Thursday, June 7, 2012

Chargeback Reason Code 74: Late Presentment

Definition. Chargeback Reason Code 74 is issued when card issuers receive a transaction after the 30-day time frame, within which a transaction needs to be deposited, and the account number is blocked or closed. Time frames exist to ensure that transactions are deposited in a manner that will allow for timely payment processing and billing to the cardholders' accounts. It is easy to imagine how a transaction, deposited a month after it was generated, will not be remembered by the cardholder and will prompt him or her to file a dispute a initiate a chargeback. There are no remedies for chargebacks on payments deposited more than 181 days after the transaction date.

Most Common Causes. As the definition suggests, a Reason Code 74 is issued when the merchant does not deposit the sales receipt with its merchant account provider within the time frame specified in its merchant processing agreement.

Merchant Actions.
  • Back-Office Staff.

    • Sales Receipt Deposited on Time. If the sales receipt was deposited within the 30-day time frame, you should provide your merchant services provider with a copy of the sales receipt to be represented to the card issuer.

    • Sales Receipt Deposited Late - Account Closed. If the sales receipt was not deposited within 30 to 180 days of the transaction date and the cardholder account has been closed, there is no remedy and you should accept the chargeback.

    • Sales Receipt Older than 181 Days. If the sales receipt was deposited more than 181 days after the transaction date, even if the card account is not closed, there is no remedy and you should accept the chargeback.

    • Deposit Timing Guidelines. Your back-office staff is responsible for the timely deposit of sales receipts with your merchant account processor and they should do so as soon as possible, preferably on the date of the transaction and not past the time-frame, specified in the merchant processing agreement.
  • Owner/Manager.

    • Manual Deposit of Paper Sales Receipts. It is the responsibility of your organization's senior management to train the back-office personnel to deposit sales receipts on time. If your business deposits paper receipts, which take more time to handle, make sure that they are deposited within the time frame specified in your merchant account processing agreement.

    • Transaction Data Capture Terminals. Transaction data capture systems can be set up to automatically deposit your daily transaction batches, saving you time and substantially reducing, possibly eliminating, the probability of a chargeback Reason Code 74.

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1 comment:

Dano said...

We received a letter from our acquirer bank stating that MasterCard as of 10/04/08 will assess a "late presentment" chargeback if the transaction is not captured within seven calendar days.

This is a change from the thirty calendar policy. I feel this is an unfair policy that penalizes e-commerce merchants who may not be able to ship products within seven calendar days. The current policy is to not capture funds until a product ships.

How are merchants to deal with this new policy? It seems we have no voice or recourse on this policy change with MasterCard transactions.