A $3 Billion Waste of Time

Every time I’m asked to sign a credit card receipt, I’ve wondered “how much does this archaic practice cost?”.  I finally decided to do the math.

First, a few words on why signing receipts is completely pointless.  The reason we’re supposed to sign is so the merchant can verify the signature to reduce fraud.  If the customer charges back a transaction, the bank will ask the merchant to produce the signature.  If one exists, the bank eats the cost; if not, the merchant does.

That all makes sense… except no one ever checks the signature.  For pretty much my entire adult life, I’ve signed things with smiley faces or even written VOID in all caps.  I have never had the signature questioned, much less compared to the one on my card.  Caveat: this is true in America.  Overseas, I’ve had the signature checked.

So we all — merchants and customers — engage in this meaningless ritual.  How much does this pointless custom cost?  Let’s do the math!

2011 saw 20 billion credit card transactions, and 76% of those were card-present transactions (where you have to sign).

Let’s assume each signature takes 15 seconds, from waiting for the receipt to print, passing it back and forth, doing the signature, and putting the receipt away.

And let’s also assume the customer and cashier both make an average american wage of $25.  15 seconds is 1 / 240 of an hour, which costs roughly 20 cents.

So we get 20,000,000,000 billion transactions * 76 percent * 20 cents = about $3 billion per year.

This number is conservative in that it doesn’t account for the time wasted by everyone else in line, plus the cost of the receipt paper, plus the cost of storing the receipts.

So we could save a few billion dollars if credit card agencies would change their charge back policy around card present transactions.

6 thoughts on “A $3 Billion Waste of Time

  1. Nicely put. I think Gav (the one from above) has been known to make the argument that Twilight was a great thing because it got so many people reading. Kind of opened my eyes, so I definitely salute you!

  2. OK, but then you have Tachira, Zulia, Carabobo, where we have always won and by double digit! Datanalisis has been hiding things away all this time!I mean, come on! If you are landsliding Lara, Miranda, Zulia and Tachira (this two according to the historial behaviour) and probably you are beating the sh. out of Chavez in Carabobo too, together with a narrow victory in DF and Bolivar and Aragua, how the hell did LVL dare to say we are losing by 10%? I mean, come on! Delta Amacuro and Apure don’t have so many voters!

  3. Rcg Personnellement je suis skipper, et je viens de partir pour une mission de 9 mois autours du monde… Malheureusement il n’y a ni téléphone ni internet sur mon bateau. Je peux appeler ma copine uniquement durant les escales, mais est ce que je pourrais avoir des conseils pour que l’on puisse reste ensemble ? 0  0

  4. Vernepleierens beste!Helt enig med deg Cato -flott med en som bryr seg om innhold og reel budskap enn en fin konferanse-fasade.Jeg gransker mine konferanse-notater og mobiliserer hukommelsens rapporteringsevne og dessverre, finner jeg mange ting som er underlige i det som ble presentert i SOR konferansen i Ã¥r. Lurer pÃ¥ om det er krefter som lurer i bakgrunnen og som presser i retning arbeidsmiljøloven…

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