Can You Ask Customers for ID at Checkout?

You’ve no doubt had this experience: you’re checking out at a store and are asked for your ID at checkout when you use a credit card, perhaps if the purchase is over a certain amount. You might even have a policy about this at your own store.

Is it legal for businesses to ask for ID?

Yes, it is absolutely legal. However, card networks have rules that stores must abide by when it comes to dealing with verification. These rules vary depending on whether or not a signature appears on the back of the card.

Visa & Mastercard’s policy is that if the card is unsigned, the merchant must ask that the card be signed and that the customer provide government ID. If the card is signed, the merchant is not allowed to require ID.

Visa’s policy is that “merchants cannot as part of their regular card acceptance procedures refuse to complete a purchase transaction because a cardholder refuses to provide ID.”  Visa’s advice to merchants: if a cardholder looks suspicious, the merchant should make a Code 10 authorization request call that alerts the card issuer to suspicious activity without alerting the customer.

“A merchant must not refuse to complete a transaction solely because a cardholder refuses to provide additional identification information,” says MasterCard.  It even has a special page on its website that cardholders can report to them when merchants do this.

American Express has very loose guidelines. They do not have a rule about whether or not to require IDs. American Express simply wants the merchants to verify that the customer is the actual cardholder.

Discover has the most intrusive policy. They state that a store employee who has doubts the validity of a card should “request and review additional identification” from the customer. For an unsigned card, the company actually requires two pieces of identification, including one government-issued photo ID.

If a merchant is checking IDs for any reason, there are some legal requirements that they will need to comply with. Namely, that the information on it is not recording. Over a dozen states have restricted the recording of person information during credit card transaction, and merchants who do so are most likely breaking the law and may risk fines in certain states.

Regardless of whether or not a customer provides ID, a business can refuse a sale as long as it does not violate any discrimination laws. A store can choose not to process a transaction if they have sufficient reason – whether it’s a cash or credit card purchase.

The entire purpose of checking a cardholder’s identification is to prevent the use of stolen credit cards. Once a chargeback occurs, it’s the merchant that is going to lose out because they accepted a stolen credit card and didn’t do their due diligence.

Knowing what’s allowed according to card network guidelines is half the battle. The other half is implementation, and when it comes to card ownership verification – discretion and common sense play key roles.