To Sign or Not To Sign - KCBD NewsChannel 11 Lubbock

1/21/03

To Sign or Not To Sign

Just one swipe and the money is deducted from your checking account. No more writing checks or keeping up with cash. You can use a debit card two different ways. You can enter a pin number, like at an ATM machine. Or you can sign a receipt like when paying by credit card. Retailers have to accept either method of payment as long as the card bears the Visa or Mastercard logo. Using the signature option, costs the retailers more than the pin option.

David Robertson with the Nilson Report explains. "When you use a pin, the merchant pays less money to process that transaction. When you sign with a signature, they pay significantly more."

Retailers pay banks about four times more money in fees when a customer uses a signature instead of a pin. Some banks are offering customers perks to entice them to sign for purchases. Mandy Walker with Consumer Reports suggests,"That is something you want to find out. You want to check with your bank and find out what kind of incentives offer, if they offer them and what kind of fees you'd be liable for."

But retailers want you to use the other method. Scott Madison with Jeffries and Company says, "Sophisticated merchants are prompting consumers in a checkout lane to use a pin as opposed to signing their names to the back of a receipt."

Either way,the cost of the purchase will come out of the same checking account and you could face additional charges. Robertson says, "When it comes to a pin transaction, a fee can be levied and that's usually similar to an ATM type fee where the consumers are charged a quarter to say over a dollar for a fee"

So, when it comes to debit cards, you're not the only one paying. Check with both your bank and credit card companies to understand the benefits and fees of signing your name versus entering a pin number. Those fees vary by company. For NewsChannel 11's Consumer Connection I'm Sharon Maines.

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