Credit cards and our rights

I saw this post at The Consumerist about a restaurant refusing to accept a credit card.

Reader Jered says that IHOP refused to accept his credit card without seeing ID and threatened to call the police and report him for dine-and-dashing if he didn’t show it to them.

[…]

It is indeed a violation of IHOP’s merchant agreement with MasterCard to refuse payment without photo ID, except in the case that they need to ship something to you and have to verify your address.

When I forwarded this to my friend, she replied:

Sorry, but I don’t get this one. What’s the problem with showing an ID. If I happen to drop my card in the parking lot, I’d hope that someone who isn’t me couldn’t just pick it up & use it unchallenged. It’s the same reason, I don’t mind showing an ID to cash a check. It’s for my protection. As a matter of fact, all of my credit cards have “show photo ID” instead of a signature on them. What am I missing?

Honestly, I don’t have a problem with showing my DL with a credit card. I do it all the time. (If my DL still had a Social Security number on it, that would be a different story.) And the store is certainly entitled to ask to see it. ASK. Not demand. The problem is that the store feels entitled to demand something from the customer when they are explicitly not entitled.

The store violates their agreement with the credit card company by requiring ID for a purchase. And in my opinion, they violate somebody’s civil rights when they threaten them with arrest. Keep in mind that the customer has been put in a position where they risk going to jail for doing something that they have every legal right to do.

If the store has a complaint, it’s with the credit card company, and with a credit card agreement that they should never have agreed to if they think it’s wrong. If the cardholder had violated their agreement with the credit card company, the company would certainly hold them to the fire — raise their interest rate, put a black mark on their credit file, cancel their account or something like that. Do you think the store will have to face any kind of punitive action for what they did?

I don’t know why the credit card companies use that rule, but I assume that they don’t want to do anything that might discourage people from using credit cards, even if it only happens a small part of the time. I have no way to know that, and they aren’t about to tell us. They’re already scared of people losing confidence in the credit card system. Something hasn’t sunk in with the general public yet: interest rates are very low right now, and have been for a while, but credit card interest rates are still very high. The companies can’t lower their rates because they use that money to offset the costs of rampant credit card fraud. They’re afraid people will stop using their cards and cancel their accounts if they realize how insecure the system is, because there is no way to make the system more secure.

A more secure system would be so different from the one we have now, it would be in effect a totally new system. Probably a more cumbersome, less convenient system that’s much less attractive to consumers. It’s a lot easier to keep charging high interest and keep quiet about the crumbling credit infrastructure.

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