Never let anyone see the CVV, just the signature. Cover it with your finger.
In order be useful against fraud, the CVV must be part of the information presented to the card company in order to get the transaction authorized or declined. Of course, it would be more secure to have the customer enter the data at the customer-facing card reader. But the requirement to enter it at the POS appears to be recent, and they evidently haven't had a chance to update the card readers with appropriate hardware and software. So, they instruct the clerks to enter it instead.
As far as signatures, on AX, the CVV is on the front, above and to the right of the card number. When I use my AX at Staples, they don't even look at the back of the card.