Requiring Identification with Credit Cards

While in shopping a few days ago, I overheard a customer in line ahead of  me complaining about the inconvenience of being asked for supplemental identification when making a large purchase with a Credit Card .

This made me reflect back to when I first started working in retailing as a teenager....

Just to give you an idea how much all of this has changed since the 1970's... At that time, the company that I worked for required the following to be done when a customer wanted to use a Credit Card:

• A minimum of (2) Two forms of supplemental identification. Acceptable documents were Local State Drivers License, State ID Card, Birth Certificate, Passport, or another Credit Card with the same name and matching signature.

• The name and signature on the documents had to be compared for matches.

• The card number had to be manually checked against a Hot list that was provided by the bank.  If the card was confirmed to be on the hot list, we were instructed to immediately cut the card in half, call the bank card fraud number, and then the police, and wait for further instructions.  I actually had to do this on numerous occasions. The banks paid a $25 SPIFF for all fraudulent or over-limit cards that we destroyed.

• If the card was not on the hot list, it had to be run through a manual card imprinter (knuckle buster).   If the Sales Draft imprint created was bad, we had to do it again. The expiration date had to be circled, and initialed (to verified that we had checked it).  A customer home phone, work phone number, Identification type and number had to be written on the Sales Draft.

• The card had to be called into an operator.  After verbally giving the operator all of the data, we might have to wait several minutes to get an authorization code.

• If the retained paperwork that we had was missing any of the required information, the company would not be paid by the bank.

• Often the operation would require handing off the phone to the customer in order to verify personal information.

Obviously, all this was a lot of work an inconvenience for everyone involved!

Now a days, most stores don't ask for any kind of identification.  Often, if the  transaction involved is under a certain dollar amount, there is no prompt for a  signature.  Because of these lax requirements, the industry is seeing a dramatic rise in the amount of Credit Card fraud at all levels.

In order to combat this problem without requiring clerks to have to go back to the "old school" manual process, new technology has been introduced.  One of these tools is AVS (Address Verification Service), which surprisingly, not many retailers are using.  There is also new technology available that involves a secondary encrypted reader that is activated when a Credit Card is scanned.  The device prompts the user to insert a drivers license, or ID Card. Software then takes the scanned data from the card and verifies it across a number of different off-site credit/information databases, validating your identity and making sure that your address is correct. This type of device is similar to devices that are already in use by the government and military.

If you would like to know more about how your current POS system can be optimized to take advantage of these new features, please contact the CCS Retail Systems Support Department.