The CVV is primarily used for online transactions. It’s not required at POS machines. Some card transaction companies have recently started requiring it but not all.
For card-present transactions, the CVV has previously been optional, but recommended. Apparently, some merchants have started following the recommendation, while others have not.
Unlike the expiration date, the CVV is a piece of information independent of what’s on the mag stripe. As such, it’s like the billing address. Both pieces of information are helpful in ensuring that the person attempting the charge is the card holder and not a fraudster who bought intercepted swipes on the black market.