Swipe-and-sign is one of the most time-honored rituals in retail. When customers are ready to make purchases, they:
- Swipe the credit card in a POS reader
- Receive a printed time-stamped receipt
- Put their John Hancock on the signature line
On April 13, most major credit card brands will remove the signature requirement at the point of sale. Mastercard and Visa are phasing out this step across North America, while American Express is eliminating the signature requirement worldwide.The rationale is very simple …
Why Signatures Will No Longer Be Required
For years, merchants and credit card brands have used customer signatures as:
- A security authentication measure
- Documentation for dispute resolution
Signatures are relatively easy to forge, which partially explains why 75 percent of Visa sales throughout Canada, Mexico and the United States don’t involve signatures at all. There simply isn’t much benefit.
Moreover, recent advancements in financial technology (“fintech”) have produced a range of security features that offer far more protection.
EMV credit cards, for example, require that customers enter their personal identification numbers (PINs) to initiate transactions at the checkout counter. Only the cardholder knows this PIN, making fraudulent purchases very difficult with EMV plastic.
There are many other benefits of dropping the signature requirement from brick-and-mortar retail. Below are some of the biggest ones.
Benefit 1: Shorter lines (and more sales)
Signing a receipt doesn’t take long. Only a few seconds. But when you’re processing hundreds (or thousands) of transactions every week, those seconds can add up.
By removing this step, however, merchants can process more transactions per unit of time. This means shorter lines, more sales and higher profits.
As a side benefit, this speed also allows you to focus more attention on each customer. This can improve the overall shopping experience, which again, can lead to more sales.
Benefit 2: You’re no longer the “bad” cop
With this rule change, you’ll no longer have to compare signed receipts to whatever signatures are on the backs of your customers’ cards. This speeds up the sales process (another win).
It also removes some of the awkwardness that comes with the verification step. You don’t have to feel like a border agent or beat cop, demanding to see everyone’s “papers, please.”
Besides, are you really a handwriting expert? Maybe you are, but how many sales have you actually turned away because of a signature mismatch?
Benefit 3: Reduced overhead expenses
Signatures have little value if they aren’t stored for future disputes. That’s kind of the whole point.
But this requires maintaining paper copies or electronic versions of every signature that enters your payment environment. This storage costs money. It also takes a lot of time to sort and organize hard copies.
Removing the signature requirement also removes these unnecessary costs. So, you get to keep more of every dollar that comes in.
Benefit 4: Easier dispute resolution — maybe
By dropping the signature requirement, you’ll no longer have to supply signed receipts to prove you’ve properly disclosed certain store policies — such as how you handle refunds and returns.
Whether this makes the dispute resolution process easier remains to be seen, but not having signed receipts will no longer count against you. However, you’ll still need to display your refund policy clearly in-store to avoid any problems down the road.
Benefit 5: Cleaner, greener operations
The retail industry consumes a lot of paper. A lot.
A surprising amount of that waste comes from receipts and sales slips. By some estimates, U.S. retailers print more than 640,000 tons of paper at the checkout counter every year. That’s the equivalent of 10 million trees cut down annually.
Many of those receipts are made with a type of thermal paper that can’t easily be recycled. Dropping the signature requirement won’t eliminate this problem entirely, but it can help reduce some of this waste if you consolidate the merchant copy, customer copy and itemized sales receipt across fewer pieces of paper.
Benefit 6: Improved health
Believe it or not, there are health benefits to removing the signature requirement. That’s because the thermal paper used to create receipts are often coated with Bisphenol A (BPA). This synthetic compound makes paper more heat-resistant for the type of inkless printing that many POS terminals use.
However, BPA is still allowed in most places around the globe — including the United States. Removing the signature requirement means you won’t have to physically handle as much BPA-laced paper throughout the day. Neither will your customers.
Swipe and Sign: The End of an Era
Signatures enjoyed a long run, but their time has finally come. In their place, merchants are now using cheaper, faster and more secure ways to verify in-store transactions.
Want to learn about some of these emerging technologies? We’re here to help.