CREDIT CARD ASSOCIATIONS RULES AND INFORMATION

Please note that NDMS did not create the following merchant rules listed below. These were carefully made and are enforced by issuing banks and the credit card associations. NDMS is here to help merchants understand and comply with these rules ultimately for their financial benefit.

1. ADVERTISING

Visa, MasterCard, travel and entertainment payment cards, and banks require that you provide adequate signage to inform the public that payment cards will be accepted at your place of business. A merchant’s use of any trademark, trade name, service mark or logotype is subject to approval by Visa/MasterCard Bank or NDMS.

2. HONORING CARDS

When a customer uses a payment card for his or her means of purchase at your business, you, as a responsible merchant, must adhere to the following rules and regulations:

You cannot impose a minimum or maximum transaction amount as a condition for accepting a payment card

You cannot impose a surcharge or fee on a cardholder as a condition of sale

You must honor all valid payment cards presented by a cardholder

For card present retail transactions in most states, you may request picture or signature identification from the cardholder in the form of a driver's license or other photo ID, but unless instructed by the authorization center, you may not record other personal information, such as phone, address or drivers license number. The exception to this is a Mail/Telephone order or delivery required transaction.

You shall not make a photocopy of any card under any circumstances nor request the cardholder to provide a photocopy of the card as a condition for accepting a card transaction.

3. CARD EXAMINATION

At the point of sale, the card should be carefully examined to determine whether it is a legitimate card. The name of the card, e.g. Visa, MasterCard, American Express, Diners and or Discover, should appear in bold letters on the card.

As a qualified merchant, you shall prior to completing a Card Transaction:

To complete the transaction, the quantity, description and price – including taxes and other miscellaneous fees – of the products and services sold must be entered in the terminal. The cardholder's signature is required on the sales draft or electronically printed receipt and a copy must be provided to the cardholder at the time of delivery. The completed sales slip copy must contain the following information:

If you use an electronic authorization or draft capture terminal, swipe the payment card to read and capture the card information via the magnetic stripe, and use an electronic printer, you do not have to imprint the card.

If you are unable to swipe the card, due to a defective magnetic stripe or your terminal or printer is down, you MUST imprint the card to prove that the card was present at the time of sale. In addition, the imprinted sales slip MUST have the cardholder’s signature.

4. AUTHORIZATION

All transactions must be authorized via terminal or authorization center. Failure to authorize a sales transaction may result in a chargeback and/or the termination of your merchant agreement. An authorization only indicates the availability of the cardholder's credit at the time the authorization is requested. It does not warrant that the person presenting the card is the rightful cardholder, nor is it an unconditional promise or guarantee that you will not be subject to a chargeback or debit.

All goods and services purchased must be placed in one transaction on the same sales slip and processed as a single sale. Splitting the sales can result in termination of the merchant account by the Bank or CRI. In the case of a "Call Center" response, a call must be made to the appropriate authorization center for resolution.

Remember that an authorization code only indicates the availability of a payment cardholder's credit at the time of a sales transaction. It does not warrant that the person presenting the card is the rightful cardholder. If proper procedures were not followed at the time of the transaction a merchant is subject to a chargeback and could be debited for the amount of the transaction.

If you do not receive credit card approval, return the payment card to the customer and quietly inform him or her that the transaction has been declined.

5. BALANCING YOUR TERMINAL DAILY

Credit card terminal balancing should be done on a daily basis. You must compare the amount and number of sales slips to the total number provided by the terminal audit trail. In addition, you should then balance your audit trail against the host total. Failure to follow these balancing procedures may result in lost sales. Refer to your terminal Reference Guide for detailed instructions.

6. EXCHANGES, RETURNS, REFUNDS, CREDITS and ADJUSTMENTS

If you have special store policies, you must clearly disclose your policy on the sales slips. For example: NO REFUNDS, EXCHANGE ONLY or IN-STORE CREDIT ONLY.

7. COLLECTION OF PRE-EXISTING DEBT

As a merchant you are not allowed to process for payments any transaction(s) representing the refinancing of an existing obligation of a cardholder. This includes obligations previously owed to merchant, arising from the dishonor of a cardholder's personal check or representing the collection of any other pre-existing debt.

8. CASH ADVANCES

It is not acceptable under any circumstances, to deposit any transactions for the purpose of obtaining or providing a cash advance either on merchant's card or the card of any other party. Engaging in any such transactions shall be grounds for immediate termination.

9. DUPLICATE TRANSACTIONS

If a duplicate transaction occurs, your account will be debited for any adjustments and you will be liable for any chargebacks resulting thereof.

10. MAIL ORDER/TELEPHONE ORDER or MOTO, PRE- AUTHORIZED ORDER, and WORLD WIDE WEB ORDERS

Since you will not have an imprinted or magnetically swiped transaction and a cardholder's signature on the sales slip as you would in a face-to-face transaction, you will assume all risk associated with accepting a mail/telephone order transaction. With this in mind we recommend the following:

For selling goods and/or services by telephone or other means, whereby the cardholder is not present, you shall: (1.) obtain as much information concerning the cardholder as possible, including a telephone number and statement billing address, (2.) perform an Address Verification System (AVS) check against the statement billing address or zip code provided by cardholder, (3.) obtain tracking information including signatures from the person receiving the goods as confirmation that goods were received. (4.) do not submit a transaction for processing until after the merchandise has been shipped or the services has been provided to the customer. Lastly, notify the cardholder of delivery time frames, special handling or of a cancellation policy. If after the order has been taken, additional delays will be incurred, notify the cardholder.

11. DELAYED DELIVERY OR A DEPOSIT BALANCE

In a delayed delivery transaction, whereby a cardholder makes a deposit toward the full amount of the sale, you should execute two separate sales slips, one for the deposit and the second for payment of the balance upon delivery of the merchandise or the performance of services.

12 - RECURRING TRANSACTION REGULATION

If you are a recurring transaction client who will be charging a cardholder's account periodically for recurring goods or services, for example membership or subscription fees, the cardholder shall complete and deliver to you the merchant, a verified request for such goods or services to be charged to his account. The request must at least specify the transaction amounts, the frequency of recurring charges and the duration of time for which the cardholder's permission is granted.

13. CHARGEBACKS

After a sales draft has been processed, there are several reasons that a merchant's account may be debited. These debits are called chargebacks.

The following list details the main reasons for a chargeback:

14. FRAUD TRANSACTIONS

NDMS conducts daily monitoring of credit card processing in order to detect questionable or fraudulent activity. From time to time, NDMS may contact a merchant to clarify specific transactions and may, at that time, request documentation in support of those transactions.

As a merchant, you are required to comply with our request by providing copies of sales drafts, invoices, contracts or any other documentation regarding the transactions. Failure to comply may result in suspension of processing privileges and/or termination of the merchant account.

If the appearance of the payment card being presented or the behavior of the person presenting the card is suspicious in nature, you must immediately call the Voice Authorization Center for the Card type presented and ask to speak to a Code 10 operator.

Merchants cannot accept submission of sales other than for your business. You may present to NDMS for payment only valid debts that arise from an exchange of goods or services between a cardholder and your establishment. If you deposit or attempt to deposit sales between cardholders and any business other than your business factoring, you will be subject not only to chargebacks, but also to immediate termination of your merchant agreement.

Merchants cannot enact a sales transaction with the absence of credit card. For walk-in orders, NDMS recommends that you do not accept credit card purchases if the card is not presented. We suggest you obtain another form of payment. Transactions completed without a credit card are high-risk transactions, and are subject to a higher incidence of chargebacks.

The following are some further examples of prohibited transactions:

15. MERCHANT TERMINATION

The following list has been prepared to assist you, the merchant, in operating your merchant account correctly. There are a number of areas in which the bank has the right to terminate a merchant, including:

Minimum Charge

The merchant is not permitted to penalize a customer wishing to use his or her credit card to pay for goods and / or services by requiring a minimum purchase, charging any surcharge, finance and /or carry fees.

Factoring

A merchant is not permitted to submit any sales drafts or the like that are either not the merchant's or are not his/her actual sales.

Cash Advances

A merchant is not permitted to make cash advances to any cardholder and charge this cash advance to the individual's credit card.

Legal transactions

A merchant is not to utilize his/her merchant account for any activity that is unlawful.

Chargebacks

Any merchant who consistently has a large volume of chargebacks on any regular basis.

Refunds

A merchant is not permitted to give cash refunds for any credit card transaction. A credit draft must be issued to the same credit card account that was used for the original sale. No surcharge, penalty or processing fee may be charged in connection with refund unless the merchant is conducting business in the travel industry.

Confidentiality

A merchant cannot disclose cardholder account number or other information to third party interests for financial reward.

Credit Card Industry Compliance Information

16. MERCHANT ACCOUNT CHANGES

You are responsible for maintaining a commercial business checking account at a financial institution that is a member of the Federal Reserve ACH System. If you have changes in your checking account number, legal name or structure, company DBA name, address, telephone number or type of business, you should immediately contact NDMS customer service for a change request.

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Credit Card Associations Rules