Can I estimate other people's credit limit at the grocery store?

Question

I regularly shop at Ralph's grocery store and pay with CC. I noticed that they don't ask you to sign a receipt if your purchase is less than some amount.

Now after some time I noticed that this minimal amount increased. At first I thought it is because I was their long time customer, but then I remembered that my credit limit increased around the same time. Interestingly, currently the minimal amount is exactly 1% of my credit limit, and before it was exactly 1% of my old limit.

Now if it's true that this minimal amount is exactly 1% of your credit limit, then you could pretty easily estimate everyone's credit limit in front of you in line, just need to hear the amount of their purchase and see whether they sign their receipt or not. Kind of useless, but would be fun nonetheless while waiting in line.

So the question is how this minimal amount is calculated, is it based on credit limit, on the merchant, on the bank, or it's more complicated. Also would be interesting to hear if other Ralph's customers sign their receipts at 1% of their credit limit or it's just me.

Answer 1

What you're referring to is Visa Easy Payment Services (VEPS). Other payment processors have similar programs. Basically, certain merchants (based on merchant category code - or MCC), are not required to obtain a signature under $50. This limit was raised to $50 from $25 last year.

Here is the press release from Visa describing the increase, and the program in general.

Answer 2

The minimum amount is set by the merchant services provider based on the kind of business, its location and the history. It mostly has nothing to do with you personally. However, the minimum amount differs based on the kind of credit cards being used. For example, foreign credit cards will require signatures on much lower amounts than domestic.

In my local Safeway (NoCal analog of Ralph's) the limit for domestic credit cards is set at $50. If your credit limit is $5000, you might think that its a 1% of your limit. But if your limit is $50000 or $500 - it will still be $50.

You cannot deduce anything about a specific person's credit situation based on whether or not they are required to sign the receipt. It has no affect on the decision.