Settlement of Discover Card Transactions

The settlement of a Discover transaction is the process by which Discover reimburses a merchant for the amount of each card sale that the merchant has submitted. The settlement total is the sum of the following items submitted by the merchant:

• Purchases made in the form of card sales.
• Minus credits issued to Discover cards.
• Plus or minus adjustments made by Discover to reconcile or correct errors in your transaction data. All debit (chargebacks, adjustments, and discount) activity aside from credits is invoiced at the end of the month and is not deducted from the settlement amount.
• Adjustments or discrepancies between the batch total and the actual sales detail are offset against the same or subsequent business day’s settlement total.

Settlement adjustments. Discover makes adjustments on transactions that have been improperly processed. Adjustments may be initiated by Discover or at the merchant’s request. Reasons for adjustments include:

• Sales or returns processed on the incorrect account number.
• The total of card sales and credits submitted with the merchant’s batch did not match the actual total of transactions processed by Discover.
• Card sales or credit slips were illegible, incorrectly completed or incomplete.
• Items other than card sale transactions or credits were submitted.

Discover uses the following adjustment reason codes:

Merchant statements. Discover provides merchants with monthly activity reports listing the card transactions processed by the merchant during the period covered by the reports, including any sales, the merchant fees and other fees applicable to these sales, any credits, chargebacks and any other transactions. Typically, these reports are included in the processing statements that Visa and MasterCard processors send to their merchants. In fact, most processors now fund their merchants for their Discover transactions, in addition to the Visa and MasterCard ones.

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