Why Some Businesses Require You to Sign Your Credit Card Receipt and Others Don’t

By Daniel Miessler on December 9th, 2008: Tagged as Information Security

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Many people wonder why some businesses require them to sign a receipt when they pay with a credit card, while others just give a receipt immediately. What’s the difference? How can a business get paid for a charge if the customer didn’t sign?

The answer is pretty simple: banks charge businesses different amounts of money for credit card transactions based on a number of variables, e.g. whether or not a signature was given at the time of sale, whether the amount of the sale was over a certain amount, or for online purchases whether the CVV number was given.

This is because banks are responsible for fraudulent charges; they charge businesses different prices for transactions based on the chances of that payment type being fraudulent. A higher number of transactions without signatures are fraudulent, so banks charge businesses less per transaction if they gather a signature. And many banks adjust their fees for non-signed transactions based on cost as well, so you might not have to sign for something under $25, for example, but have to sign for anything over that amount.

And it’s the same with online purchases. Some merchants require the CVV, and others don’t. It’s up to the business; if they want to pay less for credit card business transactions then they’ll have to bother their customer for a CVV on each purchase. The bank charges them less because if someone submits a CVV there’s a higher chance they have the card, and therefore a lower chance that the number has been stolen separately.

This is why places like drive-thrus don’t usually require a signature; their business models require that customers move through quickly, and thus they are willing to pay the bank more per credit card payment in order to make that happen. But if you’re in a sit-down restaurant and they already have you there, they’re going to ask for a signature so they get charged less by the bank. ::

  • icepyro

    I can’t verify the online business/cvv thing, but just thought I’d shed some more light on the physical world (at least where I live). The drive-thrus and and convenient stores still gather a signature if the purchase was more than a certain amount (depending on store, usually $15-25). Basically I don’t have to sign if I go alone but sometimes friends come along and just give me money afterward and I pay with my card and have to sign. I guess keeping the line moving is worth more than the difference in fee on purchases small enough, but if one person buys $25 worth of food in a drive-thru, then it’s going to take longer to prep the food anyways so might as well save a penny and sign.

  • icepyro

    I can’t verify the online business/cvv thing, but just thought I’d shed some more light on the physical world (at least where I live). The drive-thrus and and convenient stores still gather a signature if the purchase was more than a certain amount (depending on store, usually $15-25). Basically I don’t have to sign if I go alone but sometimes friends come along and just give me money afterward and I pay with my card and have to sign. I guess keeping the line moving is worth more than the difference in fee on purchases small enough, but if one person buys $25 worth of food in a drive-thru, then it’s going to take longer to prep the food anyways so might as well save a penny and sign.

  • CarlM

    Yep .. recently I had my first experience of using a credit card at a cash register and not having to sign. I asked and was told that they (this particular store) didn’t need the signature if the total was under $25. I have no idea how long this practice has been going on since I don’t usually use a credit card for that sort of purchase.

  • Carl M

    Yep .. recently I had my first experience of using a credit card at a cash register and not having to sign. I asked and was told that they (this particular store) didn’t need the signature if the total was under $25. I have no idea how long this practice has been going on since I don’t usually use a credit card for that sort of purchase.

  • http://westwood.fortunecity.com/dolce/636/cooperatistation.html TIMM

    there is something to the timing of the charge that also changes the nature of fast-food charges to the run of the mill store charges.

    it’s been explained to me that fast food charges are run first, and sometimes retroactively to the other charges, especially over the weekend when the bank can only verify the sum was in your credit or bank account.

    so, there’s a dymanic unfolding.

    -=T=-

  • http://westwood.fortunecity.com/dolce/636/cooperatistation.html TIMM

    there is something to the timing of the charge that also changes the nature of fast-food charges to the run of the mill store charges.

    it’s been explained to me that fast food charges are run first, and sometimes retroactively to the other charges, especially over the weekend when the bank can only verify the sum was in your credit or bank account.

    so, there’s a dymanic unfolding.

    -=T=-

  • randy

    @carl: It’s been going on in the Chicago area for at least 3 years. I remember not having to sign for fast food during my senior year of college.

  • randy

    @carl: It’s been going on in the Chicago area for at least 3 years. I remember not having to sign for fast food during my senior year of college.

  • Mohaka

    Although getting a signature is effective for a sit-down restaurant where you must factor in the tip into your meal bill (and check later to make sure it was properly charged) it is trivial in preventing fraudulent transactions. There are few methods that rely on an actual security mechanism to prevent fraud, other than a debit card PIN number. For the past 4 years my credit card has been signed on the back with “See ID”, and maybe once a month someone actually asks to see my ID. Its really sad. There's a good chance that the data the banks are using for these merchant charge differentials are at least 5 years out of date…..


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