale terminals and more durable for retailers to defend against card-present chargebacks.”

The rationale that bank card networks were determined to not have a PIN requirement was as a result of they predicted that it might trigger an excessive amount of friction at checkout. They’d witnessed the sluggish adoption of contactless funds like Apple Pay and Google Pay and noticed how reluctant Individuals are to undertake new cost expertise and processes – even once they‘re enhancements.

Take into account the irritation that customers and retailers expressed when chip card transactions took several extra seconds to finish than swipe transactions. Then think about the frustration of buyers who have not ever used a PIN for bank card transactions – particularly those that then neglect their new PIN (and the exasperation of the consumers ready in line behind them and the cashier who’s been serving to clients be taught the brand new course of all day long for weeks).

Mastercard – which has one essentially the most lenient no-signature insurance policies – says that earlier than the no-signature requirement went into impact, more than 80% of in-store Mastercard transactions did not require a signature; moreover, eradicating the signature requirement hasn’t negatively impacted safety due to its anti-fraud expertise. It has several safety layers in place, together with an early detection system that forestalls assaults by proactively alerting issuers when playing cards and accounts have been uncovered to safety incidents and information breaches. Likewise, the opposite card networks even have superior fraud-protection measures in place.

Key takeaway: If you wish to cease asking clients for his or her signature on bank card or debit card transactions, it’s necessary to make sure your card reader or POS system is supplied to deal with EMV transactions. If your small business nonetheless depends on signatures for proof of approval or if you happen to’re nervous about an uptick in bank card fraud, chances are you’ll proceed to accumulate signatures.

Must you signal your bank cards?

Now that receipt signature are not required, you and your clients are likely to be questioning what to do about that signature panel on the again of bank cards. Ought to it’s signed? For now, sure, as a lot of the card networks nonetheless require cardholder bank card signatures and observe that the playing cards aren’t legitimate without them.

The exception to this rule is Mastercard. In October 2018, Mastercard introduced that it now not requires the cardholder to signal the signature panel on the again of the cardboard. Additionally, as of April 2019, card issuers worldwide are now not required to incorporate a signature panel on Mastercard credit score and debit playing cards.

What concerning the magnetic stripe? Ultimately, bank cards could also be issued without it, however, that isn’t likely to be anytime soon.

Methods to hold bank card info secure

Though EMV compliant methods are typically thought to be safe, you and your clients might want to take further precautions to make sure account security. Listed below are some regular basis suggestions for cardholders:

  • Don’t let others use your bank card. For somebody to make a purchase order on your behalf, add them as a certified consumer to your bank card account. This additionally ensures no hold-ups on the enterprise, the place personnel can simply confirm the identification of the particular person utilizing the cardboard if obligatory.
  • Don’t depart your card unattended. A misplaced or stolen card will be walked into any retailer, the place somebody can try to make use of it and create a headache for retailers and the shoppers alike.
  • Monitor your online accounts. Any fraudulent expenses ought to be dropped at the eye of the service provider and the corporate that issued your credit score or debit card.

Key takeaway: It’s nonetheless a good follow to signal the again of your debit or bank card, even when it’s now not required, as considered one of several private security measures you may take to maintain your credit score or debit card safe.

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