Transcript Debit Card Exceptions

2009 Treasury Management Conference
Debit Card Exceptions
Diana Kern, AAP, Senior Trainer
SHAZAM, Inc.
© 2009, SHAZAM, Inc.
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Agenda
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Merchant responsibilities
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Issuer responsibilities
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Retrievals
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Chargeback cycle
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Common chargeback reasons
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Merchant Responsibilities
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Obtain authorization
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Electronic
Paper
Check validity of card
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1st four digits match imprint on card
Hologram
Stylized V or MC
Signature panel
Expiration and valid dates
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Merchant Responsibilities
 Complete sales
draft/receipt
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Merchant name and location
Merchandise description
Transaction date
Cardholder signature
Cardholder account number
Obtain and compare
signature
Compare presenter of
card with photo on card,
if applicable
Process sale
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Visa = 30 days
MC = 7 days
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Issuer Responsibilities
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Gather documentation and submit to
processor
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Cardholder letter
Processor-specific forms or reports
Initiate the chargeback
Monitor the chargeback process
Maintain file of cases for tracking and
audit purposes
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Regulation E Error Resolution
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Customer notification of POS debit
card error
Complete investigation within 90
calendar days
Provisionally credit within 10 business
days
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Visa requires within 5 business days
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Reasons to Request a Retrieval
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Cardholder does not agree
with the amount billed
Cardholder does not
recognize the transaction
Cardholder requests copy
for personal records
Fraud
investigation/Chargeback
documentation
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Retrieval Time Frames
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Acquirer/merchant retain copies of
sales drafts/tickets for:
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12 months (Visa)
18 months (MC)
Acquirer/merchant must supply copy
within 30 days from request date
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Chargeback Cycle
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Retrieval Request, if needed: Issuer
Chargeback: Issuer
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Re-presentment: Acquirer
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45 calendar days from date of chargeback
Second Chargeback
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: 45, 60 or 120 calendar days from
settlement date
: 75 or 120 calendar days from settlement
date
: Issuer
45 calendar days from re-presentment
Pre-Arbitration or Arbitration
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Most Common Chargeback Reasons
Account for 93% of all
chargebacks processed
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Unauthorized Example
Cardholder reviews their monthly
statement and sees a charge for
$49.95. The cardholder claims they did
not authorize this transaction.
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MasterCard Chargeback
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120 calendar days from settlement
date
Was it card present, or card-notpresent (CNP)?
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Merchant may re-present with a
swiped/imprinted and signed ticket
MasterCard Secure Code use by merchant
may alter chargeback rights
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Visa Chargeback
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120 calendar days from settlement
Was it card present, or CNP?
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Must order retrieval for all transactions
other than CNP
Verified by Visa may alter chargeback
rights
PAN must be hot-carded
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Merchant Contact Requirement
If cardholder engaged in the transaction,
he/she must:
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Contact merchant prior to processing a
chargeback
Specify how the attempt was made and
the result
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“I called the hotel twice and was told the
manager would call me back and he never
did.”
Use for non-fraud-related chargebacks
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Double Billing
Cardholder claims they were billed twice
for the same transaction. Transaction
amount may be the same or different
amounts.
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Chargeback Information
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120 calendar days from the settlement date
Different amounts may mean ‘Fraudulent
Processing of Transactions’ reason should be
used instead
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MasterCard
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Must be card present
Visa
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© 2009, SHAZAM, Inc.
Must be card present
PAN must be hot-carded
Travel & Entertainment minimum is $25
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Merchandise or Service Not Received
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Cardholder ordered crystal Star Wars
chess set via phone from QVC Network
and never received it.
Cardholder ordered new gutters to be
installed on their home and never
received the service.
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Chargeback Information
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120 calendar days from settlement
date or date expected to receive
merchandise or services
Documentation must indicate the date
cardholder expected to receive
merchandise or service
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Credit Not Received
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Merchant issued a credit transaction
receipt that was not processed
Cardholder returned merchandise and
merchant did not issue a credit
Cardholder cancelled services and
merchant did not issue a credit
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Chargeback Information
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120 calendar days from the settlement
date, date of credit receipt, or date of
returned merchandise
Merchant has 30 days to issue credit
refund
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Cancelled Reservation
Cardholder makes a reservation for 3
days at a hotel for their summer
vacation. Cardholder then cancels the
reservation, but is charged a no-show
fee on their statement.
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Chargeback Information
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120 calendar days from the settlement
date
Cancellation code
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Visa – required
MasterCard – helpful, not required
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Paid By Other Means
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Cardholder purchases gas at the pump
terminal, however, it appears the terminal is
not working. The cardholder then proceeds
inside the store to pay for their gas.
Cardholder makes a purchase and uses their
PIN at checkout. The cashier informs the
cardholder the transaction did not go
through and runs the transaction as a credit.
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Chargeback Information
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120 calendar days from the settlement
date
Cardholder must provide substantiating
document showing payment by
alternate means
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Incorrect Amount
Cardholder reviews their monthly
statement and sees a charge for $222
from their local hardware store,
however, the cardholder says it should
have been for $122.
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Chargeback Information
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120 calendar days from the settlement date
MasterCard:
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Need to provide a copy of cardholder’s receipt or
documentation to prove what the correct amount
should be
Visa:
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Must order a retrieval first to determine if
chargeback is available, unless provided by the
cardholder
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Defective Merchandise
Cardholder ordered a digital camera
from Cameras’R Us. When the camera
was shipped to the cardholder it was
damaged, defective, or unsuitable for
the purpose sold.
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Chargeback Information
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120 calendar days from the settlement
date, or from the date the cardholder
received or is expected to receive
merchandise or service
If returned wait 30 days for credit
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Not As Described
Cardholder ordered goods or services and
were not the same as described on the
transaction receipt, other
documentation presented to the
cardholder at the time of purchase, or
in the case of mail/phone order, not
the same as the merchant’s verbal
description.
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Chargeback Information
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120 calendar days from the settlement
date, or date the cardholder received
or is expected to receive merchandise
or service
Cardholder must attempt to return
merchandise, cancel service or resolve
a dispute for services
If returned wait 30 days
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Cancelled Services
Cardholder contacts their monthly
internet provider and cancels their
service. The next month the
cardholder reviews their statement
and sees the internet provider charged
them again after they had cancelled.
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Chargeback Information
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120 calendar days from the settlement
date
When closing an account, review history
for recurring transactions
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Non-Recognition
Cardholder reviews their monthly
statement and does not recognize a
particular transaction.
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Chargeback information
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120 calendar days from the settlement date
Issuer must make a good-faith effort to assist
cardholder in identifying the transaction
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Ask your cardholder, “Did someone else in the
family authorize the transaction?”
May order retrieval to help in identification
MasterCard:
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Must be a CNP transaction
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Re-presentments
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Also referred to as second presentment
Merchant option to re-submit a transaction
that was charged back to them
Must be done within 45 days of chargeback
ISSUER
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Final Dispute Resolution Steps
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Compliance Rights
Pre-Arbitration or Arbitration
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Special Considerations
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Automated Fuel Dispensers (AFD)
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Merchant protected up to $75 with a $1
authorization (credit trans)
Currency conversion for international
chargebacks
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Visa: settlement may change with
exchange rate
MC: no change to settlement amount
© 2009, SHAZAM, Inc.
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Minimum Chargeback Amounts
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Visa
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$10 Automated Fuel Dispenser
$25 for Travel & Entertainment
MasterCard
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$40 limited amount terminals
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Quick Payment/Small Ticket
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Specific merchant categories can run card
present without signature
Ticket amounts under $15, $25, or$50
Fast food restaurants, gas stations, video
stores and many more
No chargeback rights for unauthorized
reason if under dollar limit
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Resources
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www.mastercard.com
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www.visa.com
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Chargeback Guide & Operating Rules
http://www.mastercard.com/us/merchant/support/rules.h
tml
Chargebacks Information & Operatings Regulations
http://usa.visa.com/merchants/index.html#/page2
Your EFT network or card payment processor
Diana Kern, SHAZAM
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[email protected]
(866) 804-2709
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Thank you for your participation!
Questions
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