Why don't some places require a credit card receipt signature, and some do?

Question

I'm thinking of certain places (Subway, McDonalds, etc.) that do not require a signature on a receipt after swiping your card. Why do these places not require a signature on the receipt, while others do?

Answer 1

This is basically done to reduce costs and overhead, with agreement of the credit card issuers. When the card is physically present and the charge is low, the burden of keeping the signed receipts and of additional delays at the cash register is not worth the potential risk of fraud.

Depending on the location and the specific charge-back history of the business, the limit above which signature is required differs. In one supermarket in the area I live they require signatures only on charges above $50. In another, 10 miles away from the first one, they require signatures on charges above $25.

Answer 2

My understanding it that the signature requirement is at the retailer's discretion. If the merchant decides to require a signature it protects them against fraudulent charge-back claims, but increases their administrative costs.

In some situations it just isn't practical for a retailer to require a signature. Consider for example mail-order or online purchases, which I've never had to sign a credit card slip for.

Answer 3

Merchants apply in advance for the program, and the amount is limited to less than $25.