Chargebacks & Retrievals Expand Your Knowledge
Agenda The Philosophy Dispute Process Overview and Timeline Retrieval Request Overview and Recent Changes/Trends Chargeback Overview and Recent Changes/Trends Disputes, Procedures and Prevention Tips
The Philosophy
The Philosophy Federal Fair Credit Billing/Banking Laws (i.e. Reg Z and Reg E) Multi Party Model = Cardholders, Merchants, Issuers, Acquirers Common Regulation Violations = Chargeback Reason Codes Liability Shift between Issuers and Acquirers
Dispute Process Overview and Timeline
Chargeback & Representment Flow The Basic Flow Cardholder Issuing Bank Acquiring Bank Card Companies Merchant
Disputes Life Cycle of a Dispute 1. Retrieval 2. 1 st Chargeback 120 to 180 Days (timeframe extensions apply) 3. Representment aka Chargeback Reversal 45 Days from CB processing date from Issuer 4. Visa/Discover Only Pre-Arbitration/Arbitration request 30/60 Days from Representment processing date from Acquirer 5. MasterCard Only 2 nd Chargeback - 45 Days from Representment processing date from Acquirer 6. MC Pre-Arbitration/Arbitration request - 45 Days from CB processing date from Issuer
What is a Retrieval Request
What is a Retrieval Request Retrieval Requests A Retrieval Request is a request initiated by a Cardholder directly to their Payment Card Issuing Bank. This could be the first step in the chargeback process or the Cardholder is questioning the transaction and/or requesting more information. Issuing Banks may also initiate a retrieval request for investigation purposes. When a request is received, a legible copy of the Salesdraft of the transaction in question needs to be produced and faxed or mailed back within the specified time-frame. If the Merchant fails to respond to the request within the Association mandated time-frame, the Cardholder s Issuing Bank may have Compliance Violation Rights which in turn will shift liability back to the Acquirer.
What is a Retrieval Request Retrieval Fulfillment Receipt Requirements In order to fulfill a Retrieval Request, a Transaction Receipt must contain the following legible data elements: Account Number (truncated) Transaction Date Transaction Amount Authorization Code (if any) Merchant Name and Location Description of merchandise or services (if applicable) Ship To Address (if applicable) If the Transaction was conducted in a Card-Absent Environment, a Substitute Transaction Receipt may be provided that contains the above listed elements
Record Retention Record Retention Transaction receipts should be stored at the Merchant location or at a central site if part of a chain. This includes all paperwork related to the transaction; sales slips, manual imprint slips, invoices, shipping documents, etc. It is recommended that transaction receipts be stored for at least 13 month as per Association Regulations.
Retrievals Recent Changes Recent Changes/Trends Increased Compliance Filings Visa and MasterCard phased out chargeback reason codes 79 and 4801- Nonfulfillment of a retrieval request Non-fulfillment no longer a sub reason for all other chargeback reason codes Issuing banks filing Compliance Violations with Associations claiming financial loss citing salesdraft not retained within 13 months of trans date or missing signature Trending due to full swipe protection from Fraud Chargebacks due to recent V/MC regulation changes Tip: Issuer must specifically claim how and why they are at a financial loss. General statements are usually not accepted. For example, Regulation Z with no other explanation is common and is a point of contention for Acquirer.
What is a Chargeback
What is a Chargeback A chargeback is the process an Issuing Bank uses to handle a disputed transaction. Issuing Banks are given certain rights under the Payment Card Association rules to reverse a sales transaction. Chargebacks can be initiated by the Cardholder or by the bank itself. Chargebacks arise for several reasons including fraudulent cards, fraudulent transactions, erroneous data submissions/processing errors, and duplicate authorizations. Additionally, chargebacks are performed due to Cardholder dissatisfaction of a transaction due to undelivered goods or services, defective merchandise, or non-receipt of merchandise/service
Chargebacks cont d Continued Merchants may dispute chargebacks dependent upon the chargeback reason code. The dispute of a chargeback is referred to as a Representment. In order to represent a chargeback, it must be performed within the specific time frame allowed for that chargeback reason code. All chargeback reason codes carry a different representment time frame. Additionally, the proper documentation must be provided.
Chargebacks Recent Changes Recent Changes/Trends Visa Compelling Evidence Recent Visa revision allowing compelling evidence to be presented during the Represenment Phase of for the following Chargeback Reason Codes: 30- Services not provided or merchandise not received 53- Not as described or defective merchandise 76- Incorrect currency or transaction code or domestic transaction processing violation 81- Fraud- Card present environment 83- Fraud- Card absent environment
Chargebacks Recent Changes Recent Changes/Trends Visa Compelling Evidence cont.
Chargebacks Recent Changes Recent Changes/Trends Increased usage of MasterCard code 4841- Cancelled Recurring Transactions MasterCard 4841 revision as of October 2013 Terms and conditions for recurring transactions must be clearly detailed to the cardholder Recurring Terms and conditions must be separate and distinct from general terms and conditions of sales. Merchants are not allowed to use general terms and conditions to enroll a cardholder into a recurring transactions.
Disputes, Procedures and Prevention Tips
Prevention Tips If the terminal is not working or the card s magnetic stripe cannot be read, key enter the account information and make an imprint of the embossed information onto the sales receipt using a manual imprinter or obtain a CVC2 authorization. Do not complete transactions if the authorization request was declined or no authorization has been completed. Do not repeat the authorization process after receiving a decline. Utilize Address Verification Service (AVS) for all non-face to face transactions. AVS will verify that the address the customer provided is also the billing address of the account number being used. Disclose policies regarding returns, refunds or service cancellation, at the time of the transaction. These policies should be pre-printed on the sales receipts; if not, write or stamp the policy information near the signature line before the customer signs. Process all transactions as quickly as possible, preferably within one to five business days of the authorization date.
Contact Information Questions and Answers Contact Information Chargeback Support Phone # 800-999-8674 Chargeback Fax # 516-962-7834 Chargeback Email: chargeback.group@goevo.com Fax Notification Registration: Contact EPSG All ISO s/ Sales Thank Reps you call for the attending chargeback the Webinar. support phone number for assistance