Payments Acceptance Procedures

Last Updated May 17, 2019

Payment acceptance solutions are an essential part of your business. We want to make accepting payments as simple as possible for you. That’s why we created these Payments Acceptance Procedures (“Procedures Guide”).  It’s a quick reference to guidelines and best practices for accepting and processing card transactions.  You’ll also find recommendations and tips to help you prevent fraud, reduce chargebacks, and properly handle payments, refunds, exchanges, and other card-related situations you’ll encounter in your day-to-day business.
This Procedures Guide reflects card association rules and requirements (“Card Organization Rules”).  In light of your obligation to comply with Card Organization Rules, we strongly recommend you read and comply with this Procedures Guide.  Because this Procedures Guide reflects Card Organization Rules, failure to comply with this Procedures Guide also could (if your non-compliance touches a Card Organization Rule) result in a breach of your agreement with us.

To help you navigate more easily and find the information you need, we’ve organized this Procedures Guide into three parts. At the end of this Procedures Guide you’ll also find information specific to processing Discover® payments, as well as specific information for Wright Express (“WEX”) Card transactions, Voyager transactions, and Fleet transactions.

If you have questions about processing payments or any of our other services, please contact our Customer Service team at 800-430-7161 (“Customer Service”). Our Customer Service team is here to make things easier so let us know what we can do to help.

Below, we’ve provided links to Card Organizations’ webpages for easy reference.


Part 1

The first step of a transaction actually begins before a customer even decides to make a purchase. This part of this Procedures Guide reviews steps you’ll need to take to ensure customers are informed of their payment options and understand the terms of sale. You’ll also find tips and important reminders for validating cards in order to help reduce the risk of fraud. Finally, specific guidelines for accepting debit cards and EBT payments are outlined.

Use of CARD Organizations’ Brands

Do's

  • Do prominently display relevant trademarks of the card associations (“Card Organizations”) at each of your locations, in catalogs, on websites and on other promotional material.
  • Do only use the official trademarks of ours and of the Card Organizations in the official format, and only as we and the applicable Card Organizations have prescribed and approved in writing.

Don'ts

  • Don’t indicate that we or any Card Organization endorses your goods or services.
  • Don’t use the trademarks of any Card Organization after your right to accept the cards of that Card Organization has ended, or after you have been asked or instructed to stop using that Card Organization’s trademarks.
  • Don’t use our trademarks or the trademarks of any Card Organization in any way that injures or diminishes the goodwill associated with the trademarks.
Point of Sale (POS) Reminders

You must clearly and conspicuously:

  • Disclose all material terms of sale prior to obtaining an authorization.
  • At all points of interaction inform cardholders which entity is making the sales offer, so that cardholders can clearly distinguish you from any other party involved in the interaction.
  • Disclose any discount/incentive for customers to pay with cash, check, credit card or debit card and so on. Any such discount/incentive must be offered to all customers with no special treatment for any card brand or card issuing bank.

If you accept orders via the internet, your website must include the following information in a prominent manner:

  • A complete description of the goods or services offered.
  • Details of your (i) delivery policy; (ii) consumer data privacy policy; (iii) cancellation policy; and (iv) returns policy.
  • The transaction currency (US dollars only).
  • Your Customer Service contact information, including email address and/or telephone number.
  • Your address, including country.
  • The transaction security used on your website.
  • Any applicable export or legal restrictions.
  • Your identity at all points of interaction with the cardholder.
  • The date on which any free trial period ends.
  • If you limit refund/exchange terms or impose other specific conditions for card sales, you must clearly print (in 1/4” letters) the words “No Exchange, No Refund,” etc. on the sales draft near or above the cardholder’s signature, both on the cardholder’s copy and your copy.

During a liquidation and/or closure of any of your outlets, locations and/or businesses, you must post signs clearly visible to customers stating that “All Sales Are Final,” and stamp the sales draft with a notice that “All Sales Are Final.”

Validating Cards

Transactions where the cardholder is present - ‘Card Present’ transactions

You must check the card if the cardholder is present at the point of sale:

  • Check one or more card security features (for example, hologram).
  • Capture card data using the POS device by swiping the card (magnetic stripe), tapping/waving the card (contactless), or inserting the card (chip card).
  • Ensure that the cardholder either enters their PIN using the keypad or provides their signature.
  • Verify that the signature is identical to the name and signature on the card (if a signature is provided).
  • Verify the card’s valid from date (if applicable) and the expiration date.
  • Verify that the card number and expiration date on the card are the same as on the transaction receipt and the number displayed on the POS device.
  • Verify that the name on the transaction receipt is the same as the name on the front of the card (if applicable).
  • Ensure that the cardholder appears to be the person shown in the photograph (for cards with a photograph of the cardholder).

If the signature panel on the card is blank, you must:

  • Review positive identification bearing the cardholder’s signature (for example, a current passport or driver’s license) to validate the cardholder’s identity.
  • Require the cardholder to sign the signature panel of the card prior to completing the transaction.

Transactions where the cardholder is not present - Card Not Present Transactions

This section applies to any transaction where the cardholder is not present, such as mail, telephone, internet and e-commerce.

Do's

  • Do obtain the card account number, name as it appears on the card, expiration date of the card, and the cardholder’s statement address.
  • Do use the Address Verification Service (AVS).
  • Do clearly print the following on the sales draft, and provide a copy to the cardholder at the time of delivery:
    • The last four digits of the cardholder’s account number.
    • The date of transaction.
    • A description of the goods and services.
    • The amount of the transaction (including shipping, handling, insurance, etc.).
    • The cardholder’s name, billing address and shipping address.
    • The authorization code.
    • Your name and address (city and state required).
  • Do obtain proof of delivery of the goods or services to the address designated by the cardholder.
  • Do notify the cardholder of delivery time frames and special handling and/or cancellation policies.
  • Do ship goods within seven (7) days from the date on which authorization was obtained. If delays are incurred (for example, out of stock) after the order has been taken, notify the cardholder and obtain fresh authorization of the transaction.
  • Do use any separate Merchant Account Numbers (also referred to as MIDs) provided to you for internet orders in all your requests for authorization and submission of charges.
  • Do immediately notify our Customer Service of any change in your internet address.

Don'ts

  • Don’t exceed the percentage of your total payment card volume for card not present sales.
  • Don’t submit a transaction for processing until after the goods have been shipped or the service has been provided to the cardholder - the only exception to this is where the goods have been manufactured to the cardholder’s specifications and the cardholder has been advised of the billing details.
  • Don’t accept card account numbers by electronic mail.
  • Don’t require a cardholder to complete a postcard or other document that displays the cardholder’s account number in clear view when mailed or send any mailing to a cardholder that displays personal information in clear view.

It is also recommended that, if feasible, you obtain and keep a copy on file of the cardholder’s signature authorizing you to submit telephone and mail order transactions.

Address Verification Service (AVS) (and other fraud mitigation tools such as Verified by Visa®, Mastercard® Secure Code, Card Validation Codes and Card Identification) does not guarantee against chargebacks; but, if used properly, it assists you in reducing the risk of fraud by confirming whether certain elements of the billing address provided by your customer match the billing address maintained by the card issuing bank. AVS also may help avoid additional interchange expenses.  AVS is a separate process from requesting an authorization and will provide a separate response. A transaction may be authorized regardless of the AVS response.  

Customer-activated terminals and self-service terminals

Transactions processed at customer-activated terminals and self-service terminals have specific requirements for processing. You must contact Customer Service for approval and further instructions before conducting customer-activated terminal transactions or self-service terminal transactions.

Transaction Guidelines

Do's

  • Do only present for payment valid charges that arise from a transaction with a bona fide cardholder.

Don'ts

  • Don’t set a minimum transaction amount of more than $10 for any credit cards or of any amount for debit cards.
  • Don’t set a maximum transaction amount for any credit cards.
  • Don’t establish any special conditions for accepting a card.
  • Don’t make any cash disbursements or cash advances to a cardholder as part of a transaction with the exception of the Discover Network Cash Over service.
  • Don’t accept any direct payments from cardholders for goods or services which have been included on a sales draft.
  • Don’t require a cardholder to supply any personal information for a transaction (for example, phone number, address, driver’s license number) unless (i) instructed by the Voice Authorization Center; (ii) presented an unsigned card; or (iii) processing a card not present transaction.
  • Don’t submit any transaction representing the refinance or transfer of an existing cardholder obligation which is deemed uncollectible, for example, a transaction that has been previously charged back, or to cover a dishonored check.
  • Don’t submit sales drafts or credit drafts transacted on the personal card of an owner, partner, officer or employee of your business establishment or of a guarantor of any of your obligations, unless such transaction arises from a bona fide purchase of goods or services in the ordinary course of your business.
  • Don’t carry out factoring; factoring is the submission of authorization requests and/or sales drafts for card transactions transacted by another business.
Security

You are responsible for maintaining the security of your POS devices and for instituting appropriate controls to prevent employees or others from submitting credits that do not reflect bona fide returns or reimbursements of earlier transactions.

You are required to comply with the data security requirements shown below:

Do's

  • Do install and maintain a secure firewall configuration to protect data.
  • Do protect stored data, and do encrypt transmission of data sent across open/public networks, in accordance with the Payment Card Industry Data Security Standard (“PCI DSS”).
  • Do use and regularly update anti-virus software and keep security patches up-to-date.
  • Do restrict access to data on a “need to know” basis.
  • Do assign a unique ID to each person with computer access to data and track access to data by unique ID.
  • Do regularly test security systems and processes.
  • Do maintain and enforce a policy that addresses information security for employees and contractors.
  • Do restrict physical access to cardholder information.
  • Do destroy or purge all media containing obsolete transaction data with cardholder information.
  • Do keep all systems and media containing card account, cardholder, or transaction information (whether physical or electronic) in a secure manner, so as to prevent access by or disclosure to any unauthorized party.
  • Do use only those services and devices that have been certified as PCI DSS compliant.
  • Do comply with your data security obligations, including Card Organization Rules and PCI DSS.

Don'ts

  • Don’t use vendor-supplied defaults for system passwords and other security parameters.
  • Don’t transmit cardholder account numbers to cardholders for Internet transactions.
  • Don’t store or retain card verification codes (three digit codes printed in the signature panel of most cards and a four digit code printed on the front of an American Express card) after final transaction authorization.
  • Don’t store or retain magnetic stripe data, PIN data, chip data or AVS data - only cardholder account number, cardholder name and card expiration date may be retained after transaction authorization.

For internet transactions, copies of the transaction records may be delivered to cardholders in either electronic or paper format.

Reserved

Debit Cards

When accepting debit  cards, you’ll need to follow the specific requirements of each debit network, as well as the general requirements set out in this section.

Do's

  • Do read the account number electronically from the magnetic stripe/chip for transactions authenticated with a PIN. If the magnetic stripe/chip is unreadable, you must request another form of payment from the cardholder.
  • Do treat transactions by Cardholders from all Issuers in the same manner.
  • Do obtain a signature if PIN authentication is not supported or available.
  • Do process a return transaction for an original PIN authenticated transaction in the same manner as a cash refund (i.e. cash, in store credit or store gift card).
  • Do include any applicable tax in the total debit transaction amount for which authorization is requested.
  • Do provide a receipt to the cardholder upon successful completion of the debit transaction.
  • Do honor all valid debit cards presented.
  • Do authorize and process all debit network Transactions electronically; there is no voice authorization or imprinter procedure for debit network transactions.

Don'ts

  • Don’t process a credit card transaction in order to provide a refund on a debit card transaction.
  • Don’t complete a debit card transaction without entry of the PIN by the cardholder (and no one else) or signature by the cardholder (and no one else), unless the transaction is a “no-signature” signature debit transaction or a “PINless” PIN debit transaction specifically supported by the debit network.
  • Don’t accept the PIN from the cardholder verbally or in written form.
  • Don’t manually enter the account number for PIN debit transactions. Signature debit transactions may be key entered if you are unable to swipe the card.
  • Don’t require a signature for debit card transactions made with use of a PIN.
  • Don’t complete a debit card transaction that has not been authorized. If you cannot obtain an authorization at the time of sale, you should request another form of payment from the cardholder and instruct the cardholder to contact the issuer to find out why a transaction has been declined.
  • Don’t prompt for PIN for a return transaction.
  • Don’t establish a minimum or maximum transaction amount for debit network transactions made via PIN.

You may offer cash back to your customers for debit network transactions that are processed through the use of a PIN. You may set a minimum and maximum amount of cash back that you will allow. If you are not currently offering this service, your POS device may require additional programming to begin offering cash back as long as it is supported by the debit network.

An adjustment is a transaction that is initiated to correct a debit card transaction that has been processed in error.

Both the cardholder and the card issuing bank have the right to question or dispute a transaction. If these questions or disputes are not resolved, a chargeback may occur. You are responsible for the amount of all chargebacks and all related fees and amounts.  An adjustment may be initiated for many reasons, including:

  • The cardholder was charged an incorrect amount, whether too little or too much.
  • The cardholder was charged more than once for the same transaction.
  • A processing error may have occurred that caused the cardholder to be charged even though the transaction did not complete normally at the point of sale.
  • A cardholder is disputing the goods or services provided.

All parties involved in processing adjustments and chargebacks are regulated by timeframes that are specified in the operating rules of the applicable debit networks, the card organizations, the Electronic Funds Transfer Act, Regulation E, and other applicable law.

Finally, please note that if Equipment or any other point of sale device has been enabled to accept Debit Network Transactions though use of a PIN, but such Equipment or device has not processed any Debit Network Transactions through the use of a PIN for eighteen (18) months or longer, we may deactivate the PIN functionality for such Equipment or device without providing you prior notice.

Electronic Benefit Transfer (EBT) Transactions

We offer electronic interfaces to Electronic Benefit Transfer (“EBT”) networks for the processing, settlement, and switching of EBT transactions initiated through the use of a state-issued EBT card at your point of sale terminal(s) so that EBT recipients may receive EBT benefits.  EBT Benefits may include cash benefits and benefits offered by the United States Department of Agriculture, Food and Nutrition Service (“FNS”); the Supplemental Nutrition Assistance Program (“SNAP”); and the Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”).

If you accept EBT transactions and/or provide EBT benefits:

Do's

  • Do provide EBT benefits to EBT recipients in accordance with applicable law and the procedures set out in the Quest rules, in the amount authorized through your terminal, upon presentation by an EBT recipient of an EBT card and such EBT recipient’s entry of a valid PIN.
  • Do use terminals, PIN pads, printers and other equipment that meet required standards (including those set out in the Quest rules) during your normal business hours and in a manner consistent with your normal business practices.
  • Do comply with the procedures set out in the Quest rules for authorization of EBT benefits if your terminal fails to print EBT benefit issuance information as approved and validated as a legitimate transaction.
  • Do provide a receipt for each EBT transaction to the applicable EBT recipient.
  • Do provide EBT benefits for EBT recipients from all states and US Territories.
  • Do adequately display any applicable state’s Marks, including the Quest Marks, and other materials supplied by us in accordance with the standards set by the applicable state.
  • Do use any Marks only to indicate that EBT benefits are issued at your location(s).
  • Do maintain adequate cash on hand to issue EBT service provider authorized cash benefits.
  • Do issue cash benefits to EBT recipients in the same manner and to the same extent cash is provided to your other customers.

Don'ts

  • Don’t designate and direct EBT recipients to special checkout lanes restricted to use by EBT recipients unless you also designate and direct other customers to special checkout lanes for debit cards or credit cards and/or other payment methods such as checks other than cash.
  • Don’t resubmit any EBT card transaction except as specifically permitted by the applicable Quest rules and procedures.
  • Don’t require, or in your advertising suggest, that any EBT recipient must purchase goods or services from you as a condition to receiving cash benefits, unless such condition applies to other customers as well.

You are solely responsible for the provision of any EBT benefits other than in accordance with authorizations received from the EBT service provider.
If an authorized terminal is not working or the EBT system is not available:

Do's

  • Do manually accept EBT cards and manually provide EBT benefits in the amount authorized through the applicable EBT service provider to the EBT recipients at no cost to the EBT recipients upon presentation by an EBT recipient of their EBT card.
  • Do obtain an authorization number for the amount of the purchase from the applicable EBT service provider while the respective EBT recipient is present and before you provide the EBT recipient with any FNS, SNAP and WIC benefits, or cash benefits, as applicable.
  • Do properly and legibly enter the specified EBT recipient, clerk and sales information, including the telephone authorization number, on the manual sales draft.
  • Do clear all manual vouchers authorizations on your terminal within 15 days after the date of applicable voice authorization. If a voucher expires before it has been cleared by your terminal for payment, no further action can be taken to obtain payment for the voucher.

Don'ts

  • Don’t attempt to voice authorize a manual EBT transaction if the EBT recipient is not present to sign the voucher. The EBT recipient must sign the voucher. You must give a copy of the voucher to the EBT recipient at the time of authorization and retain one copy for your records.
  • Don’t re-submit a manual sales draft for payment for a transaction if you have not received an authorization number.
  • Don’t mail vouchers requesting payment.

You are solely responsible for (and you will not be reimbursed in respect of) a manual transaction if you fail to obtain  an authorization number from the applicable EBT service provider or otherwise fail to process the manual transaction in accordance with the Quest rules.


Part 2

This part of this Procedures Guide reviews essential elements of a transaction, including authorizations, issuing refunds and exchanges, and handling special transactions like recurring payments. You’ll also find information about chargebacks and processes to put in place to help you avoid chargebacks. Feel free to contact Customer Service with any questions that arise as you review this information.

Authorizations

General

  • You must not attempt to obtain an authorization approval code from anyone other than us, unless we have authorized you to use a third party authorization system. An authorization approval code from any other source may not be valid.
  • When using the Address Verification Services (AVS), you must review the AVS response separately from the authorization response and make your own decision about whether to accept the transaction. A transaction may receive an authorization approval code from the card issuing bank even if AVS is unavailable or reflects that the address provided to you does not match the billing address on file at the card issuing bank.
  • You must submit an authorization reversal if you elect not to complete a transaction after an authorization was obtained (including when AVS does not match).
  • If you receive a referral response to an attempted authorization, you must not:
    • Submit the transaction without calling for and receiving a voice authorization; or
    • Attempt another authorization on the same card through your terminal.
  • You must not attempt to obtain multiple authorizations for a single transaction. If a sale is declined, do not take alternative measures with the same card to obtain an approval of the sale from other authorization sources. Instead, request another form of payment.
  • If you fail to obtain an authorization approval code or if you submit a card transaction after receiving a decline (even if a subsequent authorization attempt results in an authorization approval code), your transaction may result in a chargeback and you may be assessed fines, fees, penalties, assessments, and other amounts for which you are responsible.
  • To mitigate the threat of force-post fraud, effective January 26, 2019, acquirers must grant force-post functionality to you only under specific conditions and in a controlled environment. For card present transactions, it is highly recommended that you use your electronic authorization device to swipe (magnetic stripe), tap/wave (contactless), or insert (chip) cards.

Card Not Present Transactions
It is highly recommended that you obtain the three digit card verification code on the back of the card and that you include this code with each card not present transaction authorization request unless the transaction is a recurring transaction. For recurring transactions, submit the card verification code only with the first authorization request and not with subsequent authorization requests. For Discover Network card not present transactions, please also refer to Appendix 1.

Authorization via telephone (other than terminal/electronic device users)

  • You must call your designated Voice Authorization Toll Free Number and enter the authorization information into the VRU using a touch tone phone or hold for an authorization representative.
  • If the Voice Authorization Center asks you to obtain identification from the cardholder before issuing an approval code, you must clearly write the appropriate identification source and numbers in the space provided on the sales draft.
  • If the Voice Authorization Center asks you to confiscate a card, do not take any action that will alarm or embarrass the cardholder, and send the card to Rewards Department, P.O. Box 5019, Hagerstown, MD 21740.
  • If the sale is declined, please remember that our operators are only relaying a message from the card issuing bank. The fact that a sale has been declined must not be interpreted as a reflection of the cardholder’s creditworthiness. You must instruct the cardholder to call the card issuing bank.
  • Authorization via telephone runs the same risks as other forms of authorization.  You will be responsible for any chargebacks, fees, fines, penalties, assessments, and other amounts resulting from transactions authorized via telephone.

Authorization via electronic devices

  • If you use an electronic terminal to obtain authorization approval codes, you must obtain the authorization approval codes for all sales through this equipment.
  • If your terminal malfunctions, please refer to your Quick Reference Guide (if applicable) or call Customer Service. Please remember to check your terminal periodically because most terminal problems are temporary in nature and are quickly corrected.
  • If a terminal is moved or if wires are disconnected, causing malfunction, call Customer Service immediately and follow their instructions. You may be responsible for any service charges incurred for reactivation of the terminal.
  • Until the terminal becomes operable, you must call your designated Voice Authorization Toll Free Number and enter authorization information into the VRU using a touchtone phone. During this time, each transaction must be imprinted using a manual imprinter machine.

Third party authorization systems
If you have contracted to use one of our authorization services, you must not use another third party authorization system without notifying Customer Service. Otherwise, we will be unable to successfully research and defend any authorization related chargebacks on your behalf. This delay will significantly decrease your time to research and provide proof of authorization, thus reducing your opportunity to reverse a chargeback.

If you use another authorization network, liability resulting from discrepancies with that network must be resolved between you and that network. We will not research chargebacks resulting from authorization approval codes obtained from another authorization service organization. Such chargebacks will be passed through to you for resolution. If an authorization provided by a third party authorization system is challenged in a chargeback, you must obtain proof (for example, third party authorization logs) from the authorization source and submit it to us within the time frame specified on the chargeback documentation.

Call the following for the following card types, each of which is available 24 hours/day; 7 days/week:
American Express Direct:  1-800-528-2121
JCB, International (For YEN and CAD currency only): 1-800-522-9345
TeleCheck: 1-800-366-1054
Voyager: 1-800-987-6591
WEX (if Processor does not settle your WEX Card transactions): 1-800-492-0669

You must enter manually all approved sales that have been authorized in this manner as “post authorization” transactions into the terminal, once the terminal becomes operational. You must enter all credit transactions into the terminal for data capture. If you receive a referral and subsequently receive an approval, you may be subject to a chargeback. You must imprint the card using a manual imprinter machine to reduce the risk of such a chargeback. For specific procedures on electronic data capture, refer to the terminal operating instructions/user guide. If the terminal malfunctions for more than twenty-four (24) hours, contact Customer Service for further instructions on processing your transactions.

Automated dispensing machines
You must produce records for all transactions originating with automated dispensing machines or limited amount terminals. Such records must include the last four digits of the cardholder account number, merchant’s name, terminal location, transaction date, identification of transaction currency, transaction type (e.g., purchase), authorization code, and amount.

For Discover Network transactions, please refer to Appendix 1 for instructions on how to cancel an authorization.

Partial authorization and authorization reversal
Partial authorization provides an alternative to a declined transaction by permitting a card issuing bank to return an authorization approval for a partial amount. This amount is less than the transaction amount requested because the available card balance is not sufficient to approve the transaction in full. The cardholder is able to use the funds remaining on the card to pay for a portion of the purchase and select another form of payment (in other words, another payment card, cash, check, etc.) for the remaining balance of the transaction.

  • For Mastercard transactions, partial authorization is optional for batch authorized e-commerce transactions, mail order, telephone order transactions and recurring payment transactions.
  • For Discover transactions, partial authorization support is optional for card not present transactions. If you support partial authorizations, a partial authorization indicator must be included in each authorization request.

You must submit an authorization reversal if the authorization is no longer needed, a partial amount of the total authorized is submitted for the settled transaction, or the cardholder elects not to complete the purchase. The transaction sent for settlement must be no more than the amount approved in the partial authorization response. If you wish to support partial authorization functionality, you must contact Customer Service for additional rules and requirements.

Special Types of Transactions

Payment by installments
If a cardholder makes a deposit toward the full amount of the sale price and pays the balance on delivery, please follow the procedures set out in this section.

Do's

  • Do execute two separate sales drafts and obtain an authorization for each sales draft on each transaction date.
  • Do indicate on each sales draft:
    • Whether it is for the deposit or the balance of payment; and
    • The authorization date and approval code.
  • Do submit and seek authorization of each delayed delivery transaction under the same merchant ID number and treat deposits on the card no differently than you treat deposits on all other payment products.
  • Do use the Address Verification Service for each “balance” authorization.
  • Do obtain proof of delivery upon delivery of the services/merchandise purchased.

Don'ts

  • Don’t submit sales data to us relating to the “balance” until the goods have been completely delivered or the services fully provided.

If delivery occurs after the timeframes set out in section 20, obtain a new authorization for the unprocessed portion of the transaction prior to delivery. If the transaction is declined, contact the cardholder and request another form of payment.

Please follow the procedures set out in this section if you permit or require cardholders to make advance payment charges for any of the following types of goods or services:

Advance payment charges
If a cardholder makes a deposit toward the full amount of the sale price and pays the balance on delivery, please follow the procedures set out in this section.

  • Custom-orders (for example, orders for goods to be manufactured to a customer’s specifications).
  • Ticketing for events or entertainment (for example, sporting events, or concerts).
  • Tuition, room, board, and other mandatory fees (for example, library or other student services fees at universities).
  • Tickets for airlines, rail lines, cruise lines, lodging, and other travel-related services (for example, tours or guided expeditions).
  • Vehicle rentals.
  • In store merchandise not immediately available (for example, merchandise pre-purchased for an upcoming sale event or merchandise on layaway).

For all advance payment transactions:

  • Do state your full cancellation and refund policies;
  • Do clearly disclose your intention to receive advance payment; and
  • Before you request an authorization, do obtain written consent from the cardholder to bill the card for an advance payment charge.

The cardholder’s consent must include (1) a detailed description of the goods or services to be provided, and (2) his or her agreement to all of the terms of the sale (including price, any cancellation or refund policies), and the expected delivery date of the goods or services. In addition:

  • Do obtain an authorization approval.
  • Do complete a sales draft.
  • If you cannot deliver the goods or services (for example, because custom-ordered merchandise cannot be fulfilled) and cannot make other arrangements, do immediately issue a credit for the full amount of the advance payment charge.

For card not present transactions involving an advance payment:

  • Do ensure that the sales draft contains the words “Advance Payment”.
  • Within twenty-four (24) hours of the advance charge being authorized, do provide the cardholder with written confirmation (for example, by email or facsimile) that an advance payment charge has been made.  Do include in the written confirmation: (1) a detailed description of the goods or services to be provided; (2) the amount of the charge; (3) the confirmation number (if applicable); (4) the details of any cancellation or refund policies; and (5) the expected delivery date of the goods or services.

Recurring transactions
If you process recurring transactions and charge a cardholder’s account periodically for goods or services
(for example, yearly subscriptions, annual membership fees, etc.), please follow the procedures set out in this section.

Do's

  • Do obtain written cardholder approval for goods or services to be charged on a recurring basis to the cardholder’s account.  Do at least specify in the approval:
    • The cardholder’s name, address, account number and expiration date;
    • The transaction amounts;
    • The timing or frequency of recurring charges;
    • The duration of time for which the cardholder’s approval is granted;
    • For Discover Network transactions, the total amount of recurring charges to be billed to the cardholder’s account (including taxes and tips); and
    • Your merchant ID number.
  • Do obtain an authorization for each transaction.
  • Do include the recurring payment indicator in each authorization request, and as applicable, each batch submission entry.
  • Do indicate on the sales draft “Recurring Transaction” (or “P.O.” for Mastercard transactions) in lieu of the cardholder’s signature.
  • For Discover Network recurring transactions, do include a toll-free customer service number that the cardholder can call to cancel his/her approval for the recurring transaction or to obtain other assistance relating to the recurring transaction.

Don'ts

  • Don’t include partial payments for goods or services purchased in a single transaction.
  • Don’t impose a finance charge in connection with the recurring transaction or preauthorized order.
  • Don’t complete a recurring transaction after receiving a cancellation notice from the cardholder or card issuing bank or after a request for authorization has been denied.

It is highly recommended that you obtain the three digit card verification code on the back of the card (or the four digit verification code on the front of American Express cards) and include that number with the first authorization request. This is not required for subsequent authorization requests.

A positive authorization response for one recurring transaction is not a guarantee that any future recurring transaction authorization request will be approved or paid.

If the recurring transaction is renewed, you must obtain from the cardholder a new written request for the continuation of such goods or services to be charged to the cardholder’s account.

If you or we have terminated your right to accept cards, you must not submit authorization requests or sales data for recurring transactions that are due after the date of such termination.

Stored payment credential transactions
If you store information (including, but not limited to, an account number or payment token) to process future purchases on behalf of the cardholder, follow the procedures set out in this section.

Do's

  • Do include the appropriate data values when a payment credential is being stored for the first time, is used to initiate a stored credential transaction, or is used to identify any unscheduled credentials on file transaction (not recurring).
  • Do submit a valid authorization if an amount is due at the time the payment credential is being stored.
  • Do submit authorization verification if no payment is due at the time the payment credential is being stored.

Don'ts

  • Don’t store a payment credential if either the first payment transaction or account verification is declined.

Card checks
If you accept card checks, you must treat checks from all the Card Organizations that you accept equally (for example, if you accept Mastercard and American Express, your check acceptance policy must treat checks for both of these Card Organizations equally). You should handle these card checks like any other personal check drawn upon a bank in the United States.

Sales Drafts

Do's

  • Do prepare a sales draft for each transaction and provide a copy of the sales draft or transaction receipt to the cardholder at the time the card transaction is completed. An exception is eligible transactions participating in any of the ‘no signature required’ programs.
  • Do only collect transaction data provided directly to you by the cardholder.
  • Do include all of the following information on a single page document constituting the sales draft:
    • The cardholder’s account number;
    • Cardholder’s signature, unless you participate in any of the ‘no signature required’ programs. Note: Mastercard, Discover, and American Express do not require you to obtain signatures at the point-of-sale for credit and/or debit transactions unless required by local and/or state law;
    • Date of the transaction;
    • The total amount of the transaction, including any taxes to be collected, in the approved currency of the sale;
    • Description of the goods and/or services involved in the transaction—if there are too many items, combine them into one description (for example, “clothing”) to ensure that all information is contained on a single page;
    • Description of your merchandise return and credit/refund policy;
    • A valid authorization code; and
    • Merchant’s Doing Business As (“D/B/A”) name and location (city and state required) and merchant ID number.

Discover
The merchant identification number is optional but if provided for Discover, include only the last four digits; and if the card has a magnetic stripe and the POS device fails to read the magnetic stripe, or if you are required to obtain a voice authorization, you must also use a manual imprinting machine to make a clear impression of the card on the same side of the signed sales draft. If you work in the face-to-face sales environment, you may include the card verification code in the authorization request for US domestic key-entered transactions in lieu of taking a manual card imprint, with the exception of Discover.

Visa
Merchants operating in a card present environment that have certified EMV chip card acceptance should note they will no longer be required to support manual key entry transactions and instead can do so at their option. In addition, merchants operating in a card present environment should note they will be prohibited under Visa rules from submitting CVV2 data on card present transactions and that CVV2 data will not be considered a possible remedy for fraud chargebacks where the cardholder alleges they did not participate in a transaction.

Mastercard
Merchants operating in a card present environment should note they will no longer be required to support manual key entry transactions and instead can do so at their option. In addition, merchants operating in a card present environment should note they will be prohibited under Mastercard rules from submitting CVC2 data on card present transactions that are EMV chip or contactless read. Additionally, Mastercard will no longer consider a manual card imprint with the cardholder’s signature a possible remedy for fraud chargebacks where the cardholder alleges they did not participate in a transaction.

Don'ts

  • Don’t include the card expiration date or any more than the last four digits of the card number in the copy of the sales draft which you provide to the cardholder.
  • When imprinting sales drafts, you must not alter the cardholder account number, circle or underline any information on the sales draft, or alter a sales draft in any way after the transaction has been completed and signed. Stray marks and other alterations on a sales draft may result in it becoming unreadable or illegible.

If you participate in the Visa Easy Payment Service (“VEPS”) (Visa’s ‘no signature required’ program), Quick Payment Service and/or Small Ticket, you are required to provide the cardholder with the completed sales draft only when requested by the cardholder.

If you are operating under certain merchant category codes (“MCC”) approved by a Card Organization, you are not required to:

  • Provide a transaction receipt, unless requested by the cardholder; or
  • Obtain the cardholder’s signature, provided that you transmit the full track data in the authorization request and the sale amount is below the applicable program floor limit:
    • Visa - $25 or less, with the exception of grocery stores (MCC 5411) and discount stores (MCC 5310) for which the floor limit is $50.
    • See also earlier in this section regarding “no signature required” programs.
Refunds

Do's

  • Do provide clear instructions to your customers regarding returns, including the following:
    • Customer service telephone number.
    • Reference number for the return.
    • Expected processing time for the credit.
    • Return address, preferably on a pre-formatted shipping label (if applicable).
  • Do document your cancellation policy and terms and conditions on the contract the cardholder signs, or on your website, as applicable.
  • Do create a credit draft containing the following information for every refund:
    • The account number.
    • The cardholder’s  name.
    • Your name, city, state and MID.  MID is optional.  If you provide your MID for a Discover Network transaction, you must only include the last four digits of the MID for that transaction.
    • Transaction type.
    • A description of the goods or services.
    • The transaction date of the credit.
    • The total amount of the credit.
    • For Discover Network transactions, the approved currency used and the signature of your authorized representative or employee.
  • Do submit all credit drafts to us within the timeframes set out in section 20.
  • Do submit each credit under the establishment where the credit originated.
  • Do provide full refunds for the exact dollar amount of the original transaction including tax, handling charges, etc., and in no circumstances provide a refund amount for more than the original card sale amount.
  • Do write clearly all amounts and other handwritten information; stray marks on the credit draft will render it illegible.
  • If the card cannot be swiped for any reason, do imprint the credit draft with the same card used by the cardholder to make the original purchase when applicable.
  • Do ensure that the cardholder signs the credit draft, give the cardholder the appropriate copy, and deposit the credit draft immediately.

Don'ts

  • Don’t circle or underline any information on the credit draft.
  • Don’t credit an account that differs from the account used for the original transaction.
  • Don’t include the card expiration date or any more than the last four digits of the card number in the copy of the credit draft which you provide to the cardholder.
  • Don’t give cash, check credit refunds or other consideration for card sales, with the exception of the following types of Visa transactions only:
    • Visa Easy Payment Service Transaction (Visa’s ‘no signature required’ program).
    • The recipient of the gift is not the cardholder.
    • Visa prepaid card transactions if the cardholder states that the Visa prepaid card has been discarded.
  • Don’t intentionally submit a sale and an offsetting credit at a later date solely for the purpose of debiting and crediting your own or a customer’s account.
  • Don’t process a credit transaction after a chargeback has been received.

Authorization is not required for credits. Visa, Discover and Mastercard are mandating that all purchase return transactions be authorized for clients that are processing more than USD 10 Million in estimated annualized return volume. Airlines are exempt. Contact Customer Service for more information.

Your website must communicate your refund policy to your customers and require your customers to select a “click-to-accept” or other affirmative button to acknowledge the policy. The terms and conditions of the purchase must be displayed on the same screen view as the checkout screen that presents the total purchase amount, or within the sequence of website pages the cardholder accesses during the checkout process.

Exchanges

For an even exchange, no additional paperwork is necessary and you may simply follow your standard company policy. For an uneven exchange, you must complete a credit draft, and follow the procedures outlined in section 12 for the total amount of the goods returned. The cardholder’s account will be credited for that amount. Then, complete a new sales draft for the total amount of any new goods purchased.

Business Track

Once your Merchant Account Application is approved, you will need to enroll in in the Business Track portal for access to ClientLine and Dispute Manager. Together, these tools provide online access to merchant statements, allow you to manage disputes and respond to Chargebacks, and provide you other functionality and information. Within Business Track, we recommend you enroll to receive three types of email alerts: (1) Daily Account Summary; (2) Dispute Activity; and (3) Monthly Statement Availability. If you do not set up your Business Track account and enroll in Dispute Manager, you will not be able to challenge Chargebacks or address other disputes (other than via mail or fax).

Chargebacks, Retrievals and Other Debits

Chargebacks
Both the cardholder and the card issuing bank have the right to question or dispute a transaction. If such questions or disputes are not resolved, a chargeback may occur. You are responsible for all chargebacks, all chargeback fees that we may charge, and all related fees, fines, penalties, assessments, and other amounts arising from your transactions.

Due to the short time frames and the supporting documentation necessary to successfully (and permanently) reverse a chargeback in your favor, we strongly recommend that you:

  • Adhere to the guidelines and procedures outlined in this Procedures Guide.
  • Investigate any chargebacks you receive and, if you dispute the chargeback, submit the appropriate documentation within the required time frame.
  • Whenever possible, contact the cardholder directly to resolve the dispute (except with respect to a Discover Network cardholder with whom direct contact regarding the dispute is prohibited by Discover Network rules).
  • Call Customer Service if you have any questions.

You must not process a credit transaction once a chargeback is received, even with cardholder authorization, as the credits may not be recoverable and you may be financially responsible for the credit as well as the chargeback. Instead, the card issuing bank will credit the cardholder’s account.

Chargeback process
If the card issuing bank submits a chargeback, we will send you a chargeback notification by fax, mail or to your Business Track account, depending upon the delivery method set for your account, which may also include a request for transaction documentation. Due to the short time requirements imposed by the Card Organizations, it is important that you respond to a chargeback notification and transaction documentation request within the time frame set out in the notification.

Upon receipt of a transaction documentation request, you must immediately retrieve the requested sales draft(s) using the following guidelines:

  • Make a legible copy, centered on 8-1/2 x 11-inch paper (only one (1) sales draft per page).
  • Write the ‘case number’ from the request for transaction documentation on each copy/page.
  • If applicable, make copies of a hotel folio, car rental agreement, mail/phone/Internet order form, or other form of receipt.
  • If a credit transaction has been processed, make a copy of the credit draft; letters are not acceptable substitutes for sales drafts.
  • Fax or mail legible copies of the sales draft(s) and credit drafts, if applicable, to the fax number or mail address provided on the request form, or upload them to the case in Dispute Manager with your retrieval or chargeback action.
  • If you fax your response, please (i) set your fax machine to print your fax number and name on the documents that you send, and (ii) set the scan resolution on your fax machine to the highest setting. We can use this information to help determine where the documentation received originated from if additional research is required, and the higher resolution setting improves the clarity of characters and graphics on the documentation transmitted and helps reduce the number of illegible fulfillments and/or chargebacks.

We strongly recommend that you also include a detailed rebuttal letter along with all pertinent documents when responding to a transaction request or a chargeback notification (for example, rental agreement, imprinted portion of the invoice or sales draft, the portion signed by the cardholder, and the area where the authorization codes, with amounts and dates, are located).

If the information you provide is both timely and sufficient to warrant a re-presentment of the transaction and/or reversal of the chargeback, we will do so on your behalf. However, re-presentment and/or reversal is/are ultimately contingent upon the card issuing bank and/or cardholder accepting the transaction under applicable Card Organization Rules. Re-presentment or reversal is not a guarantee that the chargeback has been resolved in your favor.

If we do not receive a clear, legible and complete copy of the transaction documentation within the timeframe specified on the request, you may be subject to a chargeback for “non-receipt” for which there is no recourse.

If you do not dispute the chargeback within the applicable time limits as set by the Card Organization Rules, you will forfeit your reversal rights. Our only alternative, which is available for Visa and Mastercard only, is to attempt a “good faith collection” from the card issuing bank on your behalf for non-fraud chargeback reason codes. This process can take up to six (6) months and must meet the card issuing bank’s criteria (for example, at or above a set dollar amount). Good faith collection attempts are not a guarantee that any funds will be collected on your behalf. Card issuing banks normally charge good faith collection fees, which are deducted from the transaction amount if accepted in addition to any processing fees that are charged by us.

The card issuing bank may charge a handling fee which will be debited from your settlement account or settlement funds if a transaction documentation request results from a discrepancy between the sales draft and the transmitted record regarding the name of your business; the city, state, or country listed for your business; and/or the transaction date.

Visa: If we reverse the chargeback and re-present the transaction to the card issuing bank, the card issuing bank, at its sole discretion, may elect to submit the matter for arbitration before Visa. Visa currently charges a $250 filing fee and a $250 review fee; such amounts may change at any time. Whether or not a decision is made in your favor, you will be responsible for all such fees and charges and any other applicable fees and charges imposed by Visa. Such fees and charges will be debited from your settlement account or settlement funds, in addition to the chargeback.

STAR: If we reverse the chargeback and re-present the transaction to the card issuing bank, the card issuing bank, at its sole discretion, may elect to submit the matter for arbitration before STAR. Whether or not a decision is made in your favor, you will be responsible for all fees and charges relating to that arbitration and any other applicable fees and charges imposed by STAR. Such fees and charges will be debited from your settlement account or settlement funds, in addition to the chargeback.

Mastercard: If we reverse the chargeback and re-present the transaction to the card issuing bank, the card issuing bank, at its sole discretion, may elect to resubmit the chargeback. In such event, at our discretion, we will debit your settlement account or settlement funds for the chargeback. However, if you feel strongly that it is an invalid chargeback, we may, on your behalf and at your request, submit the matter for arbitration before Mastercard, which could be subject to a fee. Whether or not a decision is made in your favor, you will be responsible for all such fees and charges, and any other charges imposed by Mastercard. Such fees and charges will be debited from your settlement account or settlement funds, in addition to the chargeback.

Discover Network: If Discover Network rejects our re-presentment request and you feel strongly that the chargeback is invalid, we may, at our discretion and on your behalf and at your request, submit the matter for dispute arbitration before Discover Network. Discover Network charges acquirers fees for re-presentment requests and matters submitted to Discover Network for arbitration. We, in turn, may charge you fees for these items.

American Express: You may request a chargeback reversal if the chargeback was applied in error, provided that (i) you have responded to the original inquiry within the specified timeframe set out in your dispute notification, and (ii) you have provided all supporting documentation to substantiate the error.

Chargeback reasons
The following section outlines the most common types of chargebacks. This list is not exhaustive. Within each group, we have included recommendations on how to reduce the risk of chargebacks. These are recommendations only, and do not guarantee that you will eliminate chargebacks.

Chargebacks due to authorization
Description – Proper authorization procedures were not followed and valid authorization was not obtained.

Likely scenarios

  • Authorization not obtained.
  • Authorization was declined.
  • Transaction processed with an expired card and authorization was not obtained.
  • Transaction processed with an invalid account number and authorization was not obtained.
  • Card Recovery Bulletin (CRB) or Exception File was not checked (transactions below floor limit).

Recommendations to help reduce risk of chargeback

  • Obtain valid authorization on the day of the transaction.
  • If you receive the following responses:
    • Decline –  request another form of payment from the cardholder.
    • Referral – follow the voice procedures to obtain a valid authorization and obtain an imprint of the card.
    • “Pick-up” – means that the card issuing bank is asking for the card to be returned – you must not accept the card for payment and, in addition, you may retain the card and send it to us so that we can arrange for its return to the card issuing bank.
  • You must not exceed any predetermined thresholds for specific POS device types as specified by each Card Organization.
  • You must ship goods within the timeframe set out in section 20, after you have obtained authorization.

Chargebacks due to cancellation and returns
Description – Credit was not processed properly or the cardholder has canceled and/or returned items.

Likely scenarios

  • Cardholder received damaged or defective merchandise.
  • Cardholder continued to be billed for canceled recurring transaction.
  • Credit transaction was not processed.

Recommendations to help reduce risk of chargeback

  • Issue credit to the cardholder on the same account as the purchase in a timely manner.
  • Do not issue credit to the cardholder in the form of cash, check or in-store/merchandise credit as we may not be able to recoup your funds if the transaction is charged back.
  • For recurring transactions, cancel recurring transactions as soon as you receive notice of cancellation from the cardholder and issue the appropriate credit as needed to the cardholder in a timely manner if requested by the cardholder; notify the cardholder within 10 days (domestic) and 15 days (international) in advance of each billing, allowing the cardholder time to cancel the transaction.
  • Provide proper disclosure of your refund policy for returned/canceled merchandise or services to the cardholder at the time of the transaction.
  • If applicable, the words “NO EXCHANGE, NO REFUND,” etc. must be clearly printed in 1/4-inch lettering on the sales draft near or above the cardholder signature.
  • For e-commerce transactions, provide disclosure on your website on the same page as check out.  Require the cardholder to click to accept prior to completion.
  • For card not present transactions, provide the cancellation policy at the time of the transaction.
  • For any Travel & Entertainment (T&E) transaction, provide cancellation numbers to cardholders when the services are canceled.
  • Ensure delivery of the merchandise or services ordered to the cardholder.
  • Participate in recommended fraud mitigation tools.

Chargebacks due to fraud
Description – Transactions that the cardholder claims are unauthorized, the account number is no longer in use or is fictitious, or the merchant was identified as “high risk.”

NOTE: For Visa transactions, to ensure that you preserve your chargeback rights, you must:

  • Complete a retrieval request and/or provide a sales slip that contains all required data elements.
  • Respond to all retrieval requests with a clear, legible copy of the transaction document that contains all required data elements within the specified timeframe.

Likely scenarios

  • Multiple transactions were completed with a single card without the cardholder’s permission.
  • A counterfeit card was used and proper acceptance procedures were not followed.
  • Authorization was obtained; however, full track data was not transmitted.
  • The cardholder states that they did not authorize or participate in the transaction.

Recommendations to help reduce the risk of chargeback in card present transactions:

  • Obtain an authorization for all transactions.
  • For recurring transactions, cancel recurring transactions as soon as you receive notice of cancellation from the cardholder and issue the appropriate credit as needed to the cardholder in a timely manner if requested by the cardholder; notify the cardholder within 10 days (domestic) and 15 days (international) in advance of each billing, allowing the cardholder time to cancel the transaction.
  • If you are utilizing an electronic device to capture card data, swipe, dip or wave all card transactions through your electronic authorization device to capture cardholder information. When applicable, ensure the displayed cardholder number matches the number on the card.
  • You should avoid keying the card data into your electronic authorization device unless you are unable to capture the card data through one of the above methods. If you do key the card data into your electronic authorization device, it is highly recommended that you also key in the three or four digit verification code. Otherwise, you should imprint the card using a valid imprinting device that will capture the embossed card and merchant information. You must write on the manually imprinted draft all pertinent information relating to the transaction (transaction date, dollar amount, authorization code and merchandise description) and obtain the cardholder signature. Do not alter the imprint on the draft in any way. You are not protected from this type of chargeback by manually entering the information into the POS device.

NOTE: Do not imprint on the back of a signed sales draft. The imprint must be on the transaction document that contains all transaction elements to prove the card was present at the time of the transaction.

  • Obtain the cardholder signature for all transactions; ensure the signature on the sales draft matches the signature on the back of the card.
  • Process all transactions one time and do not batch out transactions multiple times.
  • Educate staff on procedures to eliminate point of sale fraud.

Card Not Present Transactions:

  • Ensure delivery of the merchandise or services ordered to the cardholder.
  • Participate in recommended fraud mitigation tools, including:
    • Verified by Visa Program
    • Mastercard SecureCode
    • Address Verification Services (AVS) (required)
    • Use of card verification code

NOTE: While transactions utilizing these tools may still be disputed and result in a chargeback, the service may assist you with your decision of whether to accept certain cards for payment.

  • Ensure you ship to the AVS confirmed address (bill to and ship to must match).
  • Obtain authorization for all transactions.
  • Ensure merchant descriptor matches the name of the business and is displayed correctly on the cardholder statement.
  • Ensure merchant descriptor includes correct business address and a valid customer service number.

Chargebacks due to cardholder disputes
Description – Goods or services are not received by the cardholder, or merchandise is defective or not as described.

Likely scenarios

  • Services were not provided or merchandise was not received by the cardholder.
  • Cardholder was charged prior to merchandise being shipped or merchandise was not received by agreed upon delivery date or at location indicated by cardholder.
  • Cardholder received merchandise that was defective, damaged, or unsuited for the purpose sold, or did not match the description on the transaction documentation/verbal description presented at the time of purchase.
  • Cardholder paid with an alternate means and their card was also billed for the same transaction.
  • Cardholder canceled service or merchandise and their card was billed.
  • Cardholder was billed for a transaction that was not part of the original transaction document.
  • Cardholder claims to have been sold counterfeit goods.
  • Cardholder claims the merchant misrepresented the terms of sale.

Recommendations to help reduce risk of chargeback

  • Provide services or merchandise as agreed upon and described to the cardholder and clearly indicate the expected delivery date and shipping location (if applicable) on the sales receipt or invoice.
  • Contact the cardholder in writing if the merchandise or service cannot be provided or is delayed, and offer the cardholder the option to cancel if your internal policies allow.
  • If the cardholder received defective merchandise or the merchandise received was not as described, resolve the issue with the cardholder at first contact.
  • If the merchandise is being picked up by the cardholder, have them sign for the merchandise after inspecting that it was received in good condition.
  • Do not charge the cardholder until the merchandise has been shipped, according to the agreed upon terms, and a signed proof of delivery from the cardholder is obtained.
  • If unable to provide services or merchandise, issue a credit to the cardholder in a timely manner.
  • Accept only one form of payment per transaction. Ensure the cardholder is only billed once per transaction.
  • Do not bill cardholder for loss, theft or damages unless authorized by the cardholder.
  • Ensure that a description of the service or merchandise provided is clearly defined.

Chargebacks due to processing errors
Description – Error was made when transaction was processed or it was billed incorrectly.

Likely scenarios

  • The transaction was not deposited within the Card Organization’s specified timeframe.
  • The cardholder was issued a credit draft, but the transaction was processed as a sale.
  • The transaction was to be processed in a currency other than the currency used to settle the transaction.
  • The account number or transaction amount used in the transaction was entered incorrectly.
  • A single transaction was processed more than once to the cardholder’s account.
  • The cardholder initially presented the card as payment for the transaction. However, the cardholder decided to use an alternate form of payment.
  • A limited amount or self-service terminal transaction was processed for an amount over the pre-determined limit.

Recommendations to help reduce risk of chargeback

  • Process all transactions within the Card Organization’s specified timeframes.
  • Ensure all transactions are processed accurately and only one time.
  • If a transaction was processed more than once, immediately issue voids, transaction reversals or credits.
  • Ensure that credit transaction receipts are processed as credits and sale transaction receipts are processed as sales.
  • Ensure all transactions receive a valid authorization approval code prior to processing the transaction. Also obtain a legible magnetic swipe or imprinted sales draft that is signed.
  • Do not alter transaction documentation or make any adjustments unless the cardholder has been contacted and agrees to modifications of the transaction amount.
  • Ensure limited amount, self-service and automated fuel dispenser terminals are set properly to conform to the pre- determined limits.

Chargebacks due to non-receipt of information
Description – Failure to respond to a retrieval request or the cardholder does not recognize the transaction.

Likely scenarios

  • The transaction documentation was not provided to fulfill the retrieval request.
  • The retrieval request was fulfilled with an illegible sales draft or was an invalid fulfillment (incorrect sales draft or the sales draft did not contain required information that may include signature).
  • The cardholder does not recognize or is unfamiliar with the transaction due to the merchant name and/or location not matching the name and/or location where the transaction took place.

Recommendations to help reduce risk of chargeback

  • Provide a clear and legible copy of the sales draft that contains all required data elements within the required timeframe that is specified on the retrieval request.
  • Ensure that the most recognizable merchant name, location and/or customer service phone number is provided on all transactions.
  • Retain copies of all transaction documentation for the required timeframe that is specified by each Card Organization.
  • Develop efficient methods to retrieve transaction documentation to maximize ability to fulfill requests.
Suspect/Fraudulent Transactions

If the card being presented or the behavior of the person presenting the card appears to be suspicious or you otherwise suspect fraud, you must immediately call the Voice Authorization Center and ask to speak to a Code 10 operator. Answer all their questions and follow their instructions.

While not proof that a transaction is fraudulent, the following are some suggestions to assist you in preventing fraudulent transactions that could result in a chargeback:

Does the cardholder:

  • Appear nervous/agitated/hurried?
  • Appear to be making indiscriminate purchases (for example, does not care how much an item costs, the size, etc.)?
  • Make purchases substantially greater than your usual customer (for example, your average transaction is $60, but this transaction is for $360)?
  • Insist on taking the merchandise immediately (for example, no matter how difficult it is to handle, is not interested in free delivery, alterations, etc.)?
  • Appear to be purchasing an unusual amount of expensive items or the same items?
  • Take an unusual amount of time to sign the sales draft, or look at the back of the card as he signs?
  • Talk fast or carry on a conversation to distract you from checking the signature?
  • Take the card from a pocket instead of a wallet?
  • Repeatedly come back, in a short amount of time or right before closing time, to make additional purchases?
  • Cause an unusual, sudden increase in the number and average sales transactions over a one-to three-day period?
  • Tell you he has been having some problems with his card issuing bank and request that you call a number (that he provides) for a “special” handling or authorization?
  • Have a previous history of disputed charges?
  • Place orders to be shipped to an address other than the billing address, or use anonymous/ free email domains?
  • Place orders sent to zip codes or countries where you show a history of fraudulent claims?

Does the card:

  • Have characters the same size, height, style and all within alignment?
  • Appear to be re-embossed (the original numbers or letters may be detected on the back of the card)?
  • Have a damaged hologram?
  • Have a Magnetic Stripe on the back on the card?
  • Have an altered signature panel (for example, appear discolored, glued or painted, or show erasure marks on the surface)?
  • Have “valid from” (effective) and “valid thru” (expiration) dates consistent with the sale date?
  •  

We also recommend that you are vigilant for any cardholder who behaves as follows, specifically in relation to prepaid cards:

  • Frequently makes purchases and then returns the goods for cash.
  • Uses prepaid cards to purchase other prepaid cards.
  • Uses large numbers of prepaid cards to make purchases.

Gift cards, jewelry, video, stereo, computer and camera equipment, shoes and men’s clothing are typically fraud-prone because they easily can be resold. Also be suspicious of high dollar amounts and transactions with more than one fraud prone item (for example, two laptops, three gold chains, etc.).


Part 3

In this part of this Procedures Guide you’ll find helpful information about what to do if a card is left at your business, how long you must retain copies of records, how to return equipment and important transaction timeframes. This is also where you’ll find additional guidelines for certain specific industries.

Lost/Recovered Cards

If a card is left behind and remains unclaimed, you should call the appropriate Card Organization’s customer service team via the number below and they will instruct you on how to handle it:

Visa: 1-800-847-2911
Mastercard: 1-800-424-7787
Discover: 1-800-DISCOVER (1-800-347-2683)
AMEX: 1-800-528-2122

Retention of Records

You must securely retain legible copies of all sales drafts and credit drafts or any other transaction records for the following periods:

Mastercard, Visa, and STAR: thirteen (13) months from the transaction date. Five (5) years for healthcare sales drafts and credit drafts.

Discover Network: the longer of (i) 365 days or (ii) the resolution of any pending or threatened disputes, claims, disagreements or litigation involving the card transaction. You must also keep images or other copies of sales drafts for no less than three (3) years from the date of the Discover Network transaction.

American Express: 24 months from the date on which you submitted the sales draft or credit draft to us. You must provide all sales drafts and credit drafts or other transaction records requested by us within the shortest time limits established by Card Organization Rules.

Reserved Timeframes

Balancing / Reconciling
Reconcile / balance your accounts for each location daily, for Credit Card transactions, debit card transactions, and all other transactions, and notify us within 24 hours of any issues.

Authorizations
A positive (approved) authorization response remains valid for:

  • Seven (7) days for Mastercard electronic processed transactions
  • Ten (10) days for Visa, Discover, and STAR electronic processed transactions subject to the following exception:
    • Thirty (30) days for Visa and Discover
    • Twenty (20) days for STAR for the following Industries:
      • Car rental; airline and passenger railway; lodging; and other Travel & Entertainment (T&E) categories
  • Seven (7) days for American Express electronic processed transactions, except thirty (30) days for American Express Travel & Entertainment (T&E) categories

Delayed deliveries
If delivery is more than:

  • Seven (7) days (Mastercard, Visa, American Express, and STAR transactions)
  • Ten (10) days (Discover Network)

after the original transaction date and the initial authorization request, you must reauthorize the unprocessed portion of the transaction prior to delivery.

Refunds
You must submit all credit drafts to us within five (5) days of determining that a credit is due.

Additional Provisions for Specific Industries

Merchants in the lodging industry
There are additional rules and requirements that apply to merchants in the lodging industry for practices including, but not limited to, guaranteed reservations and charges for no shows, advance deposits, overbookings, and priority checkout.

If you are a lodging merchant and wish to participate in the Card Organization lodging services programs, please contact your sales representative or relationship manager for details and the appropriate Card Organization requirements.

You must provide the cardholder with written confirmation of a guaranteed reservation. The confirmation must contain:

  • Cardholder’s name as it appears on the card, if present.
  • The last four digits of the card number, and truncated, formatted, provided, and otherwise handled as required by Applicable Law and Card Organization Rules.
  • Card expiration date if present, unless prohibited by Applicable Law or Card Organization Rules.
  • Reservation  confirmation number.
  • Anticipated arrival date and length of stay.
  • The cancellation policy in its entirety, inclusive of the date and time the cancellation privileges expire.
  • Any other pertinent details related to the reserved accommodations.

If a cardholder requests a cancellation in accordance with your cancellation policy and specified time frames, you must provide the cardholder with a cancellation number and instructions to retain a record of it.

If a cardholder requests a written confirmation of the cancellation, you must provide this confirmation to the cardholder within three (3) business days of such request. For the purposes of this section, a “business day” means Monday through Friday, excluding Bank holidays.

The cancellation confirmation must contain:

  • The cardholder’s reference that charges were placed on the card, if applicable, or a guarantee that a “no-show” charge will not be placed on the card.
  • The cardholder’s name as it appears on the card, if present.
  • The last four digits of the card number, and truncated, formatted, provided, and otherwise handled as required by Applicable Law and Card Organization Rules.
  • The card expiration date if present, unless prohibited by Applicable Law or Card Organization Rules.
  • The reservation cancellation number.
  • The date of cancellation.
  • The name of your employee that processed the cancellation.
  • Any other pertinent information related to the reserved accommodations.

Pre-authorization for Travel & Entertainment (T&E) and restaurant merchants
If you are a business engaged in providing travel and/or entertainment services (for example, car rentals, hotels, motels, etc.) or a restaurant business, and if you engage in the practice of “pre-authorization”, you must comply with the following general procedures:

  • Hotel, motel, or car rental merchant may obtain an estimated authorization at the time of check-in.
  • Restaurants must not add an estimated tip amount to the authorization request beyond the value of the goods provided, or services rendered, plus any applicable tax.
  • You must notify the cardholder of the dollar amount you intend to “Pre-Authorize”.
  • If the customer decides to use another form of payment (for example, cash, check, etc.), you must promptly call the Voice authorization Response Unit to delete the authorization hold. Provide the cardholder’s account number, original dollar amount and date of the transaction, and the authorization code. If a new transaction takes place, a new imprinted and signed sales draft for the exact amount and a new authorization code for that amount must be obtained.
  • VEHICLE RENTAL PROVIDERS MAY NOT INCLUDE POTENTIAL VEHICLE DAMAGE OR INSURANCE DEDUCTIBLES IN ANY PREAUTHORIZATIONS.
  • If you receive a decline on a transaction, you must wait twenty-four (24) hours before attempting to reauthorize. If you reauthorize prior to this time frame and receive an approval, you may be subject to a chargeback and fines imposed by the Card Organizations.
  • Hotels, motels, and car rental merchants are allowed up to a 15% variance above the amount authorized. If the final amount charged to the cardholder exceeds the original estimate by more than 15% above the preauthorization, you must authorize any additional amounts, and all incremental authorization codes must be written in the authorization area along with the date of authorization and the amount authorized.
  • Pre-authorization for certain establishments’ services are allowed up to a 20% (instead of 15%) variance above the amount authorized. If the final amount exceeds the amount “preauthorized” by more than 20%, you must authorize the additional amount. Estimating the authorization amount to include a tip is prohibited. The authorization request must include only the amount associated with the bill presented to your customer.
  • You must obtain an authorization for the initial estimated charges and then monitor the charges to ensure that the actual charges made do not exceed the estimated charges. If the actual charges exceed the amount of the initial estimated authorization (and any subsequent estimated authorizations), then you must secure a positive authorization for the additional amount. Subsequent authorizations must only be for the additional amount of total charges, and must not include any amounts already authorized.
  • The estimated amount of any pre-authorization for lodging accommodations must be based on: (i) the intended length of stay; (ii) the room rate; (iii) applicable taxes and service charges; and (iv) other miscellaneous charges as dictated by experience.
  • If an authorization request is declined, no charges occurring after that date will be accepted for that cardholder.
  • You do not need to obtain a final authorization if the total sum of charges (the final amount) does not exceed 20% of the previously authorized charges. You must record the dates, authorized amounts, and their respective authorization approval codes on the sales draft(s).

Merchants operating vending machines
For Mastercard, if you are operating vending machines under MCC 5499 (Miscellaneous Food Stores-Convenience Stores, Markets, Specialty Stores), you need not provide a receipt at the time a transaction is conducted. However, if a vending machine cannot provide a printed receipt, you must disclose and post instructions advising cardholders how a receipt may be obtained.

Telecommunication service providers
You must contact Customer Service for approval and further instructions, rules and requirements before conducting telecommunication transactions.

Telecommunication card sales occur when a telephone service provider is paid directly using a card for individual, local, or long-distance telephone calls, with the exception that prepaid telephone service cards are not and do not give rise to telecommunication card sales.

The petroleum industry
For Visa, Mastercard, STAR, American Express, and Discover transactions, merchants operating in the petroleum industry that conduct card sales at Automated Fuel Dispensers (AFDs), may submit an authorization request for $1 to verify the validity of the card presented. Under such circumstances, you must submit an authorization advice message for the actual amount of the card sale within sixty (60) minutes of completion of fuel delivery regardless of whether you previously received a partial authorization response or a positive authorization response for any other amount. If you do not complete the card sale following receipt of an approved authorization response for any amount, a request to cancel the authorization request must be submitted within sixty (60) minutes of the completion of fuel delivery.


Appendix 1 – Additional Provisions for Discover Network

DISCOVER NETWORK PROTOCOL FOR INTERNET TRANSACTIONS
Each internet Discover Network card transaction accepted by you and submitted to us must comply with Discover Network standards, including, without limitation, Discover Network standards governing the formatting, transmission and encryption of data, referred to as the “designated protocol”.

You are permitted to accept only those internet Discover Network card transactions that are encrypted in accordance with the designated protocol. As of the date of this Procedures Guide, the designated protocol for the encryption of data is Secure Socket Layer (SSL).

We may, at our discretion, withhold settlement until security standards can be verified. However, the designated protocol, including any specifications with respect to data encryption, may change at any time upon thirty (30) days advance written notice. You are not permitted to accept any internet Discover N ated protocol.

AUTHORIZATIONS
etwork card transaction unless the transaction is sent by means of a browser that supports the design

Card Not Present Transactions
For Discover Network card not present transactions (as with other card not present transactions), you must verify the name and billing address of the Discover Network cardholder using the Address Verification System (AVS).

Discover Network procedure for request for cancellation of authorization
If a Discover Network card sale is canceled or the amount of the transaction changes following your receipt of authorization for the sale, you must process an authorization reversal via your POS device or, for voice-approved authorizations, call your Authorization Center directly and request a cancellation of the authorization. An authorization may be canceled at any time within ten (10) days of your receipt of the authorization, but must be canceled before the sales data relating to the transaction is submitted to us, after which the authorization cannot be changed. For an authorization cancellation, you must provide us with the following information, in this order:

  • The Discover Network merchant number used in the authorization.
  • The card number.
  • The original amount of the authorization being canceled.
  • The new amount of the total transaction (if any).
  • The original authorization code for the authorization being canceled.
  • The expiration date of the card.
  • A brief reason for the authorization cancellation.

Discover Network Cash Over Transactions
Cash over transactions are only available for Discover Network.

You may issue cash over in connection with a Discover Network card sale, provided that you comply with the terms on which you are authorized to accept cards, including the following requirements:

  • You must deliver to us a single authorization request for the aggregate total of the goods/ services purchase amount and the cash over amount of the card sale. You may not submit separate authorization requests for the purchase amount and the cash over amount.
  • The sales draft must include both the purchase amount and the cash over amount, and you may not use separate sales drafts for the purchase amount and cash over amount.
  • Cash over may only be offered with a card present card sale that includes a purchase of goods or services by the cardholder. You must not issue cash over as a stand-alone transaction. If you offer cash over, you may require the total amount of a card sale with a credit product, including cash over, to meet a minimum transaction amount of up to $10. You must not assess or charge fees of any type or amount, including any surcharges, on cash over transactions. You must not include in cash over transactions any of the fees or charges applicable to cash advances.
  • Cash over may not be dispensed in connection with credits, cash advances, or any card sale for which you are unable to electronically capture Track Data using the POS device.
  • The maximum amount of cash that you may issue as cash over is $100.

Cash over may not be available in certain markets. Contact Customer Service for further information.

Use and Display of Program Marks
You will prominently display, at each of your locations and on your web site, advertising and promotional materials relating to the Discover Network Program in such manner and with such frequency as you accord any other third-party credit, charge, debit, stored value, or other payment card offered.

You must prominently display, at each of your locations and in catalogs and Web sites, signage, decals, or logos showing the Discover Acceptance Marks and the Diners Club International Acceptance Marks in such manner and with such frequency as accorded any other third-party credit, charge, debit, stored value, or other payment card accepted. You must limit use and display of the Discover Marks in accordance with the terms of the Merchant Agreement and in accordance with Card Organization Rules.


Appendix 2 – Additional Provisions for WEX, Voyager, And Fleet

WEX Card Transactions

Do's

  • Do complete a WEX Card sale only upon the receipt of an Authorization approval.
  • To the extent permitted by Applicable Law, do provide a copy of the receipt for a WEX Card sale upon the request of the WEX Cardholder, which shall not include the full account number or driver identification number.
  • Do require the WEX Cardholder to sign a receipt when a WEX Card sale is not completed by an island Card reader.
  • Do take all commercially reasonable efforts to protect WEX Manual Card Sales data from fraud or misuse.
  • Do retransmit WEX Card sales data when reasonably requested to do so.

Don'ts

  • Do not submit a WEX Card transaction for processing when a WEX Card is not presented at the time of the WEX Card sale.
  • Do not submit a WEX Card transaction for processing until the goods have been delivered or services performed.
  • Do not accept a WEX Card where the WEX Card appears to be invalid or expired, there is reasonable belief that the WEX Card is counterfeit or stolen, or an expired card/decline message is received.
  • Do not divide the price of goods and services purchased in a single WEX Card sale among two or more sales receipts or permit a WEX Card sale when only partial payment is made by use of the WEX Card and the balance is made with another bank Card.

Additional Requirements:

  • All Authorization request data for WEX Card sales must include WEX Cardholder account number; vehicle number; WEX Card expiration date; driver identification number; and the amount of the transaction, date and time of the transaction, quantity of goods sold, unit price, and product code (the “WEX Authorization Request Data”). The type of goods sold, quantity of goods sold, unit price/price per gallon (if applicable), taxes, and any coupons presented within the product detail of a transaction must be accurate. Product detail presented must equal the total amount of the sale when calculated.
  • If you are unable to submit a WEX Card transaction electronically, you must capture the transaction through the use of a suitable imprinter to legibly imprint the WEX Card on the sales draft and you must require the WEX Cardholder to sign the sales receipt (“WEX Manual Card Sales”).
  • All WEX Manual Card Sales must include an Authorization number or other approval code from WEX along with the WEX Authorization Request Data.
  • You acknowledge that fuel tax removal at the point of sale is not permitted. For all payment system product codes that are taxable, the transaction dollar amount and price per gallon (“PPG”) must contain the sum of the fuel cost and PPG inclusive of all applicable federal, state, county, local, and other fuel taxes.

Voyager and Fleet Transactions

Do's

  • Do check Fleet Cards for any printed restrictions at the point of sale.

Don'ts

  • Unless required by law, do not give any cash refunds to any Voyager Cardholder in connection with a sale.

Additional Requirements:

  • In addition to other requirements in these Payments Acceptance Procedures and the Merchant Agreement, you shall establish a fair policy for the exchange and return of merchandise. You shall promptly submit credits to us for any returns that are to be credited to a Voyager Cardholder’s account.  
  • All Authorization request data for Voyager Card sales must include the Voyager Cardholder’s account number; Card expiration date and driver identification number; the amount, date, and time of the transaction; quantity of goods sold; unit price; and product code (the “Voyager Authorization Request Data”).  The type of goods sold, quantity of goods sold, unit price/price per gallon (if applicable), taxes, and any coupons presented within the product detail of a transaction must be accurate. Product detail presented must equal the total amount of the sale when calculated.
  • All manual Voyager Card sales (i.e., sales facilitated by an imprinter) must include an Authorization number or other approval code from Voyager along with the Voyager Authorization Request Data.
  • You acknowledge that fuel tax removal at the point of sale is not permitted. For all payment system product codes that are taxable, the transaction dollar amount and PPG must contain the sum of the fuel cost and PPG, inclusive of all applicable federal, state, county, local, and other fuel taxes.
  • If an increase in the number of Voyager transaction Authorization calls from you not due to our or Voyager system outages in excess of 15% for a given month as compared to the previous month occurs, we may, in our discretion, deduct telephone charges, not to exceed $0.25 (25 cents) per call, for the increased calls, from your settlement of your Voyager transactions.
  • For daily transmission of sales data, you shall securely maintain true and complete records for a period of not less than thirty-six (36) months from the date of the generation of the data. You may store records on electronic media, if secure. You are responsible for the expense of retaining sales data records.  This is in addition to any data, information, and document retention requirements arising under the Merchant Agreement, Card Organization Rules, and Applicable Law.

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