Merchants often violate rules on credit cards

Can merchants ask for ID when you make a credit/debit card purchase?
—Lorna M., New York, N.Y.

Visa and MasterCard have similar rules on this. In most cases and in most places, a merchant cannot ask for identification to process your transaction. If the clerk believes the signature on the sales slip does not match the signature on the back of the card, they can call the card verification center and may be instructed to ask for identification.

Merchants are required to ask for picture ID if the signature line is blank. You will be asked to sign the card on the spot. Visa and MasterCard rules say if you refuse to sign, that card cannot be accepted.

Instead of signing their card, a lot of people write “See ID,” or “Ask for ID” in the signature line. They think this will reduce their risk for fraud. The fact is this is not a valid substitute for a signature. If the card is not signed, it cannot be used.

Procedures can vary by state, however. In Washington state, where I live, the law allows  merchants to ask for picture ID. Lawmakers in our state thought this would help crack down on credit card fraud.

There are many nail salons/spas in my area that will not allow the customer to put a tip on a debit or credit card transaction. The tip must be paid in cash. Can they do this?
—Linda H., Stafford, Va.

Actually, they can. That’s because the transaction with the merchant is limited to the cost of the service provided. The tip is between you and the employee.

Why would they want to do this? It’s probably a way to cut expenses, since the merchant pays a transaction fee — a percentage of the total bill — to the credit card company. By keeping the tip off the bill, that transaction fee is smaller.

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