October 31, 2011 | In: General

Can a Merchant Make a Copy of Your Credit Card?

I was buying an item the other day and the merchant gave my credit card to his assistant to make a copy of it. I immediately refused, not only that, I stated that he is not allowed to make a copy of credit card because it is in Visa’s terms that they’re not allowed to do so. He then refrained from making the copy, and apologized.

Of course, I didn’t know whether it was in Visa’s terms to actually allow a copy of the credit card or not, but I knew he didn’t know either, and that’s why I said that. I just didn’t want anyone to have a copy of my credit card (the merchant had my full address, my phone number, and by making the copy he will have the credit card number and the expiry date and the CVV [Card Verification Value], so he can make a purchase with my credit card online if and when he wants). So, can he really make a copy of my credit card or not? And why does he need to make a copy anyway?

After a heavy research, I couldn’t find an answer to my question. Even when I called the Visa department at my bank, they were reluctant in answering (I think they didn’t know the answer in the first place). However, let me give you some facts:

- Fact #1: PCI Requirements (Requirement for companies processing credit card transactions) clearly state that, while the merchant can store the credit card number and the expiry date, he can never ever store the CVV (Card Verification Value). These are Visa and Mastercard rules (so if an offline merchant makes a full copy of the credit card, then he will surely have the CVV, which is not allowed online).

- Fact #2: If, for any reason, a merchant tries to make a copy of your credit card and you refuse, then he may refrain from processing the transaction altogether (or revert the transaction if it’s already made), or just apologize and not make the copy.

- Fact #3: When you go to a store and try to subscribe to a service (such as a phone service), they usually make a copy of your credit card in order to automatically bill you every month.

- Fact #4: There is no reason whatsoever for the merchant to make a copy of your credit card. Even if you try to subscribe to a service, then they can just enter your credit card information into a system without copying it.

- Fact #5: All banks in the US and Canada will revert back any unauthorized charges to your credit card.

- Fact #6: There are some unconfirmed reports about Visa stating that it’s now illegal to make copies of the credit card.

- Fact #7: No one will give you a definitive answer to the question: “Can a merchant make a copy of my credit card?”

After examining all these facts, I think the only answer to this question is non-conclusive: “Nobody seems to really know”.

I will try to bug Visa again to see if they can give me more information, but until then, if a merchant tries to make a copy of your credit card, remember that you can refuse (the merchant will most likely not make a fuss out of it if he wants to close the sale).

On a related note, Visa is now trading at $94.07 (P/E of 22), and I think it’s overvalued as Visa is trying to compensate for the slow economy with higher fees, which will eventually backfire.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

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