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UPDATE – No Signature Required! What?

UPDATE – As promised, we wanted to come back and update you on more of the details that have come to light since No Signature Required has gone into effect.

A number of our customers have been seeing an increase in the number of questions regarding the No Signature Required rules recently announced by all the card brands. As usual, each brand has a slightly different nuance to their position and unfortunately, they can also be as clear as mud with their ambiguous verbiage.

The bottom line is that No Signature Required is optional, and if a merchant is uncomfortable without a signature, it is their right to request one. Here are the main talking points summarized as best as possible.

  • As of 4/14/2018, obtaining a signature from a customer on chip/EMV transactions will be optional and at the discretion of the merchant. Chargebacks for signature related issues (signature not obtained, not matching the back of the card, etc.) will no longer be available.
  • If your business requires customers to sign for additional Terms & Conditions, it is suggested that you may want to continue requiring a signature. For example, merchants with limited refund policies, those in the travel industry or those who accept tips may want to continue accepting signatures as per usual.
  • If a merchant chooses not to require a signature, it is recommended that the merchant modify existing text to clearly state the merchant’s refund policy on the customer’s receipt, either by paper or email, and offered to the customer in a face-to-face transaction. This will govern your procedure in the event of a dispute.
  • There are some nuances distinct to each card brand and related to whether signature is required on chip or no chip transactions. The safest approach is to continue to obtain a signature if the transaction is not chip based.

As usual, we will see point-of-sale software for terminals and other POS systems catch up to this change over time and automate the No Signature Required process if a merchant so chooses. If you have further questions, please don’t hesitate to contact us.

Original post below.

ORIGINAL POST – Late last year, MasterCard, American Express and Discover Card announced that starting April 2018, they would eliminate the requirement for merchants to collect signatures for all purchases at the point-of-sale. They pointed out that the combination of secure networks and new digital payment methods (including chip, tokenization, biometrics and other fraud capabilities) have advanced to the point where signatures are no longer necessary to fight fraud.

Visa followed suit early this year but specified that signatures will no longer be required when a Visa EMV card was being used at the point-of-sale.

What does that mean for you? MasterCard has pointed out that it expects this will speed up the checkout process and enhance the customer experience. However, it will take some time for the various point-of-sale systems and software to eliminate the signature line on the receipt. In the meantime, MasterCard has suggested that if a merchant is more comfortable obtaining a signature, they still can. A signature will be optional but as of April 2018, it will no longer be a requirement.

Dan DeBraal

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