Inside the Black Hole

MasterCard has established specific requirements regulating the type of information that can and cannot be included in transaction information documents (TIDs) that are used to document transactions involving their cards.

TIDs can be one of several types:

• Retail sale.
• Credit.
• Cash disbursement.
• Information.

If the merchant uses a manual imprinter to produce a TID, it is called a formset or slip. If the merchant uses an electronic point-of-sale (POS) terminal, the merchant can substitute a terminal receipt for a formset.

TIDs must not include the following information:

• The PIN or any fill characters representing it.
• The CVC 2, which is the three-digit code located on the back of the card, to the right of the signature panel.

Formsets need to contain the following:

• Retail sale and credit slips need to provide a space for the description of the products or services sold by the merchant to the customer and their cost.
• Adequate spaces for:
  • Customer’s signature.
  • Card imprint.
  • Date of the transaction.
  • Authorization number (except on credit slips).
  • Sales clerk’s initials or department number.
  • Currency conversion field.
  • Merchant’s signature on credit slips.
  • Description of the identification document provided by the cardholder on cash disbursements and retail sale slips for certain unique transactions.
• Identification of the slip as a retail sale, credit, or cash disbursement and of the receiving party of each copy.
• The customer copy of the formset should have the following message printed out: “IMPORTANT-retain this copy for your records,” or words to similar effect.

Terminal receipts need to identify the transaction as a retail sale, credit, or cash disbursement and contain the following information:

• “Doing Business As” (DBA) merchant name, city and state, country, or the point of banking location.
• Transaction date.
• Card account number.
• Transaction amount in the original transaction currency.
• Adequate space for the customer’s signature (required on merchant copy only).
• Authorization approval code (except on credit receipts).
• Merchant’s signature on credit receipts only.

Account number truncation and expiration date omission requirements. The cardholder receipt generated by all electronic POS terminals, including ATM receipts, must reflect only the last four digits of the account number. All preceding digits must be replaced with fill characters, such as “X,” “*,” or “#,” not with blank spaces or numeric characters. It is recommended that the merchant copy is also produced in the same way. Additionally, all cardholder and merchant receipts, generated by electronic POS terminals, must not show the card expiration date.

Learn how to lower your card acceptance cost

Learn how to accept credit and debit cards at the lowest processing costs. The Payment Card Acceptance kit contains a video and an e-book:

• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).
• E-Book – Payment Card Acceptance Guide (19 pages).

Discover’s ticket retrieval process is equivalent to what Visa calls copy requests: requests for information regarding a particular card transaction. These requests are typically initiated by cardholders who contact Discover to dispute or request clarification on a particular charge on their card accounts. Discover then contacts the merchant in writing and requests documentation regarding the transaction.

Once a request is received, the merchant has 20 business days to provide Discover with a copy of the sales receipt or a refund check. Discover can send the request by mail, email or by other electronic means. If the merchant does not respond within 20 business days, Discover may return the transaction to the merchant as a chargeback.

The sales receipt or a copy of it received by Discover is then sent to the cardholder for review or for identification of the card account number. Merchants can also provide a substitute transaction slip for some transactions, which needs to include the following information:

• The card account number.
• The cardholder name.
• The card expiration date.
• The transaction amount.
• The transaction date.
• The authorization code.
• The merchant name and location.
• A description of the merchandise / services.


For Mail Order / Telephone Order (MO / TO):

• The shipping address.


For transaction completed at self service terminals:

• The self service terminal locations code or city and state.


For transactions completed at an automated fuel dispenser:

• The service station identification number.
• The invoice number.

If any of the above items is missing, Discover can file a dispute, which can lead to a chargeback. A dispute can also be filed if the submitted copy of a sales receipt is illegible or incomplete. Such chargebacks are designated with code IC: “Requested Item Illegible Copy” and are equivalent to Visa’s Reason Code 60: “Requested Copy Illegible or Invalid.” Most of these chargebacks can be prevented by implementing the following simple measures:

• Do not reduce the size of the copies. All copies you make of transaction receipts should be the same size as the originals. Reduced size can produce images that are hard to read.
• Place your company’s logo where it will not obstruct the information. Make sure your company’s logo is printed on the sales receipt in a way that does not obstruct the transaction information.
• Change the printer’s ribbon regularly. Replacing the printer’s ribbon regularly will eliminate faded, hard-to-read sales receipts.
• Keep the top copy of the receipt. Keeping the top (white) copy of the sales receipt ensures better quality copies in the future. Give the colored copy to your customer.

For more on managing copy requests, review our previous article on the topic. Although it was written to address specifically Visa and MasterCard requests for information, the same general rules apply to Discover’s ticket retrievals.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Visa uses Reason Code 60 to designate chargebacks resulting when a copy of a sales receipt, requested by the card issuer, is illegible, incomplete or something other than the requested item. MasterCard does not have a reason code that exactly matches Visa’s 60.

What causes these chargebacks? Chargeback Reason Code 60 may be caused by one of the following issues:

• The terminal’s printer ribbon was worn and the ink was too light.
• The printer’s paper roll was nearing its end, and the colored streak indicating this made some of the payment information illegible.
• The copy was on hard-to-read colored paper.
• The carbonless paper of the original sales receipt was mishandled, causing black blotches and making copies illegible.
• The original sales receipt was copied at a reduced size, resulting in illegible copies.
• The document submitted was not a copy of the sales receipt at issue.

How to manage such chargebacks? The time frame to respond to a chargeback Reason Code 60 is 7 days for U.S. transactions and 120 days for international ones. Your response will depend on the particular transaction circumstances and the actions you have taken (or not) so far:

• Legible or complete copy is available. Resubmit the copy, if possible, and make sure it is legible.
• The sales receipt is incomplete. If you don’t have or cannot produce a legible copy, accept the chargeback. Do not issue a credit at this time, as the chargeback has already performed this function.
• The sales receipt is incomplete and the transaction is fraudulent. In such cases, you have no re-presentment rights, as the cardholder cannot be expected to accept a fraudulent charge. You should accept the chargeback.

How to prevent chargeback Reason Codes 60? Most of these chargebacks can be prevented by implementing the following measures:

• Copying sales receipts. Make sure the copies you make of sales receipts are the same size as the originals. Reduced size can produce images that are hard to read.
• Change the ribbon of your point-of-sale (POS) printer. Regularly changing the printer’s ribbon will eliminate faded, hard-to-read sales receipts.
• Change the paper of your POS Printer. Changing the printer’s paper roll when the colored streak first appears increases the legibility of sales receipt.
• Keep the white copy of the sales receipt. Keeping the white copy of the sales receipt ensures better quality copies in the future. Give the colored copy to the customer.
• Handling carbonless and carbon-back paper used for sales receipts. Handle carbonless paper and carbon-back paper carefully. Carbon-back paper appears black when copied. Any pressure on carbonless and carbon-back paper during handling and storage causes black blotches, making copies illegible. Always keep the top copy.
• Placing company’s logo on sales receipts. Make sure your company’s logo is printed on sales receipts in a way that does not interfere with the transaction information.

As you see, preventing this type of chargebacks largely depends on the way you handle sales receipts. A rule of thumb that can be used here is that if you can read the copies of your sales receipts, issuers will also be able to read them and you will never see a Reason Code 60.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Visa uses chargeback Reason Code 80 to designate chargebacks resulting from processing transactions where either the account number or the transaction amount posted with the card issuer does not match the one shown on the sales receipt. MasterCard does not have a reason code that exactly matches Visa’s 80.

What causes these chargebacks? Reason Code 80 chargebacks are typically associated with key-entered transactions and are usually triggered by an incorrect data entry by the merchant.

How to manage such chargebacks? The time frame to respond to a chargeback Reason Code 80 is 120 days for both U.S. and international transactions. Your response to Reason Code 80 chargebacks will depend on the particular transaction circumstances and the actions you have taken (or not) so far.

• The transaction amount and account number is the same on the sales receipt and payment documents. If the transaction information was entered correctly, you will need to provide a copy of the sales receipt to your processing bank to be used in the re-presentment as supporting evidence.
• Either the transaction amount or account number differs. If the transaction data was entered incorrectly, there is no remedy and you should accept the chargeback. In a case of an incorrect account number, process a new transaction but do not issue a credit, as the chargeback has done that already. In a case of an incorrect amount, no action is needed, as the charged-back amount is the difference between the transaction amount and the correct one.

How to prevent chargeback Reason Codes 80? Preventing this type of chargebacks is entirely within your control and you should implement the following best practices:

• Card-present transactions. Reason Code 80 is typically issued for transactions processed in a card-present environment, where the card’s magnetic stripe has not been read, either because the point-of-sale (POS) terminal was not operational or the card was unreadable. Best card acceptance practices require you to take a manual imprint of the card on the front of the sales receipt. Your sales staff needs to be trained on when and how to do that and a manual imprinter needs to be readily available. Staff should also be trained to verify that the keyed and imprinted numbers are the same.
• MO / TO transactions. Reason Code 80 can also be issued for mail order or telephone order (MO / TO) transactions, where information is also key-entered, typically through virtual terminals. To minimize errors when orders are accepted over the telephone, sales staff should read the provided information back to the cardholder to ensure it is accurate.

Adequate training on best card acceptance practices is your best tool for preventing Reason Code 80 chargebacks. These are very simple procedures and there is absolutely no reason why they should not be followed. You can use our “Payment Card Acceptance Guide” as a training manual.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Accepting Discover card payments is broadly similar to accepting Visa, MasterCard or American Express payments, with a few differences. This post will review the process merchants must follow for each card-present Discover sale they accept.

When a Discover card is presented for payment at the checkout, the merchant is required to perform the following actions:

1. Card expiration date. The first thing you should do is check the card’s expiration date. The card is valid through the last day of the month embossed on it. Merchants are not allowed to accept expired cards and are required to call Discover’s authorization center at 1-800-347-1111.
2. Card signature. Verify that there is a signature on the back of the card and that it matches the name embossed on the front of the card. If the card is not signed, request two pieces of identification, one of which is a picture identification. When you have confirmed that your customer is the cardholder, have him or her sign the back of the card.
3. Obtain authorization. If you are using a point-of-sale (POS) terminal, you are required to transmit the full magnetic stripe data, obtained when the card is swiped through the terminal, with the authorization request. If the magnetic stripe is unreadable and you have to key the transaction information in, you must take a manual imprint, to validate that the card is present. If you fail to take a manual imprint for any key-entered transaction, you will be liable for any resulting chargebacks.

   
   If your POS terminal is unable to connect to Discover’s electronic authorization system, you should call Discover’s authorization center for a voice authorization. Be advised that the floor limit for all Discover transactions is zero, which means that they all must be authorized. Transactions processed without first obtaining an authorization approval may be immediately charged back to you.

   
   For transactions where the merchandise is shipped or the service provided more than thirty days after the order is made, you need to obtain an authorization at the time the order is placed and again immediately before shipping the product or providing the services to the cardholder.

4. Sales receipt. All products and / or services purchased at one time and at one POS terminal must be included on one sales receipt. Split sales, where a merchant uses two or more sales receipts for a single transaction, are not allowed, except for partial payments. The customer must receive a copy of the sales receipt at the time the transaction is completed.
5. Required transaction information. For swipe transactions that are processed electronically using a POS terminal, required information is automatically transmitted to Discover and you are generally not required to obtain a card imprint on the sales receipt. However, if your terminal is not able to read the card’s magnetic stripe, you must obtain a card imprint and include all of the following information on the cardholder’s copy of the sales receipt:
   • The card account number.
   • The cardholder’s name.
   • The card expiration date.
   • The merchant’s name.
   • A description of the purchased merchandise or service.
   • The total amount of the card transaction (including sales tax and / or tip).
   • The transaction date.

   
   For electronically processed transactions, you should compare the account number printed on the transaction receipt to the one on the front of the card. If the two numbers do not match, you should not accept the card.

6. Refunds and returns. If a cardholder returns products or services purchased with a Discover card and in accordance with your return policy, you are required to issue a refund. Your return policy should be clearly displayed and communicated to the cardholder at the time of the sale.

As you see, there is nothing in Discover’s card acceptance requirements that is all that different from Visa’s or MasterCard’s. In general, if you follow the requirements of any of the major credit card companies or associations and apply them to all of your card transactions, you will be in compliance with all of them.

Learn how to lower your card acceptance cost

Learn how to accept credit and debit cards at the lowest processing costs. The Payment Card Acceptance kit contains a video and an e-book:

• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).
• E-Book – Payment Card Acceptance Guide (19 pages).