Marijuana Dispensaries

We have several marijuana dispensaries in Massachusetts. We have noticed that they are not using their actual address when customers use the dispensary ATMs to make withdrawals at their locations. We have received multiple disputes because the customer does not recognize the address. These transactions are routed through the NYCE network. Is there a network rule that they should be using the correct address, or is there something I am not aware of that would allow a network to use an alternate address? These are actual addresses in our area, but not the location of the dispensary.

My guess is what you are seeing are "cashless ATM" transactions which likely uses a corporate address for the MRB, which in many cases is not be the same as the actually dispensary address. The cashless ATM setup doesn't actually have an ATM on site, it's simply using the ATM withdrawal transaction to facilitate the debit from the customers account to be settled later to the dispensary's account.

As far as the network rules about addresses, you'd have to look in the NYCE operating rules. I'm fairly certain in my past life I've dealt with customers who bought things online or with big box merchants where they didn't recognize the address because it wasn't where they actually purchased the item, so I don't think that's the case, but if you're concerned, verify that with NYCE.

Maybe sharing a list of these known addresses to your call center will help them provide a memory jog to the card holder before a dispute is filed?

For Reg E requirements, look at 1005.9(a)(5)

https://www.bankersonline.com/regulations/12-1005-009

The networks are pretty good about following these rules. What gets me is the customer; if I spent $72.94 and it shows on my statement one time on the date I spent it, I know what it is and I don't claim to the bank I don't recognize THAT one. It's pretty easy to figure it out. The exception is if there was a subsequent charge for the same amount at the place I do recognize.

If this is becoming more common, perhaps a statement stuffer or message will help clarify things for customers. But do not dissuade them from making what they feel are valid claims.