isa U.S.A. has released a revised and expanded edition of its "Card Acceptance and Chargeback Management Guide." The new version, which became available in September 2005, is titled "Rules for Visa Merchants: Card Acceptance and Chargeback Management Guidelines."

Every ISO and merchant level salesperson (MLS) should not only distribute a copy to merchants with chargeback problems (or even potential chargeback problems) but should also keep a copy to review themselves.

Visa's manual is a comprehensive guide designed for all businesses that accept Visa-branded cards. The intent is to provide merchants with accurate, up-to-date information on processing Visa transactions while minimizing risk of loss from fraud and chargebacks.

The information in it applies to both card-present and card-not-present merchants. It includes requirements and best practices for e-commerce.

It also contains detailed information on the most common types of chargebacks that merchants receive and what can be done to remedy or prevent them. The guide lists each chargeback reason code and provides information that defines each chargeback type.

It lists the most common causes of chargebacks and provides instructions for merchants on how to deal with them. There are instructions for merchants' back-office staff to re-present the chargeback to the issuing bank and tips for their POS staff and the owner/manager to avoid each chargeback type. It also provides risk management tools.

As an ISO or MLS, use this manual as a reference guide. You can then help merchants to determine what is causing their chargebacks. Also use the guide to determine if a change in process or an additional tool such as address verification service, cardholder verification value (CVV2 and CVC2), or Verified by Visa will help merchants lower chargebacks. These actions will help to reduce your overall risk exposure and allow merchants to continue processing with you.

The guide also will serve as a useful tool for training new agents. It includes a section on clearing and settlement that explains the processing cycle for Visa card transactions, for both card-present and card-not-present purchases.

It also includes a section on Visa's rules for merchants. The manual clearly lays out some of the rules that many ISOs and MLSs get wrong for their merchants. For example, some of these rules are:

Dollar Minimums and Maximums

Rule: Merchants should always honor valid Visa cards, in their acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts is a violation.

No Surcharging

Rule: Always treat Visa transactions like any other transaction; that is, do not impose any surcharge on a Visa transaction. Merchants may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.

Split Sales

Rule: Prepare one sales receipt per transaction using the full transaction amount. Merchants are not allowed to split the cost of a single transaction between two or more sales receipts, using a single cardholder account, in order to avoid authorization limits (or in an attempt to avoid Chargeback Monitoring Program penalties).

The guide also contains Merchant Web Site Requirements that many merchants fail to include on their Web sites. This could result in a fine to the ISO. The merchant Web site requirements are:

• Complete description of goods and services. Remember, merchants have a global market, which increases opportunities for unintended misunderstandings or miscommunications. For example, merchants selling electrical goods should state voltage requirements, which vary around the world.
• Customer service contact information, including e-mail address or phone number. Online communication may not always be the most time efficient or user friendly for some customers. Including a customer service telephone number as well as an e-mail address promotes customer satisfaction.
• Return, refund and cancellation policy: This policy must be clearly posted.
• Delivery policy. Merchants set their own policies about delivery of goods, that is, if they have any geographic or other restrictions on where or under what circumstances they provide delivery. Any restrictions on delivery must be clearly stated on the Web site.
• Country of origin. Merchants must disclose the permanent address of their establishment on the Web site. They should check with their merchant bank to ensure the disclosure is made in accordance with the Visa U.S.A. Inc. Operating Regulations and local law.
• Export restrictions (if known).

Visa's guide also explains in detail the Copy Request Process and the updated Chargeback Life Cycle that you can use as a training tool and should distribute to all merchants with chargeback problems. It has sections on chargeback remedies and how to avoid chargebacks. It also lists the reason codes with the most common causes and how merchants should respond to and avoid chargebacks for that specific reason code.

The "Rules for Visa Merchants: Card Acceptance and Chargeback Management Guidelines" manual is posted on Visa's Web site in PDF format. Download a copy at: www.usa.visa.com/download/business/accepting_visa/ops_risk_management/rules_for_visa_merchants.pdf .

Why not provide merchants with a copy as a holiday gift? This gesture will go a long way in terms of retaining your merchants. They'll be grateful to you for helping them to avoid termination because of rule violations or excessive chargebacks.

Happy holidays to all the readers of The Green Sheet and best wishes for a healthy and prosperous New Year.

David H. Press is Principal and President of Integrity Bankcard Consultants Inc. Phone him at 630-637-4010, e-mail dhp@integritybankcard.com or visit www.integritybankcard.com .