Merchant Services
DISCOVE R.
NETWORK
In this Agreement, the words "Merchant", "you" and "your" meal15 the party that has received
and agreed to the terms of this Agreement; the words "we", "our", "Discover' "etwork" and
"us" refer to Discover Financial Services, Ine.; "Business Day" rders to Monday through Friday
except when we arc closed for business; "Card" means, (i) a valid payment card or access device
displaying a Discover' or Discover Network logo, service mark or acceptance mark identified
in the Operating Regulations, as defined below, or as otherwise .lpproved by uS: or, (Ii) the Card
Account if the Card is not present at a physical location; "Card Account" means the ac'C<)unt
represented by a unique account number which tbe Cardmember may ose as permitted hy the
Issuer; "Cardmember" or "Cardholder" means a person to whom a Card has been issued
and/or any authorized user of a Card; "Issuer" means a third party th,lt we permit to issue
Cards; "Merchant Account" meaos the IS digit accoont number beginning witb 60 II asSIgned
hy us for your use in connection with Card acceptancc; "Operclting Regulations" refers to our
Merchant Operating Regulations as described in Section 2(a); and "Sales Data" means evidence
of Card transactions, whether in paper or electronic form, that is received bv ns in the form
and format that we specify. Unless the context clearly indicates otherwise, words used in the
singular include the plural and words used m the plural include the smgular.
THIS AGREEMENT GOVERNS YOUR ACCEPTANCE OF CARDS. YOUR ACCEPTANCF
OF A CARD SALE OR SUBMISSION OF SALES DATA DOCUMENTING A CARD SAL!'
INDICATES YOUR ACCEPTANCE OF THE TERMS OF THIS AGREE\1ENT. This
Agreement supersedes any other agreements concerning Cards. Please rcad this Agreement
carefully. You must follow all of the terms set forth below.
1. Acceptance of Cards. You agree to accept Cards at all of your estahlishments in payment
for purchases of goods and services from all Card members who want to use Cards at your
establishment. You agree to follow the procedures in this Agreement and in our Operating
Regulations concerning your acceptance of Cards and the preparation and submission of Sales
Data. Please refer to the Operating Regulations for specific details regarding how you may
accept Card sales,
2. Other Importont Documents.
a. Operating Regulations. The Operating Regulations are incorporated intO this Agreement
as Exhibit A. The Operating Regulations arc an integral part of this Agreement and contain
procedures which you must follow in connection with your acceptance of Cards. We may
change the Operating Regulations from time to time by sending you written notice thirty (30)
days in advance. However. certain changes may hecome eHective immediately for security
reasons. If there is any conflict between this Agreement and the Operating Regulations,
the terms of this Agreement will govern.
b. Exhibit B. If you are a new \1erchant, we will notify you in writing of certain important
terms of your Agreement, including, the fees payahle hy you as descrihed in Sec"tÌ<m 9, the
deadline for suhmission of your Sales Data and the timing of our Settlement payments
as described in Section 8. This wntten notice is incorporated hy reference intO this Agreement
as Exhibit B. Please retam this Agreement and the Exhibits. In the evem of a conflict between
the terms of this Agreement and the Operating Regulations, tillS Agreement shall govern. In the
event of a conflict between thc terms of Exhibit B and the Operating Regulations, Exhibir B
shall govern. If you are an existing Merchant, you will have received written notice of the fecs
payable by you as described in Section 9 and you will not receive Exhibit B. If you arc ao
existing Merchant, your settlement timing and deadline for suhmission of S'1!cs Data are
described in the Operating Regulations.
3. Authorization and Soles Data Submission.
a. Authorization. For each individual Card sale above the flonr limit indic.lted in our records
(the "Floor Limit"'), you must obtain authorizarion from us prior to making the Card sale.
If you accept a Card sale above the Floor Limit without obtallling aUthorization from us, the
Card sale is subJect to Chargeback to you. You agree not to obtain authorization for a Card sale
if you are not capable of promptly shipping the merchandise or services ordered by the
Cardmember. If ynu accept Card sales at your retail outlet, if any, you agree to provide
complete and unaltered track data, including without limitation, Card Verification Value
("CVV") data, to us from all Cards as described m the Operating Regulations. Please refer
to the Operating Regulations for specific information on obtaining authorization.
b. Submission of Sales Data. You agree to transmit Sales Data to us each Business Day m
our form and format and by the transmission deadline, each of which is described in the
Operating Regulations. Additional requirements for Card sales by mail, telephone and Internet
are described in Section 4(h) of the Agreement.
4. Telephone, Moil Order and Internet Card Soles. You agree to obtain our ¡mor approval before
accepting any Card sales over the Internet. You agree to comply with our data security
and encryption requirements in the Operating Regulations, including our procedures for Card
transactions over the Internet and Card transactions 00 your website. Any Card sales over
the Internet that do nOt comply with the Operating Regulations are suhject to Chargehack
as described in Section 11. You may accept Cards for telephone or mail order sales if you
follow the procedures in the Operating Regulations.
o. Address Verifico~on. For each Card sale hy Internet, mail or telephoue. in addition to
obtaining authorization as descnbed in Section 3(a), you must obtain an address verification from
MERCHANT SERVICES AGREEMENT
us prior to making the Card sale, regardless of whether the authorization decisinn is approved
or declined. Refer to the Operating Regulations for detailed address verification reqUIrements.
b. Documentation of Card Sales. For e'leh Card sale by Internet, mail or telephone, you must
obtain the followmg information from the Cardmember: Cardmember name, Card Account
numher, Card expiration date and shipping address. You must include such information on
an invoice or other documentation provided to the Cardmemher at the time of delivery of the
merchandise or services ordered in the Card sale and you must retain such information, along
with the shipping date, for the period set forth in Section 12. You shall provide the shipping date
to the Card member at the time of each telephone order Card sale and upon request for each
mail order Card sale.
c. Transmission of Soles Data. For each Card sale by Internet, mail or telephone, Sales Data
shall he transmitted to us using an electronic means ot transmission. You agree not to transmit
Sales Data t<> us for merchandise or services ordered by a Cardmember until the merchandise or
services have been shipped, delivered or furnished to the Cardmember; provided that
yoo may accept a Card for a deposit on a purchase of merchandise or services and you may
transnllt the Sales Data relating to such deposit prior to the time of shipment or delivery of the
merchandise or services purchased in such Card sale.
5. Speciollndustry Requirements. If you accept Card sales for recurring hilling or installment
sales transactions with Cardmemhcrs, please refer to the Operating Regulations for detailed
requlfements for these transactions, including the format for authorization requests. If you are
a merchant in the lodging industry, please refer to the Operating Regulations for procedures
for guaranteed reservations, advance deposits and priority checkouts. If yuu are a merchant
selling petroleum and related products that operates "cust<>mer activated terminals", please
refer t<> the Operating Regulations fur specific procednres governing acceptance of Card
transactions on these terminals.
6. Retail Ourlet Cord Soles. If you accept Card sales at your retail outlets, if any, you must
follow the procedures in tbe Operating Regulations including those for the preparation of Sales
Data, and the transmission of complete and unaltered track data, including without limitation,
CVV ebta, from all Cards as described in the Operating Regulations. For each Card sale
accepted at your retail outlets, if any, the Cardmember or authorized user of a Card must sign
the Sales Data in your presence and the signature must be reasonably similar to the signature
appearing on the signature pancl of such Card.
7. Credits for Returns. You may establish your own policy concerning refunds and you agree to
advise Card members, in advance of any Card sale, of this policy. Consult the Operating
Re'gulations for the procedures that vou must follow so that we will honor your return policy
'llld the Credits that voo issne.
8. Settlement of Transactions. As used in this Agreement, the term "Settlement" means the
procedure by which we will reimburse you for the amount of each valid Card sale for which you
suhmit Sales D,lta to us that represents a purchase from your establishment with a Card, minus
an amount equal t<> the sum of any Chargehacks, any credits to Cardmembers that you submit
to us. and the ;'v1erchanr Fee and other fees, if applicable. and plus or minus adjustments that
we make to reconcile or correct errors in your S"les Data. The timing for your Settlement
payments is described in the Oper,lting Regulations unless otherwise indicated by us in writing.
If the timing for Settlement payments in our written notice to you. including, without
limiration, Exhibit ß, conflicts with the Operating Regulations, our written notice to you shall
govern. We may, at our discretion, change the timing of your Settlement payments upon five
(5) calendar days' advance written notice. We will consider factors such as your financial
condition, dIspute history or busmess conduct and practiccs in making this decision. Your
tCtmlllals or I",int-of-sale devices must be programmed with the Merchant Account number
that we asSIgn to vou if you are to receive payment for Card sales. You are responsible for the
programming of your terminals to accept Card sales. If a thlfd party programs your terminals,
you are responsible for such party's actions and omissions in connection therewith, including,
without limitation. any payment of your Settlement amounts to the incorrect party. Promptly
followmg the completion of programming services, you agree to confirm the receipt in your
Setrlement Account, as defined in the Operating Regulations, of Settlement amounts for Card
sales accepted by vou. If vou do not receive Settlement amounts for Card sales in accordance
wIth the Agreement and Operating Regulations, you must contaer us immediately or risk
non-payment for such Card sales. You must comply with each of the terms and conditions in
tIllS Agreement and in the Operating Regulations before you will receive a Settlement payment
for a Card sale. Consult the Operating Regulations for other important Settlement terms and
conditions.
9. Merchant Fee ond Other Fees. In consideration for your participation in the Card program,
you agree to pay fees to us m the amounts indICated by us in writing, including in Exhibit B, as
evidenced by our records and the periodic reports, if any, we produce for your Merchant
Account. The kes papble by you consist of some or all of the following' (a) a percentage of
the Cud ",ies 'Iccepted by you or a fee for each Card sale (m each case, "Discount"). If a
percentage applies, it will be multiplied by either ,",ct Card Sales or Gross Card Sales, as defined
m the Operating Regulations. If a fee for each Card sale ("Per Card Sale Fee") applies, it will
he multiplied by the totalnnmher of your Card sales, as defined in the Operating Regulations;
(b) :1 Per Transaerion Fee, as defined m the Operating Regulations; (c) Submission Error Fees,
as defined in the Operating Regulations; (d) fees for services that you elect to receive from us,
,md (e! other fees pay-able by vou as mdlCated in our records, including, without limitation,
See Reverse Side For Continuation Of This Agreement
apphcltion and set-up charges. The fees described in (a) and (b) are collectively referred to as
the "Merchant Fcc". If you are a new Merchant, Exhibit B will indicate whether the amount
of the Discount "Hies depending on the Card product (e.g. credit, stored value, commercial,
dehn). If you are an existing Merchant, we will notify you in writing if the amount of
the Discount varies depending on the Card product. If the Discount that you owe in any
calcubtion period is less rhan the minimum Discount indicated hy us in writing, including in
Exhil,n B ("Minimum Discount"), you agree to pay an additional amount equal to the
MinllTuun DIScount bs vour actual Discount. If the Discount that you owe in any calculation
period IS greater tlW1 the maximum Discount identified hy us in wming, including
m Exhihlt B (" \Llximum Discounr'/, you sh,lll only be ohligated to pay the Maximum
Discount. The OperHing ReguL1tions more fully explain how the Merchant he, SubmissIOn
Error Fees and other fees .He calculated by us and paid bl' you.
10. Billing Inquiries. You agree to follow the procedures set forth in the Operating Regulations
with ITspect [() the notices of Card member disputes and billing inquiries that you receive from us.
11. Chargeback Rights. Under certain circumstances, we may return a Card selle to you unpaid,
or we may return a previously paid Card sale to you for repayment to us, These returned
charges ,He callcd "Chargebacks"'. If you do not follow all the terms of the Agreement and
the Operatmg Regulations when making a transaction with a Card. or if a Card sale which
is the subject of a hdling dispure or quahty dispute is suhject to Chargeback as specified
m the Agreement or Operating Regulations, we may refuse to pay you for the Card sale or the
cbsputed portion of it. Refer to the Operating Regulations for complete terms and conditions
with respect to Chargeh;¡sks.
12. Retention of Records. You agree to keep an original copy of all Sales Data, mail/telephone
order forms. the doulmentation required in the Operating Regulations and Other rclated
document(s). e.g. shipping invoices, for no less than three hundred and sixty five
(365) (bys from the Card transaction datc, or one hundred and eighty (I HO) days from the date
of suhmisslon of Sales ]),Ha, whichever is later. You also agree to keep microfilm or other copies
of Sales Dam for no less than three (3) years from the date of the Card transaction. You agree
to pI"" ide us with a copv of any Sales Data, mail/telephone order forms and the document,ltion
reqUlred io the Operatmg Regulations, within twenty-two (22) calendar days of our request.
13. Assignment. You may not assign or transfer this Agreement to any other party without our
prior \\Tltten approval. If you sell all or a substantial part of your business or materially change
the nature of your business, or by any means cause or permir a new entity [() own a substantial
part of your business, you agree to notify us in advance and we may offset any amounts we owe
you ;¡gainst any outstanding obligations you have to us, or, at our option, terminate this
Agreement as described in Section 15. We may assign this Agreement and our rights and
obligations under it, in whole or in part, to any company. We will notify you of any such
assignment, This Agreement will be hinding upon and inure to the bcnefit of the parties and
their respective successors and assigns. You agree not to pledge, transfer or otherwise impair any
"f our rlghrs under this Agreement.
14. Changing This Agreement. We may change this Agreement at ,my time by giving you
written notice at least thirty (30) days 111 advance of the change. You agree that your authorIZed
representative will receIVe and review any notices that you receive with your periodic reports.
If vou do not accept a change to the Agreement, you may terminate thIS Agreement by
notifying us within that rhirty (30) day period. If you make any Card salcs after the effective
date of the change 111 terms, this means that you have consented to the new terms.
15. Term and Termination. This Agreement will become effective upon your acceptance of the
terms of thIS Agreement through the conduct descrihed in the second introductory paragraph of
this Agreement. We are nnt hound by any changes that you propose to this Agreement unless
our home office provides you with written approval of such changes. If you propose changes to
tl1IS Agreement and accept Card sales hefore you receive written approval of such changes from
us, you 'Igree that such Clrd sales shall be governed by the terms of this Agreement withour any
of the proposed changes, Any changes to the Agreement proposed hy you and agrced upon hy
us nl writing shall apply to all Card sales accepted by you on and aftcr the date of execution of
the document describing the changes to the Agreement. This Agreement remains in fIlII force
and effect until terminated as provided in this Section 15. You may terminate this Agreement at
any tlnlC hy gIVing us written norice sent certified mail to the address specified in the Operating
Regulations. We may terminate this Agreement at any time by giving vou thirty 130) days' prior
written notice. We may terminate this Agreement without such notice if you have materially
hre'lChed this Agreement or if, in our sole discretion, Card sales made by vour establishment
,Ire irreguLl1, the Clrd sales conducted hy you, the goods or services sold by you or your
bUSIne" pr,lctlCes viohte ,my U.S. federal, state or local law, statute or regulation (e.g. aiding,
facllitaring or offering Internet gambling services; establishll1g quasi-cash, credits or monetary
value ot am type that mav be used for Internet gambling; the sale of counterfeit merchandise;
the sale of alcohol, tohacc't1 or fltearms to mmors: or any Other illegal purpose), the goods or
scr"ces sold by you or the type of business operated bv you are not eligible for
Card acceptance as described in the Opemtiug Regulations or otherwise create excessive risk,
you l1,l\C had, or may h'lve, an unusual or inappropriate number of Cardmemher inqulfies,
credit requests or Ch.Hgebacks during a relevant period, there arc securitv concerns regarding
Card sales bl any ot your establishments, or your financial condition or other conditions
warrant earlier termination. You agree to accept Cards and follow the terms of tillS Agreement
until the [ernunation is effective. The terms in this Agreement and in Exhibits A ,lIld II
governlllg the acceptance of Cards, transmission and processing of Sales Data and
m'l1lltelephonc order forms and Settlement will continuc to apply even after the termination
ot tillS AgI'<:emcnt, until all Card transactions made prior to such termination are settled
or resolved. Upon termination of this Agreement, you agree to immediately send us all
Sales D.lta. mail/telephone order forms and the documentation required in Section 4(h) not
previously submitted to us for any Card sales made up to the date of termination. We are not
liable tn you for any direct or consequential damages that you may suffer as a result of our
terllllnatlon of this Agreement.
16. Reserve Account. At the termillation, or during the term, of this Agreement, we may reqnire
you to maintain with us, or at a financial institution designated hy us, money as cash
collateral in reserve in an amount necessary to cover fees, Chargebacks and Cardmemher
disputes which rebte to pending Cud transactions. You agree to pay us the amount of the
reserve balance promptly on demand, or, at our option, and nor necessarily in the following
order, we may debit the Settlement Account, suspend Settlement without prior notice. or
withhold Settlement amounts otherwise payable to vou, in order to fund the required reserve.
You agree to promptly execute any additional documents that arc required hv us III connection
with the establishment and maintenance of the reserve. We will release some or all of the funds
held in reserve after the last to occur of, 210 days after the effective date uf ternunation of the
Agreement III the event of termination or 210 days after you cure the event giving rise to the
creation of the reserve during the renn of the Agreement or when we nOtify you that we are
willing to release some or all of the funds. You agree not to withdraw, transfer, pledge or
otherwISe impair any of our rights or interests in the reserve during the period that it is held for
our benefit and we will provide you with an accounting of anv money taken out of the reserve
account. We may require you to establish a reserve account during the term of this Agreement
through one of the methods deserihed ahove if there arc excessive disputes or Chargebacks
relating to Card sales by your establishment or if. in our discretion, we believe that your
financial position warrants such an account. If you do not agree to establish a reserve ,lccOUnt
upon our requcst, we may terminate this Agreement immedutely.
17. Finonciol and Credit Information. If we request it, you agree tn provide us with financial
information, including without limitation. financial statements, concernmg vou and/or your
establishment"s financial condition and general creditworthincss and you and/or your
establlShment"s ability to perform your obligations under this Agreement. You agree to
immcdiatcly send us wntten notice if you become insolvent or cease to operate your business,
or If you or any creditor files for your bankruptcy or reorganization. In consideration of your
application for a Merchant Account and our agreement to review vour application, you and
each of your owners agree th,n we and any of our affiliates or agents may ohtain, verify and
exchange with others, business and personal fmancial and/or credit information on you, anv ot
your owners and your affiliates, subsidiaries and related companies.
lB. Indemnification. You agree to indemnify and hold harmless us, our subSIdiaries, affiliates
and divisions who arc engaged in the Card program, and eac,h such companv's respectIVe
officers, directors and employees, from and against all costs, damages, claims or complaints
brougbt against any such companv arising from any of the following' (a) your failure to
perform vour obligations in this Agreement and the Operating Regulations, including, without
limitation, any costs, damages, claims or complaints arising in connection with goods or
services purchased with a Card or check issued in connection with a Card Account; or (h) vour
wrongful acts and omissions in connection with each Cud rransaction. We agree to indemnify
and hold harmless you, your subsidiaries, affiliates and divisions who accept Cards, and each
such company's respective officers, directors and employees, for all costs, damages, claims
or complal11ts ansing from our wrongful acts and omissions in connection with your acceptance
of Cards. The terms of this Section 18 will survive termination of this Agreement.
19. Factaring. You agree that you will not factor any Card sales. See the Operating Regulations
for complete details regarding what constitutes factoring and the liability you incur if you
factor anv Card sale.
20. Type of Business. You understand that we have considered your application for a Merchant
Account and proposed the terms of this Agreement based upon the information you provided
m your appllGltIon, includl11g rhe types and kinds of husiness you listed in your application.
The Operating Regul.nions specify what you must do, the notice you must provide, and what
may happen if you change the type or kmd of busl11ess in which you engage.
21. Performonce of Duties. Neither party shall be liablc for its failure to perform under this
Agreement if such failure arises out of causes beyond the control and without the fault or
negligence of such party. Such causes Olav include but are not limited to, acts of Cod, fire, wars,
or strikes.
22. Enforcement of our Rights. If you hreach this Agreement, you agree to reimburse us for our
costs and expenses, including reasonahle attorney's fees that we incur in enforcmg our nghts
under this Agreement.
23. Governing Law. This Agreement IS governed hy the laws of the Stare of Delaware. If any
part of this Agreement IS not enforceable, the remaining provisions still remain valid and
enforceable. We have not waived anv of our rights under this Agreement unless we agree
to do so in writing. Each party agrees to comply with all applicable laws and regulations in
connection with the Card program and rhis Agreement.
24. Notices. You agree that you will send any notice to us that is required by this Agreement or
by the Operating Regulations to the address specified in the Operating Regulations, We agree
that we will send ,my notice to you that is required by this Agreement or the Operating
Regulations to your address as specified in our records. If our records mdicate that vour address
for notices is the same as your address for penodic reports, we may send notice of changes
to the Agreement with your periodic repurts.
25. Coptions. The captions used in this Agreement arc for reference only and will not he
interpretcd to limit or define tbe text of this Agreement.
33722 Revised 10/04