Many merchants breathed a sigh of relief when Visa, Mastercard, Discover and American Express announced they were no longer collecting signatures on credit card or debit card transactions due to the advent of EMV technology. In this guide, we’ll go into detail about what a credit card receipt is, what information is included on a receipt, why customer signatures were required in the first place, the security standards that replace the signature, and practical tips that cardholders can implement to keep their cards out of the wrong hands.
A credit card receipt is a printout or email detailing the components of a transaction. Vendors, retailers and merchants may provide customers with a credit card receipt, which is proof of transaction for payment of goods and services. The vendor’s POS system generates a receipt and prints it for the payer.
Since consumer privacy is part of the Fair and Accurate Credit Transactions Act, certain information must be present on a credit card receipt.
Keeping credit card receipts can be advantageous for customers and businesses. There are several reasons a customer may keep receipts:
Keep in mind that businesses act not only as a supplier, but also as a consumer when they purchase products. The reasons a consumer may keep receipts also apply to a business owner when it acts as a consumer. Here are additional reasons a business may keep receipts:
For decades, credit card companies relied on receipt signatures to prevent fraud. They required merchants to collect and store customer signatures so that if a transaction was disputed, the merchant could produce a signed receipt proving the customer was physically in the store and personally approved the purchase. Without this proof, merchants were on the hook for losses due to chargebacks. They were also liable if the signature on the receipt didn’t match the signature on file or on the card. With the advancement of EMV-compliant card readers, chip readers have replaced customer signatures.
In 2015, credit card companies began issuing chip cards to consumers. This shifted liability for counterfeit fraud occurring at the point of sale to merchants who hadn’t yet upgraded to EMV-compliant card readers. This laid the groundwork to shift away from signatures, since chip cards and digital wallets have advanced anti-fraud technologies – such as tokenization and biometrics – to authenticate transactions. This technology renders credit card signature requirements obsolete.
For decades, signatures were kept on file to verify card transactions, but advancements in anti-fraud technologies have made the practice obsolete.
Prior to EMV technology, signing a receipt was the standard for authenticating a credit card purchase. As of June 2021, Visa, Discover, Mastercard and American Express eliminated customer signatures on all credit card purchases. Signature requirements did not prevent fraud and the process wasn’t as secure. Credit card companies found a more secure way to protect the cardholder from fraud or inauthentic transactions while speeding up the in-store checkout process. Here are three things you should know about the process of no-signature transactions:
In 2018, the big four credit card companies allowed EMV-compliant merchants to expedite signature-free checkout. Big-box retailers such as Walmart and Target applauded the decision. A speedier checkout process, eliminating the need to save receipts and using resources to store receipts, factored into the adoption of EMV.
EMV is not just a technology, but a brand. Europay, Mastercard, and Visa, known collectively as EMV, is a global brand that started in the 1990s, with the purpose of eliminating credit card fraud.
Even though large retailers quickly dropped their credit card signature requirements following the card brands’ announcements, some merchants continue to collect customer signatures on debit and credit card transactions. [Learn more about accepting credit card payments by reading our guide.]
Before you decide which option makes the most sense for your business, here are a few factors to consider.
If you haven’t yet updated your credit card readers to EMV-compliant models, you aren’t eligible to skip signature verification for Visa and Discover transactions.
Visa reports that, as of March 2019, 75% of U.S. storefronts have embraced EMV technology. That leaves 25% that have yet to upgrade their systems. If you’re still holding out on EMV technology, speak with your credit card processor about updating your card reader. In addition to enabling you to stop collecting receipt signatures, it significantly lowers your risk of counterfeit credit card fraud at the point of sale.
Despite the lack of a signature requirement for the past year, EMV technology has been effective against fraud. Visa reports that, as of September 2018, EMV-compliant merchants have seen counterfeit fraud drop 76% since September 2015. EMV has increased in popularity for merchants and consumers. Currently, EMV accounts for 86.1% of in-store transactions. [Interested in the best credit card processing for your business? Check out our reviews and top picks.]
If your business uses receipt signatures for other purposes, such as approving a work order, accepting completed work, or agreeing to a sales policy (such as “all sales are final”), you may need to keep collecting receipt signatures.
Writing for 360 Payments, Lisa Coyle says, “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.”
Restaurants are also likely to continue requiring receipt signatures to encourage tipping. If, for instance, your business is a sit-down restaurant that doesn’t have a pay-at-the-table option allowing patrons to add a tip before paying the bill with a card, it probably doesn’t make sense to forgo receipt signatures. It’s less awkward to ask customers to sign paper receipts with tip prompts than to ask them the amount they want to tip before you charge their credit cards.
All merchants may be nervous about chargebacks or credit card fraud. Merchants who have adopted EMV-compliant technologies should be far less concerned. At the inception of EMV-compliant technology in 2015, critics worried the chip-and-sign process was less secure than the chip-and-PIN. Unlike magnetic-stripe cards, which originated in the 1960s and are borderline obsolete today, chip cards are nearly impossible to duplicate. This reduces credit card fraud and increases authenticity. Likewise, because of EMV’s heightened anti-fraud technology and increased security, merchants have less liability for a chargeback.
If you want to stop asking customers for their signature on credit card or debit card transactions, you should ensure your card reader or POS system is equipped to handle EMV transactions.
Although the big four credit card companies no longer require a cardholder to sign the back of a card, since EMV-compliant systems are generally regarded as secure, you and your customers may wish to take extra precautions to ensure account safety. Here are some everyday tips for cardholders:
It’s still good practice to sign the back of your debit or credit card, even if it’s no longer required, as one of several personal safety measures you can take to keep your card secure.
Trish Petak and Stella Morrison contributed to the writing and research in this article.