Card Present & Card Absent Best
Practices
Facilitator: Kristy A Stanley
Fraud and Compliance Officer
June 16 2011
Legal Disclosure
These materials are provided for informational purposes only and should not be relied upon for
marketing, legal, regulatory or other advice. You should independently evaluate all content and
recommendations in light of your specific business needs, operations and policies as well as any
applicable laws and regulations. Caribbean Credit Card Corporation Ltd. is not responsible for your
use of these materials, including errors of any kind, or any assumptions or conclusions you might
draw from their use.
Use of the following information is the sole and exclusive responsibility of the user.
Card Present Environment
Best Practices
Card Present and Card not Present
Best Practices
The issue of credit/debit card fraud presents the
single most important challenge to our business
 Risk Factors
 Opening up of the region to international travel
 Growth of the credit/debit card business will attract
persons who know our vulnerabilities
 Increasing travel by cardholders
Common Standards
 Place Decals on the door, window & cash registers
of your business
 Accept all Qualified cards
 These cards may look different but they all
 Have the same basic card elements and security features, and
 Guarantee payment to you when acceptance procedures are
correctly followed.
Common Standards
- No surcharging
- Process reversals not refunds
- Deposit transactions for your business only
- Deposit transaction receipts within 5 calendar days of
the transaction.
Common Standards
 Do not set minimum and maximums
 Include taxes in the sales draft
 If you are required to collect local taxes, these should be
included in the total transaction, as it appears on the
sales draft
 Do not offer cash refunds for transactions
 Returned goods or cancelled services
 Offering refund vouchers for refund and adjustments
protects you from loss through fraud
 A Fraudster, using a stolen or counterfeit card, could
purchase goods and return them for cash
Authorization
 Request authorization for ALL purchases and
cash advance transactions ( bank only).
 When the card won’t swipe
Usually means one of three things:
• The terminal’s magnetic-stripe reader is not working
properly,
• The card is not being swiped through the reader correctly,
or
• The magnetic stripe on the card has been damaged or
demagnetized.
Authorization
 Merchants should take the following steps:
• Check the terminal to make sure it is working and that you are
swiping the card correctly.
• If the terminal is okay, check the card’s security features to make
sure it is not counterfeit
• If the problem appears to be the magnetic stripe, follow merchant
procedures, which may include:


Key-enter transaction data for authorization or
Call voice-authorization center
• For key-entered or voice-authorization transactions, make an imprint of
the front of the card. The imprint can be on the terminal sales receipt or a
separate manual sales receipt. Either way, it should be signed by the
customer.
Transaction Adjustments
 Split Sales (Cash, Check, two cards)
 If more than one card, each with a different account
number, is being used, you must use a different sales
draft for each card.
 If payment was made with card and cash or check, keep
separate receipts indicating such together
 Exchange of goods of greater value
 Prepare a sales draft & seek authorization for the
difference in cost
 Exchange of goods of lesser value
 Prepare a refund voucher for the difference in cost
DO NOT ACCEPT THE CARD
 If the card is invalid
 If you suspect that the card may be altered or
counterfeit
 If the number shown on your magnetic card reader or
printed by the electronic point-of-sale terminal does
not match the number on the card
Staff Training
 Merchant staff must be trained on the proper card
acceptance procedures including how to recognize
Visa & MasterCard security features
 Keep your staff up to date with training material
provided by your bank.
 Training improves customer service
 Training reduces losses and risks
 Your employees should also know what to do if
they have any reason to be suspicious
Card Absent Environment
Best Practices
Merchant Procedures
 Follow card acceptance procedure for card not
present transactions.
 For recurring transactions:
 Use the “Doing Business As Name” in all correspondence with the




cardholder.
Inform / provide cardholder of third party payment process agent
name
Billing amount on the card statement should match the amount agreed
with the Merchant
Shipping charges added
Ensure goods or services are delivered in the timeframe agreed
Merchant Procedures
 Provide a Customer Service contact phone number or
email
 Clearly state merchant termination/cancellation
policies in Cardholder agreement
 Marketing material, website
 Clearly inform cardholder upfront of the billing
arrangements and all charges
 Act promptly to Cardholder instruction to cancel a
recurring payment
Merchant Category Codes (MCC)
Merchant Category Codes
 Hotel and Lodging
 Automobile Dealers
Hotels
 Reservations
 Ask for
 Cardholder’s name, account number & expiration date
 Optional - Manual Authorization / Advance Deposit


No show
Fraud Prevention
 Inform Cardholder of
 rate, including taxes,
 Advance deposit
 exact name and address of hotel
 reservation confirmation code
Hotels
 Reservations
 Explain to Cardholder



The cancellation policy,
Reservation is guaranteed until check-out time on the day
following the scheduled arrival date
Hotel “No show” policy & rate
 (one night’s lodging, including taxes)
 Contact the bank to obtain issuer information
(telephone number) in order to complete name and
address verification prior to processing the
authorization.
Hotels
 Check In
 Confirm length of stay
 Verify name of Guest with Name on Card*
 Request manual authorization for total accommodation
during the first night
 If an advance deposit was processed, this amount
should be deducted from the total transaction amount
 Check Out
 You do not need to request a new authorization if the final
transaction is less than the sum of all authorized amounts,
plus 15%
 Cardholder signs total invoice
Hotels
 Handling No-Show
 Transaction receipt should include the words “No-Show”
on the signature line of the transaction receipt
 Handling Over-Booking
 If guaranteed accommodation is not available when the
Cardholder arrives, you must provide the Cardholder
with the following services at no charge




Comparable accommodations for one night at a Hotel at least of
the same quality
Transportation to the alternative Hotel
Forwarding messages and telephone calls received to the alternate
Hotel
If requested, a 3 minute telephone call
Car Rental Agencies
 Verify name of Customer with name on Card
 Request authorization before the Cardholder departs
with the vehicle
 Valid for the entire rental period
 DO NOT include potential damages or loss of the
rental vehicle. (Process transaction separately and
obtain a signature.)
Car Rental Agencies
 When should you request a new authorization
 If cardholder extends rental period and the revise
amount exceeds the original authorization by 15%
 If legitimate additional charges exceeds the original
authorization by 15%

Fuel Used, Additional rental fees, Insurance, Damages,
Parking tickets/ other traffic fines
Ensure that Agreement covers all additional charges
/ insurance policy and is signed by the cardholder
EXAMPLE
The actual transaction is $500.00. As shown below, this is more
than the previously authorized amount plus 15%.
Previously authorized amount $350.00
15% added 53.00
Total $403.00
In this situation, an additional authorization is necessary.
$500.00 – $350.00 = $150.00
ACTUAL PREVIOUSLY YOU MUST OBTAIN
TRANSACTION AUTHORIZED ADDITIONAL AUTHORIZATION
AMOUNT FOR THIS AMOUNT*
*The total sum of the additional authorization amount plus the
previously authorized amount must equal the actual (or final)
transaction amount.
Conclusion
Payment card fraud may never be eliminated however
through:
 Adherence to the industry best practices
 Continuing merchant awareness
Payment card fraud losses may be minimized.
Questions and Comments
Thank You
for your time and
attention 