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1 Rules for visa Merchants card acceptance and Chargeback Management Guidelines Rules for visa Merchants card acceptance and Chargeback Management Guidelines Chapter X Text of Contents Table Introduction .. 1. Purpose and Audience.. 2. Contents .. 3. Section 1: Getting Down to Basics.. 5. visa Transaction Processing From Start to Finish .. 6. visa Rules .. 9. visa Rules for Returns and Exchanges.. 13. visa Rules for PIN-less Payment Brand acceptance .. 15. Dynamic Currency Conversion (DCC) Compliance at the Point of Sale.. 16. Section 2: card Present Transactions.. 19. Doing It Right at the Point of Sale.. 20. visa card Features and Security Elements .. 23. Authorization.. 26. Signature and Identification.. 28. Suspicious Behavior.. 31. Skimming.. 32.

2 Code 10 Calls .. 33. Recovered Cards.. 34. Electron Cards.. 36. visa Travelers Cheques .. 37. Section 3: card -Not-Present Transactions.. 39. Fraud Prevention Guidelines for card -Not-Present Transactions .. 40. Additional Fraud-Prevention Tools for the Internet.. 45. Suspicious Transactions.. 47. Recurring Transactions.. 51. Section 4: visa Cardholder Information Security Program.. 55. CISP Requirements.. 56. Steps and Requirements for Compromise Entities .. 58. Additional Security Requirements.. 60. Section 5: Copy Requests .. 61. Transaction Receipt Requirements card -Present Merchants .. 62. Transaction Receipt Requirements card -Not-Present Merchants .. 63. Responding to Copy Requests.. 64. How to Minimize Copy Requests.. 66. Rules for visa Merchants card acceptance and Chargeback Management Guidelines.

3 2006 visa Inc., all rights reserved, to be used solely for the purpose of providing visa card acceptance services as authorized pursuant to agreement with a visa member financial institution. Table of contents s Section 6: Chargebacks.. 69. Why Chargebacks Occur.. 70. Customer Dispute Chargebacks .. 72. Invalid Chargebacks.. 73. Chargeback Remedies.. 74. Avoiding Chargebacks .. 76. Chargeback Monitoring .. 79. When Chargeback Rights Do Not Apply .. 81. Section 7: Chargeback Reason Codes .. 83. Non-Receipt of Information.. 86. Reason Code 60: Request Copy Illegible or Invalid.. 86. Reason Code 75: Cardholder Does Not Recognize Transaction.. 88. Fraud Codes .. 89. Reason Code 57: Fraudulent Multiple Transactions .. 89. Reason Code 62: Counterfeit Transaction.

4 90. Reason Code 81: Fraudulent Transaction card -Present Environment.. 91. Reason Code 83: Fraudulent Transaction card Absent Environment .. 94. Authorization Errors.. 97. Reason Code 70: Account Number on Exception File.. 97. Reason Code 71: Declined Authorization.. 99. Reason Code 72: No Authorization.. 101. Reason Code 73: Expired card .. 103. Reason Code 76: Incorrect Transaction Code .. 105. Reason Code 77: Non-Matching Account Number.. 106. Processing Errors.. 108. Reason Code 74: Late Presentment.. 108. Reason Code 80: Incorrect Transaction Amount or Account Number.. 110. Reason Code 82: Duplicate Processing.. 111. Reason Code 86: Paid by Other Means.. 113. Reason Code 96: Transaction Exceeds Limited Amount.. 114. Cancelled or Returned.. 116.

5 Reason Code 41: Cancelled Recurring Transaction.. 116. Reason Code 53: Not as Described or Defective Merchandise .. 118. Reason Code 85: Credit Not Processed.. 120. Non-Receipt of Goods or Services.. 123. Reason Code 30: Services Not Provided or Merchandise Not Received.. 123. Appendix 1: Training Your Troops.. 125. Training Materials for card -Present Merchants .. 126. Training Materials for card -Not-Present Merchants .. 128. Training Materials on Cardholder Information Security Program.. 129. Appendix 2: Glossary.. 131. ii Rules for visa Merchants card acceptance and Chargeback Management Guidelines 2006 visa Inc., all rights reserved, to be used solely for the purpose of providing visa card acceptance services as authorized pursuant to agreement with a visa member financial institution.

6 Chapter X Text Introduction What's Covered Purpose and Audience Contents Rules for visa Merchants card acceptance and Chargeback Management Guidelines . 2006 visa Inc., all rights reserved, to be used solely for the purpose of providing visa card acceptance services as authorized pursuant to agreement with a visa member financial institution. Section One: Introduction Purpose and Audience For today's visa merchant , accepting visa payment cards has become simultaneously easier and more complex. Electronic terminals and card acceptance devices make transaction processing automatic and seemingly effortless, raising potential profitability. However, they also create increased possibilities for processing mistakes and fraudulent transactions that can result in copy requests and chargebacks.

7 In addition, the walls between card -present and card -not-present transactions have become less obvious as growing numbers of traditional brick and mortar . Merchants launch e-commerce web sites, transforming themselves into click and mortar businesses. Such Merchants must, in effect, be bilingual, familiar with both card -present and card -not-present procedures. Rules for visa Merchants card acceptance and Chargeback Management Guidelines is a comprehensive manual for all businesses that accept visa transactions. The purpose of this guide is to provide Merchants and their sales staffs with accurate, up-to-date information on processing visa transactions, while minimizing risk of loss from fraud and chargebacks. The book is targeted at both card -present and card -not-present Merchants and their employees, and includes requirements and best practices for doing business on the Internet.

8 It also contains detailed information on the most common types of chargebacks Merchants receive and what you can do to remedy or prevent them. Rules for visa Merchants card acceptance and Chargeback Management Guidelines 2006 visa Inc., all rights reserved, to be used solely for the purpose of providing visa card acceptance services as authorized pursuant to agreement with a visa member financial institution. Section One: Introduction Contents Rules for visa Merchants card acceptance and Chargeback Management Guidelines is organized to allow users to find the information they need quickly and easily. The table of contents serves as an index of the topics and material covered. Topics covered include: Section 1: Getting Down to Basics: An overview of the how visa transac- tions are processed, from point of transaction to clearing and settlement.

9 A list of key visa policies for Merchants is also included. Section 2: card -Present Transactions: Requirements and best practices for processing card -present transactions at the point of sale, including how to minimize key-entered transactions and ensure legible sales receipts. Suspicious transactions, Code 10 calls, and card recovery procedures are also discussed. Section 3: card -Not-Present Transactions: Requirements and best practices for processing card -not-present transactions, including mail order, telephone order, and Internet sales. visa fraud prevention tools, like the Address Verification Service, and card Verification Value 2 (CVV2);. requirements for e-commerce web sites; and procedures for recurring transactions are also covered. Section 4: visa Cardholder Information Security Program (CISP): The Payment card Industry (PCI) Data Security Standard that visa requires Merchants and their service providers to implement to ensure the security of confidential cardholder account information.

10 Section 5: Copy Requests: Requirements and best practices for respond- ing to a request for a copy of a sales receipt to resolve a cardholder dis- pute. Information on minimizing copy requests, ensuring legible receipts, and meeting sales draft requirements are also covered. Section 6: Chargebacks: Requirements and best practices for processing transactions that are charged back to you by your merchant bank, from the card issuer. This section includes strategies for chargeback prevention, as well as information on how and when to resubmit a charged-back transac- tion to your merchant bank. A brief compliance process overview is also included. Section 7: Chargeback Reason Codes: Detailed information on the reason codes for the most common types of chargebacks that Merchants receive.