BANK CARD MERCHANT RULES AND REGULATIONS
January 2004
Since you (hereinafter "Merchant") have either entered into a Bank Card Merchant
Agreement and/or related agreements (collectively referred to herein as "Bank Card
Merchant Agreement") with Fifth Third Bank (collectively referred to herein as "FTB") or
receive Visa and/or MasterCard acquiring and/or related services from FTB, Merchant
agrees to comply with and be bound by these Bank Card Merchant Rules and Regulations
("Bank Rules"). These Bank Rules may be altered or amended from time to time at FTB’s
sole discretion and without notice. Merchant also agrees to comply with and be bound by
the Visa U.S.A Inc. By-Laws and Operating Regulations, the Visa International Operating
Regulations and any other rules, policies or requirements of Visa or any of its subsidiaries
or affiliates (collectively "Visa Rules") and the MasterCard International Inc. By-Laws and
Operating Regulations and any other rules, policies or requirements of MasterCard or any
of its subsidiaries or affiliates (collectively "MasterCard Rules"), any of which may be
altered or amended from time to time and without notice, which are referenced herein and
hereby incorporated into these Bank Rules as if fully rewritten herein. Except for those
terms specifically defined herein, all capitalized terms used herein shall have the same
meanings as ascribed to them in the Bank Card Merchant Agreement. Merchant may now,
or in the future, participate in one or more other card programs which are supported by
FTB in accordance with its standards ("Other Programs"), including but not limited to
Voyager and Wright Express, and may receive services related to these Other Programs
from FTB. In the event that Merchant participates in any such Other Programs, Merchant
agrees to comply with and be bound by the Other Programs Bank Rules published by FTB
from time to time, as well as any operating rules or regulations or any other rules, policies
or requirements of the applicable Other Program(s) (“Other Program Rules”). Before
Merchant participates in any Other Program, Merchant agrees that it shall request from
FTB in writing a copy of the Other Programs Bank Rules. The Bank Card Merchant
Agreement, Visa Rules, MasterCard Rules, Other Program Rules, Other Program Bank
Rules and these Bank Rules are intended to be and shall be construed as consistent parts of
a whole as applied to the applicable product type. In the event of a direct conflict between
the Bank Card Merchant Agreement or the Bank Rules and the Visa Rules or the
MasterCard Rules, the Visa Rules and MasterCard Rules shall control; provided, however,
Merchant acknowledges and agrees that all agreements with respect to the obligations and
liability of FTB are specified in the Bank Card Merchant Agreement and the Bank Card
Merchant Agreement shall control on such subjects notwithstanding anything in the Bank
Rules, Visa Rules, MasterCard Rules, Other Programs Bank Rules, and/or the Other
Program Rules.
A.
indicate card acceptance. The Visa and MasterCard wordmark should be used to
indicate acceptance of cards when a visual representation of the marks is not
possible at the merchant web site.
4.
C.
The Merchant may not refer to Visa and MasterCard in stating eligibility for its
products, services or membership.
Authorization
1.
The Merchant shall obtain authorization for each sales transaction for the total
amount of such transaction. For sales transactions not processed through an
electronic terminal, the Merchant shall type or print legibly on the sales draft the
authorization approval code evidencing the authorization so obtained.
2.
A Merchant must only deposit transaction receipts that directly result from
Cardholder transactions with that Merchant. A Merchant must not deposit a
transaction receipt that it knows or should have known to be either fraudulent or
not authorized by the Cardholder
3.
A Merchant is responsible for its employees’ actions while in its employ.
4.
The Merchant's designated authorization center, or at FTB's option the
authorization center designated by FTB (hereafter referred to as "Designated
Authorization Center"), provides such Merchant approval or denial for sales
transactions for specific dollar amounts. The Designated Authorization Center
may also provide the Merchant with assistance in the following circumstances.
a.
When a sales transaction involves use of a Card and the total amount of the
transaction is in excess of the then current and applicable floor limit, if any,
in the Bank Card Merchant Agreement or if a zero floor limit is applicable
to such transaction or if there is no mention of a floor limit in the Bank Card
Merchant Agreement.
b.
When a sales transaction is completed in partial payment of a single
purchase, authorization is required for the amount segment(s) of the
purchase effected with the Card, regardless of the Merchant's floor limit.
c.
When a sales transaction is a mail order or telephone order transaction.
d.
Honoring of Cards
1.
The Merchant shall promptly and without discrimination honor all valid Cards
within the appropriate categories of acceptance when properly presented as
payment from Cardholders for the purchase of goods and/or services. The
Merchant shall maintain a policy that shall not discriminate among customers
seeking to make purchases through use of a valid Card. An unreadable magnetic
stripe, in and of itself, does not deem a Card invalid.
2.
The Merchant shall not establish minimum or maximum sales transaction
amounts as a condition for honoring a Card.
When a sales transaction, other than mail order or telephone order, involves
(i) a handwritten sales draft which does not contain the imprint of the
Merchant plate or the Card, (ii) a Cardholder who is present but without the
Card, (iii) a sales draft which is not signed by a Cardholder, (iv) an
unsigned Card, (v) suspicious or unusual circumstances or (vi) an expired
Card. When requesting authorization in such circumstances, the Merchant
must advise the Designated Authorization Center of the specific reason(s)
authorization is requested.
3.
The Merchant shall not impose any surcharge on sales transactions.
(1)
4.
Any purchase price advertised or otherwise disclosed by the Merchant must be the
price available when payment is made with a Card.
5.
Any tax required to be collected by the Merchant must be included in the total
transaction amount and not collected separately in cash.
6.
The Merchant shall validate all cards by ensuring the signature on the back of the
Card matches the signature on the transaction receipt.
7.
The Merchant shall not accept any Card having two signatures on the signature
panel located on the back of the Card.
8.
The Merchant shall not impose a requirement on Cardholders to provide any
personal information, such as a (i) home or business telephone number, (ii) home
or business address, (iii) driver's license number, (iv) photocopy of a driver's
license or (v) photocopy of the Card, as a condition for honoring a Card unless
such information is required (a) for mail order, telephone order, or electronic
commerce transactions; (b) the transaction amount exceeds a pre-determined
dollar limit set by FTB; or (c) the information is required by the Card issuer.
Except for the specific circumstances cited above, the Merchant shall not refuse to
complete a sales transaction solely because a Cardholder who has complied with
all of the conditions for presentment of a Card at the point-of-sale refuses to
provide such additional personal information.
9.
A Merchant must not refuse to complete an electronic commerce transaction
solely because the Cardholder does not have a digital certificate or other secured
protocol.
10.
The Merchant shall not require a Cardholder, as a condition for honoring a Card,
to sign a statement that in any way states or implies that the Cardholder waives
any rights to dispute the transaction with the Card issuer or otherwise.
B.
5.
The Merchant shall adequately display, in accordance with the Visa and
MasterCard Rules, the Visa and MasterCard service marks, as applicable, at
points of interaction and on promotional materials to indicate which Cards will be
honored at the Merchant's place of business. At a minimum, the Visa and
MasterCard service marks should be on display near the entrance of the
Merchant's place of business and must not be less prominent than other service
marks that the Merchant has on display (e.g., American Express, Discover).
2.
The Merchant may use the Visa and MasterCard wordmark on promotional,
printed, or broadcast materials only to indicate that Cards are accepted for
payment and shall not indicate, either directly or indirectly, that Visa and
MasterCard endorse any goods and/or services.
3.
A merchant web site must display the Visa and MasterCard Marks in full color to
(a)
Review positive identification to determine that the user of the
Card is the Cardholder. Such identification must consist of a
current, official government identification document (e.g.,
passport, driver's license) that bears the Cardholder's signature.
Such identification, including any serial number, social security
number, or driver's license number and expiration date, must be
indicated on the sales draft
(b)
Require the Cardholder to sign the signature panel of the Card
prior to completing the transaction.
(2)
In the event FTB for whatever reason is unable to obtain, or due to system delays
chooses not to wait to obtain, authorization from the Cardholder’s financial
institution, Visa or MasterCard, FTB may at its option “stand-in” for such entities
and authorize the sales draft or sales transaction based on criteria established by
FTB, and Merchant remains responsible for such sales draft or sales transaction in
accordance with the Bank Card Merchant Agreement.
7.
If a sales transaction is not authorized, the Merchant must not complete the sale.
A declined sales transaction is originated from the bank that issued the Card. The
fact that a sales transaction was declined should not be interpreted as a reflection
of the Cardholder's credit worthiness. If the Cardholder has any questions
concerning the authorization, instruct such Cardholder to call the bank that issued
the Card.
D.
-1-
If a sales transaction involves suspicious or unusual circumstances,
then the Merchant shall call the Designated Authorization Center and
request a "Code 10" authorization.
An authorization code only indicates the availability of a Cardholder's credit as
of the time the authorization is obtained. An authorization is no guarantee that
the person presenting the Card is the rightful Cardholder or that the transaction
will not be charged back to the Merchant.
6.
Use of Service Marks
1.
If the signature panel on the Card is blank, in addition to requesting
authorization, the Merchant must do all of the following.
Verification and Recovery of Cards
1.
If a transaction is not authorized, the Merchant must not complete the sale, and, if
instructed by the Designated Authorization Center to pick-up the Card, the
Merchant should do so by reasonable and peaceful means, notify the Designated
Authorization Center when the Card has been recovered, and ask for further
instructions.
2.
The Merchant shall use reasonable and peaceful means to recover any Card if (i)
the account number thereon is listed on any Combined Warning Bulletin, (ii) the
printed four digits above the embossed account number do not match the first four
digits of the account number, (iii) the Merchant is advised to retain it or (iv) the
Merchant has reasonable grounds to believe such Card is counterfeit, fraudulent
or stolen. The Merchant shall also note the physical description of the
BANK CARD MERCHANT RULES AND REGULATIONS
January 2004
Cardholder.
3.
E.
only in the Merchant's place(s) of business.
It is not necessary for an automated dispensing machine, self-service terminal or
limited-amount terminal to retain Cards. However, if such machine does have
this ability, it may retain Cards only upon a Card issuer's specific request.
(4)
Electronic Processing Merchants
1.
Any Merchant processing sales transactions through the use of an electronic
terminal must comply with the following additional requirements in order to
properly process sales transactions and in order to attempt to qualify for a reduced
rate.
a.
b.
b.
The Card must be swiped through the terminal (except for mail order or
telephone order transactions). If the Card account number is not
electronically read from the Card's magnetic stripe, the Merchant must
obtain an imprint of the Card. The draft with the imprint of the Card must
be signed by the Cardholder and shall include the date, time, authorization
code, location, and dollar amount on the same side as the imprint of the
Card.
G.
If an electronic authorization results in a "referral", "call bank", or similar
response, the Merchant must call its Designated Authorization Center for an
authorization. If an approval response is received, the Merchant must
obtain an imprint of the Card. The sales draft containing the imprint must
be signed by the Cardholder.
c.
Notwithstanding any provision in section C above, every sales transaction
must be authorized.
d.
When entering an off-line transaction, the correct Card account number and
expiration date must be key-entered into the terminal.
e.
Deposits must be transmitted within two days from the actual date the
Merchant completes all of its obligations to the Cardholder. These
obligations include, but are not limited to, delivering all goods and/or
performing all services as required on the sales draft.
f.
The Merchant must compare the account number embossed on the Card to
the account number encoded on the Card's magnetic stripe and, if the
account numbers are not the same, will call the Designated Authorization
Center and request a "Code 10" authorization.
g.
The Merchant may use the MasterCard or Visa Address Verification
Service to verify a Cardholder’s billing address prior to completing a sales
draft or sales transaction. In this case, all required information must be
forwarded as part of the authorization request.
1.
The Merchant shall not receive any payments from a Cardholder with respect to
charges for merchandise and/or services which are included on a sales draft
resulting from the use of a Card.
2.
The Merchant shall not disburse cash to a Cardholder and then process such
activity as a Card sales transaction.
3.
The Merchant shall not process a money order or wire transfer transaction for a
Cardholder and then process such activity as a Card sales transaction.
Owners, partners, principals, and/or officers of the Merchant are prohibited from
depositing sales drafts involving the use of their own personal Card(s), other than
for valid purchases of goods and/or services of the Merchant.
4.
H.
Refinancing of Existing Obligations
1.
F.
The Merchant is not permitted to process any transactions that represent the
refinancing or transfer of an existing Cardholder obligation that has been (i)
deemed to be uncollectible or (ii) arise from the dishonor of a Cardholder’s
personal check or (iii) arise from the acceptance of cards at terminals that
dispense scrip.
Cash Deposit
1.
Notwithstanding the information outlined above, the Merchant shall be
responsible for all applicable fees in connection with each sales transaction
processed by FTB. Properly adhering to the information outlined above is no
guarantee that sales transactions will qualify for the lowest possible rate.
Notwithstanding the information above, the Merchant shall be responsible
for all returns and chargebacks allowable pursuant to or by the Visa and
MasterCard Rules, applicable law, Visa, MasterCard, or any other
applicable corporation. Properly adhering to the information outlined above
is no guarantee that the Cardholder's rights with respect to returned
transactions and chargebacks have been limited or waived.
Cash Payment and Cash Disbursement
I.
2.
The Merchant may, if permitted by applicable law, stipulate special
circumstances agreed to by the Cardholder (e.g. late delivery, delivery
charges or insurance charges) as terms of the sales transaction, but
under no circumstances shall a surcharge be assessed for the use of a
Card. Any special terms of the transaction must appear on the sales
draft.
J.
The Merchant shall not receive cash, a check, or other value from a Cardholder
for the purpose of preparing and/or depositing a credit draft that could result in a
deposit to the Cardholder's account.
Multiple Sales Drafts and Partial Consideration
1.
The Merchant shall include all items of goods and/or services purchased in a
single transaction in the total amount on a single sales draft, except in the
following situations.
Returned Merchandise and Adjustments
1.
A Merchant shall not process a credit transaction without having (i) completed a
previous purchase transaction with the same Cardholder and the same Card and
(ii) paid related fees associated with such transaction to FTB. The refund or
adjustment indicated on the credit draft shall not exceed the original transaction
amount.
2.
The Merchant shall not submit a sales draft and an offsetting credit draft at a later
date solely for the purpose of debiting and crediting a Cardholder's account.
3.
If, with respect to any transaction, any merchandise is accepted for return, or any
services are terminated or cancelled, or any price adjustment is allowed by the
Merchant, then the Merchant shall not make any cash refund to the Cardholder,
but instead shall deliver promptly to FTB (if FTB received the original sales
transaction from the Merchant) a credit draft evidencing such refund or
adjustment.
4.
Authorization is not required when a refund is given to a Cardholder.
5.
The Merchant may limit its acceptance of returned merchandise or establish a
policy to make price adjustments for any transaction, provided that proper
disclosure is made by the Merchant to the Cardholder and purchased goods and/or
services are delivered to the Cardholder at the time the transaction takes place.
a.
Proper disclosure by the Merchant shall be determined to have been given
at the time of the transaction if (i) the Merchant informs the Cardholder
orally of its return policy and (ii) the Merchant's return policy is
conspicuously stated directly on the sales draft that is signed by the
Cardholder. The return policy on the sales draft should have the following
words or similar wording legibly printed on all copies of the sales draft
formset, in capital letters at least ¼ inch high and in close proximity to the
space provided for the Cardholder's signature or invoice being presented to
the Cardholder for signature:
(1)
"NO REFUND, ALL SALES FINAL" -- For a Merchant which
may not accept merchandise in return or exchange and may not issue
a refund to a Cardholder
(2)
“EXCHANGE ONLY" -- For a Merchant which may only accept
merchandise in immediate exchange for similar merchandise of a
price equal to the amount of the original transaction
(3)
"IN-STORE CREDIT ONLY" -- For a Merchant which may accept
merchandise in return and deliver to the Cardholder an in-store credit
equal to the value of the merchandise returned which may be used
2.
K.
For purchases in separate departments of a multiple-department store.
b.
For partial payment transactions when the balance of the amount due is paid
by the Cardholder at the time of the transaction in cash, by check, with
another card or Card, or any combination thereof.
c.
For installment payment transactions when the Cardholder elects to use
such option offered by a mail order or telephone order Merchant. (Refer to
sections P.7.a-P.7.f for additional requirements to accepting installment
payment transactions.)
d.
For delayed delivery transactions when the Cardholder executes two
separate sales drafts. In such a case, a deposit is made by completion of one
sales draft and payment of the balance is tendered by completion of a
second sales draft, the latter sales draft being conditioned upon delivery of
merchandise or performance of services. Authorization is required if the
total amount of both sales drafts exceeds the applicable floor limit and, if
obtained, shall be assigned separate authorization numbers for each sales
draft. The Merchant shall note on the sales drafts the words "Delayed
Delivery", "Deposit" or "Balance" as appropriate, and the respective
authorization date and approval code, when applicable. The sales draft
labeled "Balance" shall not be presented to FTB until the goods are
delivered and/or the services performed.
e.
For advanced payment transactions when the Cardholder elects to use such
option offered by a lodging or cruise line Merchant.
f.
For delayed or amended charges relating to a travel and entertainment
transaction where the Cardholder consented in writing to be liable for such
charges. Such charges may consist of ancillary or corrected charges which
may include room charges, food or beverage charges, taxes, fuel, insurance
and rental fees, parking tickets, and moving violations as applicable, but
may not consist of any charges for loss, theft or damage.
The Merchant shall not use two or more sales drafts originated by the use of a
single Card to avoid authorization calls to the Designated Authorization Center.
Delivery of Sales Drafts and Credit Drafts
1.
-2-
a.
The Merchant shall deliver to the Cardholder a true and completed copy of the
sales draft evidencing a transaction involving use of a Card. Such copy shall be
delivered at the time of the delivery of the goods and/or performance of the
services covered thereby, or, for transactions initiated at point-of-transaction
terminals, at the time of the transaction. The Merchant shall deliver to the
BANK CARD MERCHANT RULES AND REGULATIONS
2.
3.
L.
January 2004
Cardholder a true and complete copy of each applicable credit draft at the time of
the transaction giving rise thereto.
7.
The Merchant or any agent of the Merchant shall not retain or store Card
Verification Value 2 (CVV2) data subsequent to the authorization of a sales
transaction.
The Cardholder shall not be required to sign a sales draft until the final transaction
amount is known and indicated in the "total" column.
8.
The Merchant shall comply with provisions of the Visa Cardholder Information
Security Program, which includes, but is not limited to the following
requirements:
For draft retrieval requests, a copy of the specified draft must be received by FTB
from the merchant within ten (10) calendar days of the FTB report date. For
chargeback prenotifications, the requested documentation must be received by
FTB from the merchant within fifteen (15) calendar days of the FTB report date.
For chargeback reversal requests, supplemental documentation must be received
by FTB from the merchant within ten (10) calendar days of the FTB report date.
Failure to respond to a retrieval request, chargeback prenotification, and/or
chargeback reversal request may result in the Merchant being liable for
chargebacks.












Date and Identification
1.
The Merchant must date each sales draft and/or transaction record resulting from
the use of a Card with the transaction date and should include thereon a brief
description of the merchandise and/or services sold and the price thereof
(including any applicable taxes) in detail sufficient to identify the transaction.
The Merchant must also date each credit draft resulting from the use of a Card
with the transaction date and should include thereon a brief description of the
merchandise returned, services cancelled or adjustment made and the amount of
the credit in sufficient detail to identify the transaction.
2.
In each case in which a Cardholder presents a Card, the Merchant will complete
the transaction only if (i) the signature on the draft appears to be the same as the
signature on the Card and, if applicable, (ii) the Cardholder resembles the person
depicted in any picture which appears on the Card. If such identification is
uncertain or if the Merchant otherwise questions the validity of the Card, the
Merchant shall contact the Designated Authorization Center for further
instructions.
3.
In each case in which a Cardholder presents a Card that bears an embossed "valid
from" date and the transaction date is prior to the "valid from" date, the Merchant
shall not complete the transaction. When a Card is embossed with a "valid from"
date in a month/year format, the Card is considered to be valid on the first day of
the embossed month and year. When a Card is embossed with a "valid from" date
in a month/day/year format, the Card is considered to be valid on the embossed
date.
4.
N.
Legends
1.
The Merchant shall use a suitable imprinter to imprint legibly on each sales draft
and credit draft the embossed legends from the Card and the Merchant plate. If
either or both of such legends are not so imprinted, the information appearing
thereon shall be reproduced legibly on the draft in sufficient detail to identify the
Merchant, the Cardholder, and the Card issuer. Such detail shall include the
Merchant's name and address, the Cardholder's name and any company name, the
Cardholder's account number, the expiration date of the Card, and the name or
trade name of the Card issuer as it appears on the face of the Card. Merchants
completing transactions with magnetic-stripe-reading terminals which produce
transaction records must ensure that the Cardholder account number encoded on
the magnetic stripe and the Merchant's name and address are included on the
transaction record.
2.
The Merchant shall immediately notify FTB in writing in the event that the
information on the Merchant plate has changed.
O.
Transactions completed by a Merchant without the imprint of the Card on a sales
draft are "Identity Responsibility Sales". Such sales may be made by the
Merchant at its option. In making such sales, the Merchant will be deemed to
warrant and represent that the purchaser is the person whose name appears on the
sales draft and that the name and account number appearing on the sales draft are
the same as those embossed on such Card. The fact that the Merchant has
obtained authorization for the transaction does not alter this warranty of identity
or the need for independent identification and should Merchant complete such
transaction, Merchant shall be solely responsible for any and all liabilities arising
from such transaction.
Install and maintain a working firewall to protect data
Keep security patches up-to-date
Protect stored data
Encrypt data sent across public networks
Use and regularly update anti-virus software
Restrict access by "need to know"
Assign unique ID to each person with computer access
Don't use vendor-supplied defaults for passwords and security parameters
Track all access to data by unique ID
Regularly test security systems and processes
Implement and maintain an information security policy
Restrict physical access to data
Delivery of Non-Electronic Sales Drafts and Credit Drafts
1.
The Merchant shall deliver all non-electronic (e.g. paper) sales drafts and credit
drafts to FTB or its designated agent within three calendar days after the
applicable transaction date, with the following exceptions.
a.
In cases in which the Merchant requests and receives authorization for a
delayed delivery transaction, delivery of the draft shall then be made within
five calendar days after the date of the "deposit" transaction and within five
calendar days after the date of the "balance" transaction.
b.
M.
Disclosure and Storage of Cardholder Information
1.
2.
3.
4.
2.
The Merchant shall not disclose a Cardholder's account information nor any other
personal information to third parties other than to the Merchant's agent(s) for the
sole purpose of assisting such Merchant in completing the transaction or as
specifically required by law. Suspicious requests for account information should
be reported immediately to Merchant’s designated account manager at Bank or to
Bank’s client services department.
The Merchant may request from FTB to receive BIN information. The Merchant
must not use the BIN information for any reason other than to identify debit
category products versus credit category products at the point of sale. The
Merchant must not disclose the BIN information to any third party without prior
written consent of FTB.
In the event of bankruptcy, insolvency, or other suspension of business
operations, the Merchant must not sell, transfer, or disclose any materials that
contain Cardholder account numbers, personal information or other transaction
information to third parties. The Merchant must either: a) return the information
to FTB or b) provide acceptable proof of destruction of this information to FTB.
The Merchant agrees to retain in its files legible copies of each sales draft and
credit draft for a period of at least 90 days, and further agrees to deliver the paper
copy of any such sales draft or credit draft in its files to FTB, or to such person as
FTB may designate, within such period after request therefore as is required by
law or by the Visa and MasterCard Rules. If the Merchant destroys or discards
the paper copy of such sales draft or credit draft in its files after such 90-day
period, the Merchant will retain a microfilm or other photographic image of the
sales draft and credit draft thereof for such period as may be necessary to enable
the Merchant and FTB to comply with all applicable laws and the Visa and
MasterCard Rules, which period is approximately eighteen (18) months, and will
deliver a copy of such image of any sales draft or credit draft upon request by
FTB as evidence of the sale. The Merchant will be responsible for all liabilities
arising from any failure to provide an acceptable copy of any sales draft or credit
draft as required by law or the Visa and MasterCard Rules.
5.
The Merchant or any agent of the Merchant shall store in an area limited to
selected personnel and, prior to discarding, shall destroy in a manner rendering
data unreadable, all material containing Cardholder account numbers or imprints,
such as sales drafts, credit drafts, card rental agreements, and carbons.
6.
The Merchant or any agent of the Merchant shall not retain or store magneticstripe data subsequent to the authorization of a sales transaction.
3.
A Merchant may not present to FTB or its designated agent, either directly or
indirectly, any sales draft or credit draft which was not originated as a result of an
act between the Cardholder and the Merchant.
4.
A Merchant may not present to FTB or its designated agent, either directly or
indirectly, any sales draft or credit draft that it knows or should have known to be
fraudulent and/or not authorized by the Cardholder. With respect to this
requirement, the Merchant shall be responsible for the actions of its employees,
representatives, agents and any other person which Merchant allows to have
access to electronic terminals or sales drafts for purposes of generating or creating
a sales transaction.
5.
A Merchant may not present to FTB or its designated agent, either directly or
indirectly, any sales draft representing a transaction which had been previously
charged-back to the Merchant. This prohibition is applicable to transactions
processed with or without the Cardholder's permission. The Merchant may, at its
option, pursue payment from the Cardholder outside the Visa or MasterCard
system.
P.
-3-
In cases in which the Merchant has multiple locations or offices and
delivers its drafts to FTB through a central office or facility, delivery of the
draft shall be made within 20 calendar days of the transaction date.
A sales draft or credit draft may not be delivered to FTB or its designated agent
until the Merchant has completed all of its obligations to the Cardholder. These
obligations include, but are not limited to, delivering all goods and/or performing
all services as required on the draft.
Mail Order, Telephone Order, Delayed Delivery, Electronic Commerce and
Recurring Transactions
1.
The Merchant may not engage in mail order, telephone order, delayed delivery,
electronic commerce and/or recurring transactions unless previously indicated on
the merchant application and subsequently approved by FTB in writing. The
Merchant assumes all risk associated with accepting mail order, telephone order,
delayed delivery, electronic commerce and recurring transactions, including, but
not limited to, fraudulent sales transactions.
2.
For the transactions specified below, the Merchant shall type or print legibly on
the "signature line" of the sales draft.
a.
"TO" for telephone order transactions
b.
"MO" for mail order transactions
c.
"Recurring Transaction" for recurring transactions
BANK CARD MERCHANT RULES AND REGULATIONS
3.
4.
5.
6.
d.
"No Show" for motels/hotels which are actively participating in the
Guaranteed Reservation Program (contact your account executive for
additional information)
e.
“E-Commerce” for electronic commerce transactions.
January 2004
purchase of goods and/or services which are delivered or performed periodically,
the Cardholder must complete and deliver to the Merchant an order form
containing a written request for such goods and/or services to be charged to the
Cardholder's account. The order form must at least specify (i) the transaction
amount charged to the Cardholder's account, (ii) the frequency of the recurring
charges and (iii) the duration of time for which such Cardholder permission is
granted. In the event that a recurring transaction is renewed, the Cardholder must
complete and deliver to the Merchant a subsequent order form for continuation of
such goods and/or services to be charged to the Cardholder's account. A recurring
transaction may include the payment of recurring charges such as insurance
premiums, subscriptions, membership fees, tuition, or utility charges.
On the sales draft, the Merchant must clearly print the (i) Cardholder's account
number, (ii) Card's effective and expiration dates, (iii) date of the transaction, (iv)
description of the goods and/or services, (v) amount of the transaction (including
shipping, handling, insurance, etc. charges), (vi) Cardholder's name, (vii)
Cardholder's billing address, (viii) ship to address, (ix) authorization code and (x)
Merchant's name and address.
a.
The Merchant shall obtain the expiration date of the Card for mail order and
telephone order transactions and shall forward the expiration date as part of the
authorization inquiry.
(1)
The order form must allow space for the Cardholder to specify a
minimum and maximum transaction amount to be charged
periodically to the Cardholder's account.
Under no circumstances may a Merchant require that a Cardholder complete a
postcard or similar device which includes the (i) Cardholder's account number, (ii)
Card expiration date, (iii) signature or (iv) any other Card account data in plain
view when mailed or transmitted over a public network.
(2)
The Merchant must inform the Cardholder of the Cardholder's right to
receive, at least 10 days prior to each scheduled transaction date,
written notification of the amount and date of the next charge.
A mail order and/or telephone order Merchant may offer Cardholders an
installment payment option for its mail order and/or telephone order merchandise
under the following conditions.
b.
A copy of the order form must be (i) retained by the Merchant for the
duration of the recurring charges and (ii) provided in response to an issuer's
request for the original sales draft.
a.
The Merchant's material clearly discloses the installment terms including,
but not limited to (i) the availability of the plan for selected items or the
total amount of the order and (ii) the handling of the shipping and handling
charges and any applicable taxes.
c.
Notwithstanding anything to the contrary in any agreement between the
Merchant and a Cardholder, the Merchant shall not complete an initial or
subsequent recurring transaction after receiving a cancellation notice from
the Cardholder, FTB, or a response that the Card is not to be honored.
b.
No finance charges are added by the Merchant.
c.
The sum of the installment transactions does not exceed the total sale price
of the merchandise on a single transaction basis.
Q.
d.
Authorization is obtained for each installment transaction above the
Merchant's applicable floor limit.
e.
The Merchant does not deposit the first installment transaction with FTB
until the merchandise is shipped.
f.
7.
Additional Services/ Locations
1.
The Merchant is required to notify and receive written acceptance from FTB prior
to accepting Card transactions if the Merchant is involved in (i) sales at customeractivated terminals, (ii) sales at self-service terminals, (iii) telemarketing sales,
(iv) supermarket sales, (v) sales which involve the transfer of cash or (vi)
advanced payment sales.
2.
If the Merchant intends to change the nature and type of products and/or services
it provides as identified on the Merchant's processing application which was
subsequently received by FTB, the Merchant is required to obtain and receive
written acceptance of such change from FTB prior to accepting Cards and
depositing sales drafts for such transactions.
3.
If the Merchant intends to create a new legal business entity, separate from the
business entity that previously contracted for Visa/MasterCard acquiring services
from FTB, and process Card transactions at such business entity with FTB, then
the Merchant is required to apply for processing for the new business entity, even
if such entity is owned, in whole or in part, by the principle owners of the
Merchant.
4.
If the Merchant wishes to process Card transactions at a new or additional
location of its current existing business, which business has previously contracted
for Visa/MasterCard acquiring services from FTB, such Merchant should call
their account executive.
In addition to the Merchant name, an appropriate installment transaction
descriptor (e.g., 1 of 5, 2 of 5) is included in the merchant name field of the
sales receipt.
In a delay delivery transaction whereby a Cardholder makes a deposit toward the
full amount of the sale, the Merchant must execute two separate Cardholder sales
receipts, the first for a deposit and the second for payment of the balance upon
delivery of the merchandise or the performance of the services.
a.
The following authorization requirements apply to MasterCard delayed
delivery transactions.
(1)
One authorization must be obtained for the full amount of the sale.
(2)
The Merchant must note on both Cardholder sales receipts the
authorization date and approval code.
(3)
The Merchant must note on each Cardholder sales receipt the words
"delayed delivery", "deposit" or "balance", as appropriate.
R.
b.
9.
Reserve of Funds
1.
FTB reserves the right, in its sole discretion, to require the Merchant to prepay
funds satisfactory to FTB as a reserve ("Reserve") to cover Merchant's anticipated
or past-due obligations to FTB, including but not limited to, anticipated or pastdue discount fees and chargebacks, for reasons that include but are not limited to,
the Merchant files bankruptcy, FTB reasonably believes that there has been a
material deterioration in the Merchant's financial condition, Merchant is past-due
in amounts owed to FTB, or upon notice of termination of the Bank Card
Merchant Agreement.
2.
Not limiting the generality of the foregoing, upon notice of termination and/or
upon demand by FTB at any time, Merchant shall immediately: (i) prepay, or at
FTB’s option it shall have the right to fund from Merchant's Card sales and/or
accounts, the Reserve in an amount equal to the chargebacks during a nine (9)
month period prior to the notice of termination plus ten percent (10%), anticipated
discount fees and/or such other amounts as FTB deems necessary, in its sole
discretion, to cover Merchant's current or past-due obligations to FTB; (ii) pay to
FTB, at FTB’s then current fees, the fees for handling draft retrieval and
chargeback transactions originating from the Merchant's Card sales; and/or (iii)
pay, or at FTB’s option it shall have the right to fund from Merchant's Card sales,
daily for any and all fees or charges payable to FTB.
3.
All funds remaining in the Reserve will be returned to the Merchant during the
tenth (10th) month after the Merchant's actual termination of processing with
FTB.
The following authorization requirements apply to Visa delayed delivery
transactions.
(1)
The Merchant must obtain separate authorizations for the amount of
the deposit transaction and the amount of the balance transaction.
(2)
The Merchant must identify the applicable authorization number,
authorization date, and approval code on each Cardholder sales
receipt.
(3)
8.
If the recurring transactions are to be for varying amounts, the following
additional conditions apply.
The Merchant must note on each Cardholder sales receipt the words
"delayed delivery", "deposit" or "balance", as appropriate.
If the Merchant accepts electronic commerce transactions, the Merchant must
disclose all of the following information on the Merchant’s web site.
a.
Complete description of the goods and/or services
b.
Returned merchandise and refund policy
c.
Customer service contact, including electronic mail address and/or
telephone number
d.
Transaction currency
e.
Export or legal restrictions
f.
Delivery policy.
g.
Disclosure of the Merchant Outlet country on the same screen as the checkout screen or during the check-out process.
h.
Consumer data privacy policy.
i.
Security method for the transmission of payment data
S.
If the Merchant agrees to accept a recurring transaction from a Cardholder for the
-4-
Association Compliance
1.
FTB, in association with Visa and MasterCard, closely monitors the Merchant's
processing activity in an effort to combat credit card fraud and reduce Cardholder
disputes and chargebacks. To assist in such efforts, Visa and MasterCard have
developed several programs designed to mitigate fraud risk and curb chargebacks.
In the event that the Merchant exceeds any of the guidelines defined by these
programs, the Merchant is subject to operating procedure requirement
modifications, fines, and/or termination of the Bank Card Merchant Agreement.
2.
The Merchant assumes all responsibility for any fines, fees, penalties, and/or
operating procedure modifications levied by Visa and/or MasterCard in
accordance with respective merchant monitoring programs. Such programs
include, but are not limited to, the monitoring of chargebacks, Cardholder
BANK CARD MERCHANT RULES AND REGULATIONS
January 2004
disputes, improper card acceptance, improper processing of declined transactions,
and abnormal fraud or counterfeit sales activity.
T.
Other -- Rights, Responsibilities, and Liabilities
1.
The Merchant shall indemnify, defend, and hold Bank and its directors, officers,
employees, affiliates, and agents harmless from all expenses related to any lawsuit
filed by Merchant against Bank, a card-issuing bank, Visa, and/or MasterCard
challenging Merchant’s obligations regarding any chargeback which is valid
according to Visa rules and/or MasterCard rules as may be determined by Visa,
MasterCard, or a court of competent jurisdiction. This indemnification shall
survive the termination of the Bank Card Merchant Agreement.
2.
The Merchant shall not acquire any property or any other right, claim or interest
including any patent or trademark right or copyright interest in any FTB, Visa
U.S.A. Inc., or MasterCard International Inc. system or in any of the equipment,
software, processes, programs or data utilized by FTB, Visa U.S.A. Inc., or
MasterCard International Inc. in connection with such systems other than an
interest in any equipment supplied by the Merchant for use in connection with
such systems but such interest shall only be as specified in the Bank Card
Merchant Agreement.
3.
The Merchant's right to use any FTB, Visa U.S.A. Inc., or MasterCard
International Inc. system and any equipment and software used to access such
system shall not be assignable and its duties with respect to them shall not be
delegable in any way without prior written consent of FTB, Visa U.S.A. Inc.,
and/or MasterCard International Inc.
4.
The Merchant shall observe complete confidentiality with regard to all FTB, Visa
U.S.A. Inc., and MasterCard International Inc. owned software and
documentation and shall not disclose or otherwise permit use of or access to it by
any person or entity other than an employee of the Merchant with a need to know.
5.
The Merchant shall not make or attempt to make any repair, adjustment, alteration
or modification to any system access hardware or software except as expressly
authorized in writing by FTB, Visa U.S.A. Inc., and/or MasterCard International
Inc.
6.
The Merchant shall not modify or enhance any FTB, Visa U.S.A. Inc., or
MasterCard International Inc. owned software without the prior written consent of
FTB, Visa U.S.A. Inc., and/or MasterCard International Inc.
7.
The Merchant shall use its best efforts to protect the hardware and software of the
respective FTB, Visa U.S.A. Inc., or MasterCard International Inc. system by
providing the same level of security that is provided to the Merchant's other
proprietary systems.
-5-