Many times, businesses and managers are unaware of the requirements and restrictions they must follow to accept Visa, Mastercard, American Express, and Discover.
Considering Visa’s Operating Procedures Manual is 670 pages long, which dictates the merchant rules, it’s no wonder merchants aren’t aware of their requirements.
That’s where you come in.
It’s best to become an informed consumer and understand when you can exercise your right per the credit card you’re using and its merchant agreement. Depending on the credit card issuer, you may not have to provide ID, sign the back of your card, or make a minimum purchase.
Here are some tips:
A Merchant must honor all valid Cards without discrimination when properly presented for payment. A Merchant must maintain a policy that does not discriminate among customers seeking to make purchases with a Card. A Merchant that does not deal with the public at large (for example, a private club) is considered to comply with this rule if it honors all valid and properly presented Cards of Cardholders that have purchasing privileges with the Merchant.
A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or
convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly permitted in writing. For purposes of this Rule:
- A surcharge is any fee charged in connection with a Transaction that is not charged if another payment method is used.
- The Merchant discount fee is any fee a Merchant pays to an Acquirer so that the Acquirer will acquire the Transactions of the Merchant.
A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.
To comply with Visa operating regulations, merchants may not estimate authorization amounts. You must authorize all Visa card transactions for just the “known” check amount, NOT the amount plus estimated tip.
An Acquirer must not, as a regular practice, require a Merchant, and a Merchant must not require a Cardholder, to provide any supplementary Cardholder information as a condition for honoring Visa Card or Visa Electron Card, unless it is required, or permitted, elsewhere in these Operating Regulations. Such supplementary Cardholder information includes, but is not limited to:
- Social Security Number (or any part thereof)
- Home or business address or telephone number
- Driverâ€™s license number
- Photocopy of a driverâ€™s license
- Photocopy of the Visa Card or Visa Electron Card
- Other credit cards
If the signature panel on the Card is blank, in addition to requesting an Authorization, a Merchant must do all of the following. Visa considers a signature panel with the words â€œSee I.D.â€ or equivalent language to be blank.
- Review positive identification bearing the Cardholderâ€™s signature (such as an unexpired passport or driverâ€™s license) to validate the Cardholderâ€™s identity
- Indicate the positive identification, including any serial number and expiration date, on the Transaction Receipt
- Require the Cardholder to sign the signature panel of the Card prior to completing the Transaction
A Merchant must not establish a minimum or maximum Transaction amount as a condition for honoring a Visa or Visa Electron Card.
Merchants must not indicate or imply that they prefer, directly or indirectly, any Other Payment Products over our Card, try to dissuade Cardmembers from using the Card, criticize or mischaracterize the Card or any of our services or programs, try to persuade or prompt Cardmembers to use any Other Payment Products or any other method of payment (e.g., payment by check),
impose any restrictions, conditions, disadvantages or fees when the Card is accepted that are not imposed equally on all Other Payment Products, except for ACH funds transfer, cash, and checks,
engage in activities that harm our business or the American Express Brand (or both), or promote any Other Payment Products (except the Merchantâ€™s own private label card that they issue for use solely at their Establishments) more actively than the Merchant promotes our Card.
Merchants may offer discounts from their regular prices for payments in cash or by ACH funds transfer or check, provided that they clearly disclose the terms of the offer (including the regular and discounted prices) to customers and that any discount offered applies equally to Cardmembers and holders of Other Payment Products.
Merchants must not accept the Card for any of the following:
- adult digital content sold via Internet Electronic Delivery
- amounts that do not represent bona fide sales of goods or services (or, if applicable, amounts that do not represent bona fide charitable contributions made) at the Merchantâ€™s Establishments, amounts that do not represent bona fide, direct sales by the Merchantâ€™s Establishments to Cardmembers made in the ordinary course of their business
- Charges that the Cardmember has not specifically approved, costs or fees over the normal price of goods/services (plus applicable taxes) that the Cardmember has not specifically approved
- damages, losses, penalties, or fines of any kind
- gambling services (including online gambling) gambling chips, gambling credits or lottery tickets
- overdue amounts, or amounts covering returned, previously dishonored, or stop-payment checks
For In-Person Charges, Merchants must:
- verify that the Card is not visibly altered or mutilated
- swipe or key-enter the Card and obtain a six-digit Authorization Approval code, obtain signature and verify that the signature is identical to the name on the Card, compare the signature on the Charge Record with the signature on the Card, ensure the name that prints on the Charge Record matches the name on the front of the Card (except if the Cardmember name is not captured on the Charge Record),
- match the Card Number (on the front, and if present on the back of the Card) and Expiration Date to the same information on the Charge Record,
- verify the Cardâ€™s valid date
- verify that the customer is the Cardmember
- You may not require that any Cardholder make a minimum dollar purchase in order to use a Card and you may not limit the maximum amount that a Cardholder may spend when using a Card except when the Issuer has not provided a positive Authorization Response for a Card Transaction.
- In Card Present Card Sales involving valid Cards bearing a signature panel on the back of the Card, you must verify that there is a signature on the signature panel on the back of the Card and that the name on the back of the Card is reasonably similar to the name embossed on the front of the Card (except where the valid Card does not bear a Cardholder name on the front of the Card).
- If a Card bearing an unsigned signature panel is presented to you, request two pieces of identification, one of which is a government-issued photo identification. When you have confirmed that the person presenting the Card is the Cardholder, you may request the Cardholder to sign the back of the Card.
So what does this mean?
Do I need to show my ID?
Mastercard appears to be the only card that identification is not required when making a purchase.
Visa and Discover Card only require ID when the card is unsigned. It’s not clear if “See ID” means a valid signature for Discover Card. “See ID” written on the back of Visa cards is considered unsigned.
American Express requires identification.
Do I need to make a minimum purchase to use my credit card?
No. It’s not spelled out crystal-clear in American Express’ agreement, but based on this line, “merchants may not impose any restrictions, conditions, disadvantages or fees when the Card is accepted that are not imposed equally on all Other Payment Products,” we would say no.
These seem to be the most common questions we get. Chargeback policies differ from company to company, so it would be a good idea to look the agreements through below for specific information.
Mastercard Merchant Agreement (last updated 11/2009)
Visa Card Merchant Agreement (last updated 11/2008)
American Express Merchant Agreement (last updated 4/2010)
Discover Card Merchant Agreement (last updated 10/2007)