Point is, if a thief is anything but a total idiot, he'll have already either gotten a fake ID before he goes to use the cards he stole, or he'll have cloned the info off the mag stripe on the card he stole to a new card, WELL BEFORE you ever get to see his smiling face. For a real CC fraudster, checking his ID isn't gonna do squat.
I'm not sure what is required to be considered a "real" CC fraudster, but for the majority of credit card fraud that takes place at brick-n-mortar stores, the person presenting the card got it by stealing it, which means they'll usually have the remaining contents of the victim's wallet/purse, which also means they'll also have a non-MacGyver matching ID. I'm pretty sure the victims of these crimes would describe their experiences as "real". That being said, brick-n-mortar CC fraud is a very small percentage of the total. Most of it takes place online where a matching ID is irrelevant, but so is a signature for that matter.
So, the net result of your insistence on IDs is probably very unlikely to stop an actual CC thief and a lot more likely to inconvenience and P.O. your true customers. Especially if they forgot their license or something. Plus, as stated here, it is definitely against the issuer's policies, and eventually someone will probably report you.
On a scale of 1-to-10, I would rate showing my ID to make a CC purchase a 2 and having to deal with post-911 security measures at the airport a 9. We all rolled over on having our privacy rights violated because we were told it makes us safer. Just as an "actual CC thief" is unlikely to be discouraged by a merchant asking for ID, "actual" terrorists aren't going to attack us using our airports anymore. Yet we all wait hours and hours at our airports clinging to the idea that we're safer for it.
By the way, how often would someone happen to have their CC, but no ID? This is a ridiculous argument.
The multibillion dollar CC companies already fully protect their customers from fraud and unauthorized use, they really don't need a checkout clerk to help them out.
I agree, however, I believe the merchants are doing this for their own protection.