Cardholder Identification for Credit Cards in Canada, USA

There's plenty of guidelines both from VISA and Mastercard for merchants / card acceptors. I believe the successful processing of chargebacks or representments depend on how the card acceptor followed the guidelines that were set forth by the card scheme.  You may go to the VISA website, for example or go search in the internet... ( search : card merchant chargeback guidelines )

Marite, I have downloaded the anti-fraud documentation that MasterCard, Visa and Moneris in Canada issue to merchants and there is no mention of additional ID checks.  If a retailer is suspicious of a card or cadholder they are supposed to do what is called a Code 10 Authorisation.  This involves phoning the merchant acquirer who can then contact the issuer.  The nearest I have had to recognition of additional cardholder identification is a statement from Visa that merchants are not allowed to decline a transaction because the cardholder is unable or unwilling to provide additional identification.

Hi Trevor,

http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf

check out page 28, but the entire document is useful.

I would also like to share a story about a personal experience I had with signing a card. I think that others might learn from it.

In December 2004, while I was still married, my husband and I went to Italy to go shopping. He used his corporate charge card from WACHOVIA to buy himself clothes from Zegna and Armani. He then said that he was tired and that he was going back to the hotel. He gave the corporate charge card to me and told me that I can use it since I have been working on the company that I co-founded with him without getting paid since September 2003. I continued to work on the patent of the system I invented that this company was offering - without pay...

At that time, I didn't think anything of this...

So I chose some items. As I presented the card, the salesperson noted that it was under his name (not mine). So, being that I already purchased many things from this merchant using my own cards, they knew that I wasn't a crook. So, they said ok let's just call your hotel and talk to your husband so he can give us his permission for you to use this card. They callled and my husband gave his permission.

On a second occasion in January 2005, I went back to Milan (same merchant) with another person, a friend of the family. This other person witnessed my husband giving the card to me and explicitly giving me permission to use it. When we came back to France, this other person also witnessed my giving back the card to my husband  and his asking how much I charged to it.

After our separation in February 2005, my husband called Wachovia and falsely accused me of stealing the card and forging his signature. The invoices actually show my actual signature (not his) which the merchant compared to my passport's signature. Because the invoices did not show my future ex-husband's signature (nor his name), WACHOVIA charged back the transactions to the merchant and the merchant had to absorb the entire LOSS (more than 2000 euros, I recall). I only found out about this much later when I had visited the same merchant and the merchant told me what happened. I contacted WACHOVIA and I described to them what had happened. WACHOVIA basically told me that they will not do anything and it was up to the merchant to reopen the case. The merchant told me that they had a difficult time with representing the chargeback to the issuing bank because it is true that the signature (and the name) did not match...  I sent my  written testimony and the other person's testimony to the merchant and I don't know if they did something about it. 

The issue was raised in Australia a couple of years ago when certain retailers (e.g.shops selling sports shoes) started asking people for additional ID at time of purchase. They were sick of getting all the chargebacks for stolen cards. The card schemes found out about this and voiced their opposition based on customer experience and scheme rules.  Merchants quite rightly reacted by saying that they were only trying to protect themselves from fraud/stolen cards etc.

The issue has died down but if a merchant wants to know who they are dealing with they should have the right to do so.  I can think of many occasions where a customer could be asked for ID when paying by card but the request might not be directly attributed to the actual payment transaction (e.g. paying for Hire equipment).  The schemes say merchants cant but once a merchant has been stung by a cross border stolen card sting, a common fraud scenario then they are going to do it.  Who is going to police it?      

Page 29 of the document that I linked to :

"When should you ask a cardholder for an official government ID?

Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt."

I think VISA might want to update this part of their guidelines. For example, merchants are told to check for ID cards for example for purchases of wine, liquor and beer.

The "additional cardholder identification" is in strong use in Finland. Even for grocery shopping, whenever the purchase amout reaches 50 euros, you are asked for identification. Also, the sales clerk is required to write down the last 4 digits of you national identification code from the ID. Meanwhile, the system goes online and validates the card.

The card usage policy is pretty strict here and merchants are reminded of their liability of all nonverified purchases of over 50 euros. But also merchants are awarded 150 euros for catching a stolen or misused (also "spousal" misuse) card.

Of course this all only goes for magstripe transactions. With Chip & PIN there are no identification requirements, even for larger purchases. 

In the USA some of the Consumer Goods stores (eg Sports Authority) used to ask for a ZIP Code; I used to blatantly tell them the ZIP Code of my Hotel as shown on the room key - they were happy to take it, they just needed to complete a mandatory field.

Contrary to your original question, I know that many USA Merchants progressed to getting a list from the Card Associations of which BINs represented US-issued Cards, so they could refer to them in the POS, and not bother asking foreigners for their ZIP. I've worked in a professional capacity with K-Mart, Walgreens & Wal-Mart on such a list.

Then if I'm buying any controlled drugs like Advil Cold Remedies containing pseudoephedrine (controlled because it is used to make methamphetamine aka crystal meth), I've have to provide my Passport (which doesn't contain my Address), and then provide my UK Drivers License which does (but doesn't show my photo), and then there's the consternation trying to fit a 7-character alpha-numeric UK PostCode into a 5 numeric ZIP?

Don't know if this still happens, but there used to be a 'fashion' amongst US residents to NOT actually sign their cards, but to write in the signature strip "ask to see Photo ID", thus prompting the sales clerk to ask for Drivers Licence with Photo - an interesting precaution so long as the sales clerk can be bothered to flip the card over? 

"Don't know if this still happens, but there used to be a 'fashion' amongst US residents to NOT actually sign their cards, but to write in the signature strip "ask to see Photo ID", 

Yes, you're right about some americans writing 'ask for id'.

"so long as the sales clerk can be bothered to flip the card over?"

once burnt, twice cautious.  once a chargeback is assigned to the negligence of the sales clerk, he/she will more than bother to flip the card the next time.

As I live in the USA now I probably am bext in responding to the question.  The answer is that EMV do not dicate when to ask for ID and that merchants rarely ask for ID unless the purchase is over a specific amount, again dictated by the merchant.

On the signature, rarely do cashier's look at the signature since most POS are self-service swipe so the cashier never even sees the card.  Could this be enhanced?  yes, the merchant could ask to see the card but then again the signature is done on an electronic pad so the cashier has no way to confirm.

This then leads to having the card user hand their card AND the ID to the cashier after using the self-swipe POS.  That defeats the purpose of a self-service POS and therein lies the rub.

Whether a smart card or dumb card the self-swipe POS alone will not prevent fraudluent use. You can either spend a lot of time and money to train a revolving door cadre of cashiers OR implement a technology solution that validates the used=r of that card as the owner of that card.

In the interests of full disclosure, at GenMobi Technologies, Inc. we have the solution that enables a merchant in realtime to validate the user of the card as the wnner. So I am inclined to prefer this solution.