Signature on File

Bank card billing system in which cardholders actually do not sign the sales draft authorizing a charge to their account. Instead, the merchant or merchant processing bank approves the transaction by matching the cardholder's address supplied by the merchant to a home mailing address, according to bank records. Signatures are not actually compared. This form of cardholder Identification is used most often by mail order merchants, and by hotel chains when billing additional charges after a hotel guest has checked out. If the customer disputes a charge, he or she signs an affidavit.