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

© 2009, SHAZAM, Inc. 2 Agenda Merchant responsibilities Issuer responsibilities Retrievals Chargeback cycle Common chargeback reasons

© 2009, SHAZAM, Inc. 3 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

© 2009, SHAZAM, Inc. 4  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

© 2009, SHAZAM, Inc. 5 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

© 2009, SHAZAM, Inc. 6 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

© 2009, SHAZAM, Inc. 7 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

© 2009, SHAZAM, Inc. 8 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

© 2009, SHAZAM, Inc. 9 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

© 2009, SHAZAM, Inc. 10 Most Common Chargeback Reasons Account for 93% of all chargebacks processed

© 2009, SHAZAM, Inc. 11 Unauthorized Example Cardholder reviews their monthly statement and sees a charge for $ The cardholder claims they did not authorize this transaction.

© 2009, SHAZAM, Inc. 12 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

© 2009, SHAZAM, Inc. 13 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

© 2009, SHAZAM, Inc. 14 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

© 2009, SHAZAM, Inc. 15 Double Billing Cardholder claims they were billed twice for the same transaction. Transaction amount may be the same or different amounts.

© 2009, SHAZAM, Inc. 16 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

© 2009, SHAZAM, Inc. 17 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.

© 2009, SHAZAM, Inc. 18 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

© 2009, SHAZAM, Inc. 19 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

© 2009, SHAZAM, Inc. 20 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

© 2009, SHAZAM, Inc. 21 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.

© 2009, SHAZAM, Inc. 22 Chargeback Information 120 calendar days from the settlement date Cancellation code Visa – required MasterCard – helpful, not required

© 2009, SHAZAM, Inc. 23 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.

© 2009, SHAZAM, Inc. 24 Chargeback Information 120 calendar days from the settlement date Cardholder must provide substantiating document showing payment by alternate means

© 2009, SHAZAM, Inc. 25 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.

© 2009, SHAZAM, Inc. 26 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

© 2009, SHAZAM, Inc. 27 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.

© 2009, SHAZAM, Inc. 28 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

© 2009, SHAZAM, Inc. 29 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.

© 2009, SHAZAM, Inc. 30 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

© 2009, SHAZAM, Inc. 31 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.

© 2009, SHAZAM, Inc. 32 Chargeback Information 120 calendar days from the settlement date When closing an account, review history for recurring transactions

© 2009, SHAZAM, Inc. 33 Non-Recognition Cardholder reviews their monthly statement and does not recognize a particular transaction.

© 2009, SHAZAM, Inc. 34 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

© 2009, SHAZAM, Inc. 35 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-presentmentsISSUER

© 2009, SHAZAM, Inc. 36 Final Dispute Resolution Steps Compliance Rights Pre-Arbitration or Arbitration

© 2009, SHAZAM, Inc. 37 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

© 2009, SHAZAM, Inc. 38 Minimum Chargeback Amounts Visa $10 Automated Fuel Dispenser $25 for Travel & Entertainment MasterCard $40 limited amount terminals

© 2009, SHAZAM, Inc. 39 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

© 2009, SHAZAM, Inc. 40 Resources Chargeback Guide & Operating Rules html html Chargebacks Information & Operatings Regulations Your EFT network or card payment processor Diana Kern, SHAZAM (866)

© 2009, SHAZAM, Inc. 41 Thank you for your participation! Questions