Originally Posted by KVS

Requiring ID is a direct violation of the Visa/Mastercard regulations.

For Visa:

• "It is contrary to Visa policy to require the consumer to show identification as a condition of the sale. If a merchant asks for identification and the consumer is unable or unwilling to produce it, the merchant is still obliged to accept the consumer’s Visa card. Consumers who experience refusal of service based on identification may either call their card issuer to report the problem or call 1-800-VISA-911"
  [http://usa.visa.com/about_visa/newsr...arch#anchor_18]

For MasterCard:

• "The merchant cannot require additional identification as a standard business practice when you use MasterCard for payment."
  [http://global.mastercard.com/consumer/cust_serv.html]
  
  
• "If a merchant displays a decal with the MasterCard logo to indicate that MasterCard cards are accepted, that merchant can not condition a sale based upon the cardholder disclosing any other information or identification, except under very specific conditions, such as when merchant needs to deliver merchandise to the cardholder's home or business."
  [http://www.mastercardbusiness.com/mc.../faqs.html#211]
  
  
• There is even a form on the MasterCard's website to report this and other common violations: [http://global.mastercard.com/cgi-bin..._template.html]

As for AMEX, they discourage (but not prohibit) this practice, leaving it at the discretion of the merchant.