A new Texas law that goes into effect January 1 will allow merchants to decline a debit or credit card sale if a customer cannot or will not show identification.

According to the Texas Tribune, the law authored by Republican State Senator Bryan Hughes is aimed at reducing instances of card fraud and abuse.

“I think most people, like me, were surprised that merchants cannot already do this,” Hughes told the Tribune. “The intent of the law is to give Texas businesses the right to take this common sense step of asking for an ID for a credit card transaction."

 

Hughes and proponents of the bill argue that the measure will protect consumers and banks, but the wording of the bill leaves room for discretion.

According to the Tribune, Visa lobbyist Keith Strama was successful in convincing lawmakers to change "must" to "may" in the language of the legislation so that retailers do not violate current contracts with card companies preventing them from declining card purchases without ID.

Strama argued that the law could penalize citizens without ID who depend on government issued benefits cards, and that it would stymie efforts to keep customer information confidential.

Other opponents worry that employee discretion might be interpreted as bias or discrimination, the Tribune reported.

Executive vice president of the Independent Bankers Association of Texas Stephen Scurlock told the Tribune fraud is a major concern for community banks, and that he's surprised by the negative reactions to the new law.

“It is totally permissive," he told the Tribune. "There are no liability shifts. There are are no mandates, and there are no penalties.”

What do you think? Should retailers be allowed to turn down a debit or credit car sale if a customer does not show identification?