We have recently started issuing debit cards and our loss prevention staff needs some guidance on the governing rules for allowable returns and the related deadlines. Can someone point me in the right direction? UCC? Card issuer? They seem to run into dead ends when they ask questions of our processor, MPS. Although this isn't my area of responsibility, I saidthought I'd see if I could find out anything.

Who issues the cards? There operating rules for both Visa and Mastercard which govern disputes.

I work for a processor for small community banks and we do all the debit card disputes here (we issue Visa), on behalf of the institutions we sponsor. I'm surprised your processor has no idea what's going on. But then again, perhaps I'm not understanding exactly how your system works.

If you can give me some more information, I might be able to help more.

We are using MasterMoney (Mastercard's product) debit cards. I will certainly recommend that our staff contact them for the operating rules. I was not sure if there is some organization like NACHA that governs the return process for all participants.

For example, we have gotten charged back with items on a closed account that are below $25.00, so the vendor is not required to confirm them. We need to know what our responsibility is.

Unfortunately, I'm not familiar with the Mastercard products.

However, I do know that for Visa there are minimum amounts for certain types of disputes. Also, there is a fee to initiate a dispute so sometimes it makes more sense to write it off, especially if it's a small dollar amount.

Visa rules again, but perhaps there are similar for Mastercard: If an item comes in to post after 30 days from the date of the transaction and the checking account was closed on day 31 or later and the institution has no means to collect the funds, there is a chargeback right. However, if the account was closed on day 27 and the item comes in to post on day 30, there is no chargeback right.

Hopefully you can get some information from a Mastercard expert that will be able to help out more than I have!

Thanks for your help. I will suggest that our Loss Prevention Dept. contact Mastercard.

NMB, e-mail me off line with your specific situation and I will see if I can help. I've handled MasterCard & Visa chargebacks for 5 years in a risk management setting.

Sorry, my e-mail address is cgroat@advanta.com

The chargeback rules can get very complicated very quickly. Time frames and dollar threshholds vary according to the type of merchant involved, the amount, the relative geography of issuer to acquirer, and the reason for the chargeback. MasterCard will sell you various manuals to give you the specifics. There are many, including an Operations Manual, ByLaws and Regs, Chargeback Guides, Settlement Manual, etc. This is not a job for amateurs. You are better off having chargebacks handled by someone whose job it is to handle them, whether it's in house or outsourced.
Opinions expressed and advice given are my own and have absolutely nothing to do with my employer.