TheStar.com - Business - No need to sign on the dotted line

TheStar.com - Business - No need to sign on the dotted line

Aug 04, 2007 04:30 AM Ellen Roseman
Some stores have a new policy. They don't require a signature for credit card payments below a certain amount.
Jim, a reader, recently made a small purchase at Loblaws with his President's Choice MasterCard.
"I was astonished to learn that a signature is not required for under $100. It is written on the receipt," he said in an email.
"Every day we hear that fraud is out of control. And now they make it even easier?"
MasterCard offers a quick payment service, which allows supermarkets such as Loblaws to process transactions under $35 without requiring a signature.
Meanwhile, President's Choice MasterCard customers can authorize Loblaws transactions under $100 without signing.
It's an extra benefit for customers who use the store's proprietary credit card, says Elizabeth Margles, vice-president of public affairs at Loblaw Companies Ltd.
Later this month, Loblaws will post signs in stores and put messages into credit card clients' monthly statements.
"The key for customers," says Margles, "is that they are still covered under our zero liability policy – they are not responsible for any transaction they do not authorize."
MasterCard says 37,000 Canadian merchants have adopted the Quick Payment Service. Tim Hortons allows card purchases under $25 without a signature at more than 1,000 restaurants.
Credit card fraud has been a problem in Canada. After a security breach this year at TJX Cos. Inc., which owns Winners and Home Sense stores, many banks issued new credit cards to customers as a precaution.
Fraud should drop substantially with the introduction of "smart cards" with an embedded computer chip. But it will take until 2010 to replace the millions of cards and card readers in Canada.
Until then, it's up to cardholders to check their statements for unauthorized transactions and report them promptly to their card issuer.
Hyla Fox, another reader, alerted me to a policy she had encountered at the Aveda Academy Salon in downtown Toronto.
"I phoned to book an appointment, but the young woman on the phone said, `We don't have a credit card number on file for you. And we need one to book at appointment.' I told her it wasn't necessary as I always pay with cash. She said she was sorry, but they had to have a number on file."
Fox said no one explained to her why her credit card number was needed for booking. She now goes to another salon.
Ramona Caporicci, an Aveda spokesperson, said the policy was adopted at all corporately owned salons because some clients were not showing up for appointments.
By collecting credit card numbers, the salons could charge for services booked, whether clients showed up or not. This meant they didn't lose revenue to no-shows.
"We rarely charge and it's at the manager's discretion," Caporicci said, adding credit card numbers are encrypted once in the system.
The federal privacy law requires that information be collected for a reasonable purpose.
"In this case, it seems like the information is collected for a reasonable purpose, given the value assigned for an appointment time at an Aveda salon," says Colin McKay of the Office of the Privacy Commissioner of Canada.
It's important for businesses to realize they take on additional risk when they collect too much information. They are responsible for safeguarding it. "Even then, the business shouldn't hold on to the information any longer than necessary," McKay says.
Write to onyourside@thestar.ca or check www.ellenroseman.com