1© 2009, SHAZAM, Inc.
Debit Card ExceptionsDiana Kern, AAP, Senior Trainer
SHAZAM, Inc.
2009 Treasury Management Conference
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Agenda
Merchant responsibilities Issuer responsibilities Retrievals Chargeback cycle Common chargeback reasons
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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
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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
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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
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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
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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
Reasons to Request a Retrieval
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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
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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
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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
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
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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
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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
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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
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
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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.
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Chargeback Information
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
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
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
120 calendar days from the settlement date
Cancellation code Visa – required MasterCard – helpful, not required
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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.
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Chargeback Information
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
120 calendar days from the settlement date
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
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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
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
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
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
120 calendar days from the settlement date
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
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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
Re-presentments
ISSUERISSUER
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Final Dispute Resolution Steps
Compliance Rights Pre-Arbitration or Arbitration
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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
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Minimum Chargeback Amounts
Visa $10 Automated Fuel Dispenser $25 for Travel & Entertainment
MasterCard $40 limited amount terminals
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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
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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