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How to Sell Online
Merchant account processing are services provided by a bank or a third party processor (on behalf of the bank), to the merchant that include authorization of credit cards, settlement of funds through the bank associations (MasterCard/Visa), depositing of funds to checking accounts, merchant billing and account activity reporting. vImerchant Internet Payment Gateway (iPG) allows you to process orders online.
Operating Procedures Guide Overview
Change of Information
Compliance Programs, Visa and Mastercard
How to Read Your Statement
Definitions, Glossary
Operating Procedures Guide Overview
The following Operating Procedures focus primarily on the MasterCard and Visa Associations' (the "Associations") operating rules and regulations, and seek to provide you with the principles for a sound card program. They are designed to help you decrease your Chargeback liability and train your employees. For settlement of transactions involving cards other than MasterCard and Visa, you should also consult those independent card issuers' proprietary rules and regulations.
Honoring Cards
The following rules are requirements established and strictly enforced by Visa and MasterCard:
- You cannot establish minimum or maximum amounts as a condition for accepting a card.
- You cannot impose a surcharge or fee for accepting a card.
- You may require the card member supply personal information (e.g. home or business phone number, delivery address) for the purposes of delivery only.
- Any tax or shipping and handling must be included in the total transaction amount.
- You may not submit any transaction representing refinance or transfer of existing cardholder obligation deemed uncollectible.
Authorizations
All transactions must be authorized. Failure to authorize a sales transaction may result in a Chargeback and/or the termination of your sales agreement.
An authorization only indicates the availability of the card member’s credit at the time the authorization is requested. It does not warrant that the person presenting the card is the rightful card member, nor is it an unconditional promise or guarantee that you will not be subject to a Chargeback or debit.
For cards other than MasterCard and Visa (e.g., AMEX, Novus/Discover, JCB, etc.), you must follow the procedures for authorization and acceptance for each.
At the point of sale, the expiration date should be requested from the card member. Do not accept a card after the expiration date. Otherwise, you are subject to a Chargeback and could be debited for the transaction.
A card member may not authorize another individual to use his/her card for purchases.
Refunds and Exchanges
If you establish special refund/exchange terms or other specific conditions for credit card sales, the words "No Exchange, No Refund", etc. must be clearly displayed.
NOTE: A qualifying statement does not completely eliminate your liability for a Chargeback because consumer protection laws frequently allow the card member to return disputed items.
Refunds
You must promptly complete and submit a credit transaction (with your name, city, state, and merchant account number) for the total amount of the refund due a card member. Full refunds must be for the exact dollar amount of the original transaction including tax, handling charges, etc. (You must identify the shipping and handling charges incurred). A description of the goods or services is required. Failure to process a credit within five (5) calendar days may result in a Chargeback. Authorization is not required for refunds. You cannot intentionally submit a sale and an off setting credit later solely for the purpose of debiting and crediting your own or a customer's account.
Exchanges
No additional paperwork is necessary for an even exchange. Just follow your standard company policy.
For an uneven exchange, complete a credit record for the total amount of only the merchandise returned. The card member’s account will be credited for that amount. Then, complete a new sales record for any new merchandise purchased.
Visa Recurring Transaction Regulation
If you process recurring transactions and charge a card member’s account periodically for recurring goods or services (e.g. subscriptions, membership fees, etc.), the card member shall complete and deliver to you a written request for such goods or services to be charged to his account. The written request must at least specify the:
Transaction amounts Frequency of recurring charges Duration of time for which the card member’s permission is granted.
You must retain the written request for the duration of the recurring services.
If the recurring transaction is renewed, the card member shall complete and deliver to you a subsequent written request for the continuation of such goods or services to be charged to the card member’s account.
You must not complete a recurring transaction after receiving a cancellation notice from the card member or a response to an authorization request that the card is not to be honored.
Deposits of Principals
Owners, partners or officers of your business establishment are prohibited from depositing sales transacted on their own personal bankcards, other than transactions for valid purchases of goods or services (e.g., cash advances are prohibited).
Sales and Credit Record Data Retention
You are prohibited from engaging in mail/telephone/Internet order transactions unless you indicated on your original Client Application/Sales Agreement that you accepted or planned to accept such transactions or you have received subsequent written approval to do so. Failure to adhere may result in cancellation.
Since you will not have an imprinted or magnetically swiped transaction and you will not have the card member’s signature as part of the sales record as you would in a face to face transaction, you will assume all risk associated with accepting a mail/telephone/Internet order transaction. It is with this in mind that we recommend the following:
On The Sales Record, You Must Retain:
The card member’s account number
The expiration date
Date of transaction
A description of the goods and services
The amount of the transaction (including shipping, handling, insurance, etc.)
The card member’s name, billing address and ship to address.
Authorization code
Merchant's name and address (city and state required).
Itemized charges
AVS response code
For mail/telephone/Internet order authorization inquiries, you must obtain the expiration date of the card. If a card member’s account is invalid, the sale will result in a summary adjustment, electronic reject, or a Chargeback. On the sales record information, denote that the transaction was via Internet. Utilization of Address Verification Service (AVS) is necessary for Internet transactions. You may not submit a transaction for processing until after the merchandise has been shipped or the service has been provided to the customer. (Visa will permit the immediate billing of merchandise manufactured to the customer's specifications, (i.e., special/custom orders) provided the card member has been advised of the billing details). Notify the card member of delivery timeframes, special handling or of a cancellation policy. If, after the order has been taken, additional delays will be incurred (e.g., out of stock), notify the card member.
Submission of Sales For Merchants Other Than Your Own Business
You may present for payment only valid debts that arise from a transaction between a bona fide card member and your establishment. If you deposit or attempt to deposit sales between card members and any business other than your business, you will be subject not only to a Chargeback, but also to immediate termination of your Agreement and/or legal action.
Media Retention and Retrieval Request Elements
If you deposit via magnetic tape, electronic transmission, or electronic data capture terminal, and hold your sales records (media), it is your responsibility to respond to all media retrieval request within the required timeframes. You are responsible for retaining and providing copies of transactions for a minimum of three (3) years (seven years required for Visa International transactions, i.e., Visa transactions outside the United States or Visa cards issued by foreign banks).
When we fax you a Media Request List, you have twelve (12) business days from the date of request to fax us a clear and legible copy of the sales record along with the index numbers from the Media Request List. If you are unable to respond to the request within twelve (12) days you will be subject to a Chargeback.
If you do not own a fax machine, we will mail you the request. Immediately, send us a clear and legible copy of the sales record, along with a copy of the Media Request List
If possible, arrange to fax the information back to us at the telephone fax number provided.
The required elements to fulfill a retrieval request are:
Visa
Cardholder Account Number
Card Expiration Date
Cardholder Name
Transaction Date
Transaction Amount
Authorization Code
Merchant Name
Merchant Location
Description of service/merchandise -- itemized charges
Ship to Address (if applicable)
AVS response code (if used and the response code is available) If the retrieval request comes in for "Request for copy bearing signature", the merchant must provide a copy of the order form with the cardholder's signature
MasterCard
Cardholder Account Number
Cardholder Name
Card Expiration Date
Merchant Name
Merchant Location
Transaction Date
Authorization Code
Description of merchandise or service
Ship to Address (if applicable)
Transaction Amount
AVS response code (if available)
If a retrieval request results from a difference in the following information on the sales record and transmitted record: merchant name or an incorrect city, state, foreign country and/or transaction date, a $25.00 handling fee may be charged by the issuing bank and may be debited from your account.
If you do not respond or respond late to a media retrieval request, there is no recourse for a non-receipt of requested item (sales record). Effective October 1, 1994, chargebacks for "non receipt of requested item" can no longer be reversed unless the request draft was provided when initially requested.
Association rules and regulations require that a merchant must make a good faith attempt and be willing and able to resolve any disputes directly with the card member. It is a violation of Association rules and regulations to rebill a customer for a transaction that was charged back.
Chargebacks
The term "Chargeback" refers to a returned transaction resulting from the lack of adherence to the conditions of the Sales Agreement, Association regulations, or these Operation Procedures, and result in the debiting of your merchant account.
Your merchant account may also be debited in the event the bank is required to pay bankcard Association fees, charges, fines, penalties or other assessments as a consequence of your sales activities. Such debits shall not be subject to the limitation of time specified elsewhere in the Sales Agreement or these Operating Procedures.
We may cause your bank account to be debited for the actual or contingent Chargeback amount owed to the bank, pursuant to the Sales Agreement between you, and the bank. The process is by virtue of an ACH Agreement between you and the bank.
Chargeback Process/Dispute
A card member, or the card-issuing bank, has the right to question or dispute a transaction. In most cases, before a Chargeback is initiated, the card issuing bank request a copy of the sales record, via a "Media Request" or "Retrieval". Once a Media Request or Retrieval is received from the card issuer, we will respond by sending a copy of the transaction, if available.
If the information provided is sufficient to warrant a reversal of the Chargeback, and within the applicable timeframe, we will do so on your behalf, but reversal is contingent upon acceptance by your customer's card issuing bank under Visa and MasterCard guidelines. If the Chargeback is reversed, the card issuing bank does have the right to re-present the Chargeback a second time.
If the charge is not disputed within the applicable time limit set forth by MasterCard and Visa regulations, reversal rights are lost. Our only alternative, on your behalf, is to attempt a "good faith collection" to the card-issuing bank. You will receive only the amount, if any, recovered from the card member’s bank.
Association rules and regulations require that a merchant must make a good faith attempt and be willing and able to resolve any disputes directly with the card member. It is a violation of Association rules and regulations to rebill a customer for a transaction that was charged back.
Chargeback Reasons
The following are the top Chargeback reason codes for which we receive Chargebacks, and how to avoid and dispute them:
1.Cardmember or card issuer requests a copy of the sales record.
To Avoid: Prepare and maintain legible sales records with complete sale and authorization information and/or respond to media retrieval request within the required timeframe.
To Dispute: Within twelve (12) days of the date you were debited fax or mail us a copy of the sales record.
2. Cardholder did not authorize the transaction (primarily for mail/telephone/Internet orders; recurring transaction [repetitive billing]; pre-authorized health card transactions).
To Avoid: Mail/telephone orders -- follow recommended procedures defined in this Operating Procedures Guide. Recurring transaction -- ensure your customers are fully aware of the condition of the type of transaction. Use Address Verification Service.
To Dispute: Within twelve (12) days of the date you were debited: Provide a copy of sales record, invoice, or order form. Provide a signed delivery receipt ( UPS, Fed Ex, etc.) showing name and address the merchandise was delivered to if available. Provide a signed form and/or invoice acknowledging card member’s participation in a recurring transaction. If possible, contact the card member directly to resolve the inquiry/dispute. Submit a letter in writing with supporting documentation stating why you believe the Chargeback may be improper or invalid.
3. Non-matching account number (transaction was processed on an account not found on an issuer's master file).
To Avoid: Mail/Telephone/Internet Orders -- If possible, contact the cardholder to verify the account number or request another form of payment. If an incorrect number was used, re-authorize and re-deposit the transaction using the correct number.
To Dispute: Within twelve (12) days of the date you were debited: Provide a copy of sales record. Submit a letter in writing with supporting documentation stating why you believe the Chargeback may be improper or invalid. If possible, contact the card member to verify the account number or request another form of payment. If an incorrect number was used, authorize and redeposit the transaction using the correct number.
4. Transaction was processed more than once to the same card member.
To Avoid: Settle and reconcile daily. Ensure that the total amount settled and submitted balances with the credit card records of the transactions.
To Dispute: Within twelve (12) days of the date you were debited: Provide two different sales records. Submit a letter in writing with supporting documentation stating why you believe the Chargeback may be improper or invalid.
5. Credit not processed -- the card member is claiming that a credit voucher or refund acknowledgment issued by you was not processed.
To Avoid: Process credits daily. All credits must be applied to the account to which the debit originally posted. Do not issue in-store or merchandise credit.
To Dispute: Within twelve (12) days of the date you were debited: Provide a copy of the credit record, date credit was processed, and the deposit total that included the credit. Submit a letter in writing with supporting documentation stating why you believe the Chargeback may be improper or invalid.
6. No authorization.
To Avoid: Authorize all transactions.
To Dispute: Within twelve (12) days of the date you were debited: Submit a letter in writing with supporting documentation stating why you believe the Chargeback may be improper or invalid and include any authorization data that you may have. If you used a third party (i.e., American Express) to authorize, you must contact them immediately for proof of authorization (e.g., authorization log) and submit to us.
7. Non-receipt of merchandise -- card member is claiming they did not receive the merchandise or merchandise was paid for by other means.
To Avoid: Do not process a transaction until merchandise is shipped. If a customer has paid for merchandise by another method, do not process the transaction.
To Dispute: Within twelve (12) days of the date you were debited, provide proof that the merchandise was received (i.e., UPS, Fed Ex, etc. tracer and delivery receipt; signed invoice, customer name and delivery address). If possible, contact the card member directly to resolve the inquiry/dispute. Submit a letter in writing to Banc One Payment Services with supporting documentation stating why you believe the Chargeback may be improper or invalid.
8. Card used before effective date of after expiration date.
To Avoid: Do not process a transaction prior to the effective date. Do not process a transaction after the expiration date.
To Dispute: Provide a printed sales record, invoice, or order form showing that the transaction was processed after the effective date or before the date of expiration. Submit a letter in writing to Banc One Payment Services with supporting documentation stating why you believe the Chargeback may be improper or invalid. If possible, contact the cardmember for another form of payment.
The following is a list of reasons for other Chargebacks. We may add to or delete from this list as changes occur in the Association rules or operational requirements:
1.Services not rendered: Merchant did not provide services. Services were paid by another method (i.e., cash, check, or another card).
2. Error in addition was made when calculating transaction amount.
3. Incorrect or invalid account number.
4. A valid authorization was not obtained for a transaction and card member neither authorized nor participated in transaction.
5. Cardmember credit was posted/processed as a debit or a debit was posted/processed as a credit.
6. Transaction was processed for an incorrect amount.
7. Not as described: goods or services received by the card member did not match merchant's written, mail/phone/Internet order or merchant's verbal description.
8. Claim or defense: local, state and/or federal law required the card issuer to credit a card member’s account and no other Chargeback right was available (card member tried to resolve dispute with the merchant and was still dissatisfied).
9. Defective merchandise: shipped merchandise was received in defective condition or otherwise unsuitable for purpose sold.
10. Several drafts (sales records) were imprinted at same merchant location but cardmember acknowledged participation in only one transaction.
11. Counterfeit transactions.
12. Account number was listed on the exception file.
13. Transaction was completed after authorization was declined.
14. Transaction was not processed within MasterCard or Visa timeframes.
15. No (card member) signature was obtained and card member neither authorized nor participated in transaction, or no outstanding valid card exists.
16. Cardmember claims merchant changed amount of transaction (sales draft) without permission.
17. Fraudulent transaction occurred with a merchant who has a prior history of fraudulent transactions.
18. Limited amount terminal (terminal is specifically programmed for specific type of merchants) transaction exceeded limited amount.
19. Authorization code invalid.
20. Suspicious transaction, e.g., knowingly participating in a fraudulent transaction.
21. Invalid sale: lost/stolen, counterfeit/altered or other invalid transaction which although correctly authorized, may be charged back in full or in part in accordance with MasterCard International or Visa, USA regulations.
22. Cardmember was denied right to return item.
23. Cardmember cancelled order, cancellation number received.
Chargeback Reversals/Collections
If your dispute and documentation supports a reversal of the Chargeback to the card issuer, and is received within the MasterCard and Visa reversal timeframes, we will reverse the item back to the card issuer and your account will be credited. It is important to note that the reversal is contingent upon the acceptance by the card issuer and/or the card member. The item may be represented a second time and your account will be debited accordingly. A reversal is not a guarantee that the Chargeback has been resolved in your favor.
If the Chargeback is presented by the card issuer a second time, it cannot be reversed and you may be debited. If you feel strongly that it is an invalid Chargeback, you may request us to have MasterCard or Visa review and arbitrate the item to determine the validity. Both MasterCard and Visa have a $150 filing fee and a $250 review fee; both fees may be non-refundable and may be debited to your account. In addition, if the decision is ruled in favor of the card member and/or card issuing bank, an additional penalty may be assessed and debited to your account.
If your dispute and documentation supports your case, but is received after the MasterCard and Visa timeframes, our only alternative is to attempt a 'good faith' collection with the card-issuing bank. This process can take from 30 to 180 days, the transaction must meet the card issuer's collection criteria (e.g., above a set dollar amount; within a specified time limit; etc.), and the card issuer may assess a collection fee (e.g., $25 to $100). A 'good faith' collection is not a guarantee that any funds will be collected on your behalf. You will be credited, when and if, the card issuer accepts the collection and makes payment (less any fees charged by the card issuer).
Due to the short time frames and the supporting documentation necessary to successfully (and permanently) reverse a Chargeback in your favor, we strongly recommend the following:
- Avoid Chargebacks by adhering to the guidelines and procedures outlined in this guide.
- If you do receive a Chargeback, investigate, and if you dispute the Chargeback, contact us immediately.
- Whenever possible, contact the card member directly to resolve the inquiry/dispute.
- If you have any questions, call Customer Services and they will assist you (or they will refer you to someone who can).
Other Debits
The following is a list of reasons for other debits. We may add or delete to this list as changes occur in the bankcard Association rules or operational requirements:
1.Bankcard Association fees, charges, fines, penalties, or other assessments because of client's sales activities.
2. Currency conversion was incorrectly calculated.
3. Discount not previously charged.
4. Reversal of deposit was posted to your account in error.
5. Debit for summary adjustment not previously posted.
6. Reversal of credit for deposit previously posted.
7. Debit for Chargeback never posted to your account.
8. Association Merchant Chargeback Monitoring Fee Excessive Chargeback Handling Fee.
9. Failure of transaction to meet Member Controller Authorization Service ("MCAS") - card member account number on exception file.
10. Original transaction currency (foreign) not provided.
11. Travel Voucher exceeds maximum value.
Debit and/or fee for investigation and/or Chargeback costs related to termination of Sales Agreement for cause, or for costs related to collection activities including reasonable attorney fees.
- Shipping and handling fees.
- Incorrect merchant descriptor (name and/or city, state) submitted.
- Incorrect transaction date submitted.
- Interchange fees.
Summary Deposit Adjustments/ Electronic Rejects
Occasionally, it is necessary for the bank to adjust the dollar amount of your summaries/submissions (deposits) and facilitate the crediting or debiting of your account accordingly. The following is a list of the most frequent reasons for Summary (Deposit) Adjustments/ Electronic Rejects:
- Your summary reflected an arithmetic error.
- Submitted sales not included in your Sales Agreement (i.e., Diners Club, American Express, and Discover).
- The dollar amount is unreadable/illegible.
- The card member’s account number is unreadable/illegible.
- Duplicate sales record submitted.
- Credit card number is incorrect/incomplete.
- Summary indicated credits, but no credits were submitted.
Disputing chargebacks, adjustments, rejects
In order to quickly resolve disputed Chargebacks, debits, and summary adjustments, it is extremely important that these issues/items be sent to the address on the request. (If the Summary Adjustment is for unreadable or incorrect card member number, resubmit the corrected sales record with your next deposit. Also, if the transaction is over thirty (30) days, you must reauthorize.)
The following information should be obtained from your files:
1.Clear and legible copy of the sales record showing:
Date of sale/credit.
Card member’s account number.
Cardholder's name.
Total amount of the sale Description of goods and services.
Date and authorization approval code.
2. A dated cover letter detailing the reasons for requesting a review of the Chargeback, debit, or summary adjustment and documentation to support your dispute should accompany your sales record. (You should retain a copy of the correspondence and all documentation for your files.) If the inquiry is related to prior correspondence, be sure to include the control number we used previously.
Immediately submit the sales/credit records, all documentation, and your letter.
If you have any questions, please call Customer Services. If you are informed by a Customer Service Representative that additional documentation is required in order to fully review the item; please submit it immediately.
It is strongly recommended that, whenever possible, contact the card member directly to resolve a Chargeback.
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Change of Information
Change of DDA Number (Checking Account)
If you change your DDA number, you must call your Relationship Manager or Customer Services immediately for an Electronic Funding Agreement that must be completed before a change can be made.
Change in Legal Name or Structure
You must call Relationship Management or Customer Services and request a new Sales Agreement.
Change in Company DBA Name, Address, Telephone or Fax Number
Contact Customer Services.
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Compliance Programs, Visa and Mastercard
In an effort to combat credit card fraud and reduce Chargebacks which ultimately lead to higher costs and risk for all parties within our industry, the MasterCard and Visa Associations have developed several programs designed to mitigate fraud risk and control Chargebacks. Guidelines have been established and merchant monitoring programs and reports have been developed to track merchant sales transaction deposit activity.
In the event you exceed the guidelines outlined in each program below and/or submit suspicious transactions as identified on the banks deposit exception reports, you may be subject to:
- Operating procedure requirement modifications.
- Incremental Chargebacks and/or fees.
- Settlement delay or withholding subject to a Banc One Payment.
- Services investigation to validate transactions.
- Termination of your sales agreement.
The bank will make every effort to work on your behalf and support you in defense of Association concerns where we believe you are not at fault or where Association enforcement of unreasonable guidelines is evident.
Visa Compliance Programs
Merchant Chargeback Monitoring Program identifies merchants who demonstrate excessive Chargeback activity. Any merchant with a ratio of Chargebacks to Visa sales volume of 2.5% or more in a 30 day period will be considered excessive if the merchant has at least 50 Visa sales transactions and 30 Chargebacks in a given calendar month, or, at least 100 Chargebacks, regardless of the number of Visa sales transactions.
Visa will assess Chargeback handling fees and other penalties for continued demonstration of excessive Chargebacks. If a merchant demonstrates a critical level of Chargebacks to Visa sales volume during any 30-day period, Visa reserves the right to require the bank to terminate the merchant agreement.
Merchant Review Program monitors all merchant locations for a high occurrence of "Consumer Dispute" Chargebacks, i.e., service or merchandise not received, defective merchandise, credit not received or unauthorized purchaser. Consumer dispute Chargeback ratios which exceed 1% of a merchant's monthly sales volume with at least twenty (20) Chargebacks are considered "high occurrence". Merchant locations generating ratios exceeding 1% for four out of five consecutive months will be subject to restrictions, fines, and possible revocation of Visa card acceptance privileges.
Highly Suspect Potential Fraud. The Risk Identification Service (RIS) is a service provided by Visa U.S.A, to identify merchants generating a disproportionately high percentage of suspect transactions. Suspect transactions are defined as transactions which took place on the day a credit card was reported lost or stolen and may be potential fraud activity. Visa distributes information pertaining to abnormal levels of suspect transactions to the bank on a daily, weekly, and monthly basis. Upon identification of a merchant as highly suspect, the merchant may be required to adhere to special procedures, install fraud-reducing equipment, and may suffer fines.
Visa Confirmed Fraud/Questionable Merchant Activity (QMA) Program As part of Visa's risk management program, all merchants participating in the acceptance of Visa cards are monitored for confirmed fraud transactions. This program tracks fraud transactions by merchant location. Any merchant location meeting or exceeding the program criteria three (3) consecutive months will be considered a QMA (questionable merchant activity) location and will be subject to Chargeback liability (confirmed fraud transactions only) for a minimum of a 90 day period.
MasterCard Compliance Programs
MasterCard Violator Program is when a merchant may be identified as part of the violator program when the percent of fraudulent sales exceeds 8% of total sales for two consecutive months. The merchant location may either be terminated from the MasterCard Acceptance Program or accept Chargeback liability for fraudulent transactions for a minimum of one year, beginning the first day after the two consecutive months violation. At the end of the year, MasterCard staff will review the merchant's fraud activity and determine whether to continue Chargeback liability. The Merchant Violation Program is conducted on a monthly basis, with reports sent to the bank each month. The bank will notify merchants accordingly.
Excessive Counterfeit Program A merchant identified as having excessive counterfeit activity will be subject to Chargeback liability for counterfeit transactions for a minimum of one year. Any merchant location having in a one-month period 5% of its total transaction volume identified as counterfeit and whether (i) the counterfeit dollar volume is a minimum of US$1,000, or (ii) there is a minimum of two counterfeit transactions totaling US$2,500, be required to utilize fraud-reducing equipment. Counterfeit activity is reported to Banc One Payment Services on a monthly basis and clients are notified accordingly.
Excessive Chargeback Special Merchant. Merchant locations having a minimum of 15 Chargebacks and a 10% or more ratios of Chargebacks to sales volume for a period of two consecutive months will be identified as an Excessive Chargeback Special Merchant. Should a merchant location be declared as having excessive chargebacks, issuing banks will be permitted to collect a $25.00 recovery cost for each individual transaction charged back for at least one year beginning with the first day following the two consecutive months that the standards have been exceeded.
MasterCard Audit. MasterCard Security and Risk Management staff reserves the right to monitor and audit member's files and records of a merchant for fraudulent activity. MasterCard's staff will use available sources, including internal studies, analysis, member input and complaints, and information from compliance actions regarding activities which would raise serious concerns as to whether the merchant processed sales transactions which merchant knew or should have known were fraudulent or resulted in excessive cost to the industry.
If, during the course of monitoring the merchant, it is concluded that the merchant is collusive or otherwise fraudulent, the merchant will be declared fraudulent and corrective action will be taken.
If a special audit of a merchant is necessary by MasterCard's staff, an assessment up to $10,000.00 for audit expense recovery may be levied by MasterCard and the merchant's account will be debited accordingly.
Upon the conclusion of a special audit, MasterCard's staff will report their findings to senior management with recommendations for appropriate action, which may include financial and other penalties, including request for cancellation of the merchant agreement and/or expulsion of the merchant from the MasterCard Acceptance Program. Any action may be appealed on behalf of the merchant.
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How to Read Your Statement
If you receive a paper statement, the following guide reviews important features of the statement:
1.Your statement mailing address.
2. Key information including your merchant number, the statement period, and the bank accounts into which we deposit you money and deduct your fees.
3. The customer service phone number for any questions you may have.
4. The address of the store location for this statement.
5. The Outlet Funding Summary is the core of the statement and brings your deposited batches, deductions, and checking account deposits into one consolidated report.
6. The Deposit Summary columns provide summary information on your deposit activity by day.
7. The Financial Summary columns provide the fees and adjustments to your account due to Chargebacks, Chargeback Reversals, Interchange and Assessment Fees, Discount, Other Fees and Financial Adjustments.
8. The Fund Date is the date your deposit was processed for funding.
9. The Total $ Submitted is the net dollar amount of your batch deposits for the day.
10. The Total $ Funded indicates your bankcard deposits that were funded.
11. The $ Paid by 3rd Party indicates your non-bankcard deposits you were funded for in a separate deposit to your DDA (for example, American Express and Discover).
12. The Net $ Funded is the net amount that was deposited into or deducted from your account on the Fund Date.
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Definitions, Glossary
Acquirer A financial institution that maintains the merchant Chargeback credit card processing relationship and receives all transactions from the merchant to be distributed to the card member Banks.
Address Verification A service provided through the bank in which the merchant verifies the card member’s address. Primarily used by Mail/Telephone/Internet order merchants. Not a guarantee that a transaction is valid.
Associations MasterCard International, Visa, U.S.A. or Visa International, which are licensing and regulatory agencies for bankcard activities.
Authorization Approval by, or on behalf of, the card issuer to validate a transaction for a merchant or another affiliate bank. An authorization indicates only the availability of the card member’s credit limit at the time the authorization is requested.
Risk Management A service provided through vImerchant in which a merchant accesses a national negative file database through this application to verify or authorize that the person has no outstanding bad complaints at any of the member merchants. This is not a guarantee of payment to the merchant.
Batch Usually a day's worth of transactions, including sales and credits to be processed by the card processor.
Batch Header Ticket The identifying form used by the electronic submission merchant to indicate a batch of sales/credit records (usually one day's work).
Card member One to whom a credit card has been issued.
Card member Bank The bank that issued a bankcard to an individual. The term is frequently used in conjunction with interchange arrangements to identify the card-issuing bank.
Chargeback A returned transaction resulting from the lack of adherence to the conditions of the Sales Agreement, Association regulations or these Operating Procedures and the resultant debiting of your merchant account.
Credit A refund or price adjustment given for a previous purchase transaction. A number issued to a participating merchant by the Authorization Center that confirms the authorization for a Credit Draft sale or service.
Credit Draft A document evidencing the return of merchandise by a card member to a merchant, or other refund made by the merchant to the card member.
Credit Limit The credit line set by the card issuer for the card member’s account.
Discount Rate The amount a merchant processor charges a merchant to give credit for depositing and handling merchant's daily credit card transactions.
Issuing Bank Card member’s bank or the bank that has issued a MasterCard or Visa card to an individual.
Media The documentation of monetary transactions (i.e., sales drafts, credit records, computer printouts, etc.)
Merchant Sales Agreement The written contractual agreement between a merchant and the clearing bank containing their respective rights, duties, and warranties with respect to the acceptance of credit cards.
Merchant Account Number (Merchant Number) A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.
Transaction Fees Service costs charged to a merchant on a per transaction basis.
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