Rewards for Recovering Counterfeit MasterCard Cards at the Point of Sale

In a recent post we discussed the procedures merchants need to follow at the checkout of their store when they have enough reasons to suspect that a card is counterfeit or is being used for payment by an unauthorized person. In this post we will discuss the rewards that the merchant is entitled to receive for each successfully recovered MasterCard card.

Firstly, it should be emphasized that it is in merchants’ best interest to do their best to verify the validity of the cards customers use for payment at their stores and that the cards are being used by their authorized users. Failure to do so will almost certainly result in a chargeback and sometimes in angry calls by the cards’ legitimate owners.

Once you have accumulated enough evidence that a card is counterfeit or that your customer is not its authorized user, you must retain the card, but only if possible by peaceful and reasonable means, and return it to the card issuer. You should not be taking any risks and, if your customer is behaving in a threatening manner, you should complete the transaction, return the card, wait until the customer leaves the store and call your processing bank to report the incident. Even if it is too late at this point to prevent a fraudulent transaction from taking place, you will ensure that the card will not be used again in the future, possibly at your store.

Visa and MasterCard have established programs for rewarding merchants for picking up invalid cards. Following is an outline of MasterCard’s reward program.

MasterCard has mandated that the person who has captured the card should receive the reward. A reward payment is not required for capture of a Cirrus-branded or Maestro-branded card. MasterCard’s processing banks must follow these standards when paying a reward:

1. Pay no less than $50 to the merchant capturing a card listed on the Electronic Warning Bulletin file or in the Warning Notice.
2. Pay the merchant $100, if a merchant initiates an authorization call because of a suspicious transaction or captures a card not listed in the Electronic Warning Bulletin file or in the Warning Notice.
3. Pay a reward to a representative of the processing bank for the capture of another bank’s card if it is the processor’s practice to pay its representatives rewards for picking up its own cards. The amount of the reward should be the same amount paid for the capture of the processor’s own cards.
4. Charge the card issuer for reimbursement of the reward paid upon dispatching each card captured by either a merchant or a bank representative.

It is always nice to have an additional incentive to do what we should be doing anyway. After all, who doesn’t like to be rewarded for doing a good job?

Image credit: Wikimedia Commons.