Derek, I suspect a lot of retailers are instituting policy to discourage an employee from handling the card in order to prevent employee skimming. But most of the focus is on the security of the terminal itself--where compromised card readers are being used to skim the credit card info in plain sight. For example Visa and PCI talk a lot about skimming technology detection in their guidelines but do not explicitly recommend against employees handling cards.
A few years ago there was an explosion of bad-guy skimming technology on the streets--including hand held readers employees can use. While the credit card processors and retailers have responded with many counter measures, they're still most concerned with the safety of the card reader:
This document contains a non-exhaustive list of security guidelines that can help merchants to:
Our customers tend to scrutinize employee behavior based on sales reports (looking for excessive refunds, etc), then review video to spot check employee behavior. I've seen a lot of recommendations that managers make sure employees know they're being watched and their activities scrutinized (like your CVS clerk) to prevent activity like skimming among other employee fraud.
Of course video is also used after the fact to find out when a reader might have been tampered with. I recall a customer not too long ago who was looking for video of the installation of a skimmer on his in-store ATM machine..
Diligence is a key and I think retailers know that. Retailers look at video of their cash registers about 40-50% of the time they look at any video in the store. Obviously this is when the customer interaction happens at many retailers, but it's also where the money is..