In this day of identity theft and concerns about security I find it stunning that you don’t need to sign your credit card at a store. On Sunday Kim and I were at Home Depot getting supplies for our bathroom painting and repair fest. We buzzed through the checkout with around $50 worth of stuff, swiped the credit card and then waited to sign. The checkout clerk said to us “Oh, you don’t need to sign anymore.” I was shocked and confused. Walking out to the car I simply muttered that this woman has just given me my next blog post because I need to find out the scoop behind this supposed new rule.
Sure enough, as I googled this topic I was led to the latest and greatest on this new no-signature trend. At CreditCards.com they go on to say:
In order to encourage the purchase of small items at a faster pace, credit card companies are increasingly permitting consumers to simply swipe their card to pay for items under $25 at drug stores, fast food eateries, convenience stores, and pharmacies — no signature required. Credit card companies hope that these no-signature transactions will speed up store checkouts and encourage more consumers to make everyday purchases with their credit cards.
Here’s the hidden good news — you can buy more little stuff without noticing so the retailers’ pockets get fatter while you slip deeper into debt if you’re not careful.
Back to my story… This article seems to confirm the no signature trend, but our purchase was over $25, what gives? So I did a little more digging.
Visa has a whole new card called Contactless that takes the whole no signature thing a bit further. No swiping, no signing, just the need to hold it up to a secure reader. Once again, though, I see that $25 limit thrown around (which I might add is very similar to the under $25 no receipt required IRS rule for minor business deductions if my mind recalls correctly). Once again I wonder — am I missing something or did Home Depot pass on a signature when it really should’ve required one? I did a number of Google searches, but couldn’t find a single article talking about purchases over $25 not requiring a signature. So, I’m stumped.
My initial take on the whole thing is that speed and convenience is nice, but what happened to safeguarding your financial information? It doesn’t seem all that long ago that credit card companies were singing the praises of cards with photos and additional security features. Now, we’ve changed our tune to swipe and go. While credit card companies are great for purchasing protection and if you’re astute you’ll notice if something goes awry on your account, why invite trouble? How long does a signature or PIN verification really take? Of course one could argue that store clerks never look at your signature on your card and compare it to what you wrote anyway.
Another interesting security concern comes with the new contactless cards that use RFID technology. In October the NY Times did an article on these security concerns called “Researchers See Privacy Pitfalls in No-Swipe Credit Cards”. While all the companies claim the use of high level encryption for such data transmissions, that may not always be the case.
But in tests on 20 cards from Visa, MasterCard and American Express, the researchers here found that the cardholder’s name and other data was being transmitted without encryption and in plain text. They could skim and store the information from a card with a device the size of a couple of paperback books, which they cobbled together from readily available computer and radio components for $150.
Now that is not too comforting, is it? As a consultant with a background in technology, I know that even though information may float out there unencrypted, having someone actually obtain and abuse that information is still several steps removed. However, it does beg the question — who is policing all this? And, are we even aware what is going on behind the scenes of our financial transactions?
I’m not sure what the bottom line is on this whole trend, and most certainly have no idea why I wasn’t required to sign for my > $25 purchase at Home Depot. However, it looks like the speed and convenience trend continues to outpace security and is here to stay.
What do you think? Have you experienced this new signature-less trend? Share your thoughts and experiences in the comments…