© 2009, SHAZAM, Inc. 1 Debit Card Exceptions Diana Kern, AAP, Senior Trainer SHAZAM, Inc. 2009...

1© 2009, SHAZAM, Inc.

Debit Card ExceptionsDiana Kern, AAP, Senior Trainer

SHAZAM, Inc.

2009 Treasury Management Conference


Agenda

Merchant responsibilities Issuer responsibilities Retrievals Chargeback cycle Common chargeback reasons


Merchant Responsibilities

Obtain authorization Electronic Paper

Check validity of card 1st four digits match imprint on card Hologram Stylized V or MC Signature panel Expiration and valid dates


Complete sales

draft/receipt 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 Visa = 30 days MC = 7 days

Merchant Responsibilities


Issuer Responsibilities

Gather documentation and submit to processor Cardholder letter Processor-specific forms or reports

Initiate the chargeback Monitor the chargeback process Maintain file of cases for tracking

and audit purposes


Regulation E Error Resolution

Customer notification of POS debit card error

Complete investigation within 90 calendar days

Provisionally credit within 10 business days Visa requires within 5 business days


Cardholder does not agree with the amount billed

Cardholder does not recognize the transaction

Cardholder requests copy for personal records

Fraud investigation/Chargeback documentation

Reasons to Request a Retrieval


Retrieval Time Frames

Acquirer/merchant retain copies of sales drafts/tickets for: 12 months (Visa) 18 months (MC)

Acquirer/merchant must supply copy within 30 days from request date


Chargeback Cycle

Retrieval Request, if needed: Issuer Chargeback: Issuer

: 45, 60 or 120 calendar days from settlement date

: 75 or 120 calendar days from settlement date

Re-presentment: Acquirer 45 calendar days from date of chargeback

Second Chargeback : Issuer 45 calendar days from re-presentment

Pre-Arbitration or Arbitration


Most Common Chargeback Reasons

Account for 93% of all chargebacks processed


Unauthorized Example

Cardholder reviews their monthly statement and sees a charge for $49.95. The cardholder claims they did not authorize this transaction.


MasterCard Chargeback

120 calendar days from settlement date

Was it card present, or card-not-present (CNP)? Merchant may re-present with a

swiped/imprinted and signed ticket MasterCard Secure Code use by

merchant may alter chargeback rights


Visa Chargeback

120 calendar days from settlement Was it card present, or CNP?

Must order retrieval for all transactions other than CNP

Verified by Visa may alter chargeback rights

PAN must be hot-carded


Merchant Contact Requirement

If cardholder engaged in the transaction, he/she must:

Contact merchant prior to processing a chargeback

Specify how the attempt was made and the result “I called the hotel twice and was told the

manager would call me back and he never did.”

Use for non-fraud-related chargebacks


Double Billing

Cardholder claims they were billed twice for the same transaction. Transaction amount may be the same or different amounts.


Chargeback Information

120 calendar days from the settlement date

Different amounts may mean ‘Fraudulent Processing of Transactions’ reason should be used instead MasterCard

Must be card present Visa

Must be card present PAN must be hot-carded Travel & Entertainment minimum is $25


Merchandise or Service Not Received

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.



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


Credit Not Received

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



120 calendar days from the settlement date, date of credit receipt, or date of returned merchandise

Merchant has 30 days to issue credit refund


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.




Cancellation code Visa – required MasterCard – helpful, not required


Paid By Other Means

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.




Cardholder must provide substantiating document showing payment by alternate means


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.




MasterCard: Need to provide a copy of cardholder’s

receipt or documentation to prove what the correct amount should be

Visa: Must order a retrieval first to determine if

chargeback is available, unless provided by the cardholder


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.



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


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.



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


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.




When closing an account, review history for recurring transactions


Non-Recognition

Cardholder reviews their monthly statement and does not recognize a particular transaction.


Chargeback information


Issuer must make a good-faith effort to assist cardholder in identifying the transaction Ask your cardholder, “Did someone else in the

family authorize the transaction?” May order retrieval to help in identification

MasterCard: Must be a CNP transaction


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

Re-presentments

ISSUERISSUER


Final Dispute Resolution Steps

Compliance Rights Pre-Arbitration or Arbitration


Special Considerations

Automated Fuel Dispensers (AFD) Merchant protected up to $75 with a

$1 authorization (credit trans) Currency conversion for

international chargebacks Visa: settlement may change with

exchange rate MC: no change to settlement amount


Minimum Chargeback Amounts

Visa $10 Automated Fuel Dispenser $25 for Travel & Entertainment

MasterCard $40 limited amount terminals


Quick Payment/Small Ticket

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


Resources

www.mastercard.com Chargeback Guide & Operating Rules http://www.mastercard.com/us/merchant/support/rul

es.html www.visa.com

Chargebacks Information & Operatings Regulations http://usa.visa.com/merchants/index.html#/page2

Your EFT network or card payment processor Diana Kern, SHAZAM

[email protected] (866) 804-2709


Thank you for your participation!

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© 2009, SHAZAM, Inc. 1 Debit Card Exceptions Diana Kern, AAP, Senior Trainer SHAZAM, Inc. 2009...

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