We have a "debit pad" ("stand-in limit") in place as a courtesy to our customers to ensure their POS transactions will go through in offline situations, etc. We also have a formal Overdraft Priviledge Program.

This of course effects both customers who have opted in and those who have not and either can overdraw as a result. Of course, we do not charge those that have not opted in an overdraft fee and understand that we must treat them the same as those who have opted in.

We have had several non opt-in customers who are not happy when they overdraw with a POS transaction due to the debit pad - even though they are not charged an OD fee, they simply do not want to overdraw at all. If we receive a specific complaint such as this, is it ok to turn the debit pad off for that customer? Don't want to get hammered for treating them differently.

My stand-in processing with MasterCard covers my entire BIN, I do not have the ability to input stand-in limits on a card by card basis. Also, this will not prohibit overdrafts from the $1 pay at the pump authorizations that can then be processed for up to $75 (VISA) or $100 (MasterCard) or authorizations at a restaurant or hotel where a tip is added over and above the authorization amount.

My answer to these opt-out customer is to hand the a check register and offer to teach them how to use it to avoid the overdrafts with their card.

It's probably a good idea to review those stand-in agreements to see how often they are actually used, and for how much. If you don't experience much offline time and the stand-in amounts are rarely used, you might consider trying to reduce them to minimize exposure to fraud, if nothing else. It can also address, albeit not completely, the customer who complains if you "allow" him/her to overdraw.

In my experience, we had very little down time and as mentioned above, we did not have the ability to adjust on a customer basis. It was one size fits all for debits when offline.

I have a question along these lines, we have a customer who opted out of the POS transaction fee. He continually abuses this. He withdraws all of his payroll at an ATM as soon as he gets paid and then goes to a convenience store and overdraws his account with his debit card for 100+ and because he opted out we can't charge him anything. Can we cancel this guys debit card or his account?

Yes, you can definitely cancel this customer's debit card and/or close his account for excessive overdrafts. There is no "right" to a DDA account and no "right" to a debit card. Send him a letter stating the date the account will be closed so he can wrap things up, hot card the card right now, and be done with the headache.

With our processor, stand-in limits are BIN-wide, we can't adjust them per customer.

If you would revoke the card or close the account of someone who was frequently overdrawn via this method, but paid the fee, you can do it here too. You cannot discriminate between the way you handle your opt-in customers vs. your other customers.