Merchant Operating Regulations
DlsceVER.
May 16, 2003
BUSINESS SERVICES
Dear Merchant:
I would like to describe some changes to the Discover4l' Card acceptance program, the
Government Entity/Utility Merchant Services Agreement ("Agreement") and the Operating
Regulations that govern your acceptance of Discover Cards. These changes are effective
for the Discover Card transactions accepted by you on and after July 1, 2003.
Enclosed are revisions to your Agreement and your new Operating Regulations that
replaces all prior versions of these documents. Also enclosed is a summary of certain key
changes to the Operating Regulations. Please read these documents carefully and retain
them and this letter for future reference.
The Agreement and Operating Regulations provide terms governing your acceptance and
submission of Discover Card transactions. Because submission of inaccurate, incomplete
or late data increases our processing costs and fraud risk, we will charge fees for certain
transactions that do not comply with the Agreement and Operating Regulations
("submission errors"). We believe that limiting these fees to Merchants who submit a non-
compliant transaction is more equitable than charging all Merchants for these added
expenses.
The types of submission errors for which fees will be charged and the amounts of such fees
are listed on the reverse side of this notice. These fees will take effect on July 1, 2003.
Please refer to the reverse side of this notice for more detailed information.
If you receive daily or monthly activity reports, the last report of the month will indicate the
type of each submission error, if any, that applies to you, the amount of the fee for each
such error, the number of submission errors and the total amount of submission error fees.
However, if you receive daily or monthly summary reports, these reports will indicate only
the total amount of submission error fees on the last day of the month.
Your business is important to us, and we look forward to continuing our relationship with
you.
Sincerely,
~~J~
Tom E. Dailey
Senior Vice President
SE-8
ChanQes to Government Entity/Utility Merchant Services AQreement.
Section 8 of the Agreement is revised by striking the first sentence thereof and replacing it with the following
provision:
"In consideration for your participation in the Card program, you agree to pay fees to us in the
amounts indicated by us in writing, as evidenced by our records and the periodic reports, if any, that we
produce for your Merchant account. The fees payable by you consist of some or all of the following, each of
which is defined in the Operating Regulations: (a) a percentage of the Card sales accepted by you (either
Net Sales or Gross Sales) (b) a Per Transaction Fee; (c) Submission Error Fees; (d) fees for services that
you elect to receive from us, and (e) other fees payable by you as indicated in our records, including, without
limitation, application and set-up charges. The fees described in (a) and (b) are collectively referred to as the
"Merchant Fee". We will notify you in writing if the amount of the Merchant Fee varies depending on the type
of Card product involved in the Card sale. If Merchant Fees that you owe in any calendar month are less
than the minimum fee indicated by us in writing ("Minimum Fee"), you agree to pay an additional amount
equal to the Minimum Fee less your calculated Merchant Fee. The Operating Regulations fully explain how
the Merchant Fee, Submission Error Fees and other fees are calculated by us and payable by you."
Submission Errors
Fee Per Error
Effective Date
Voice Authorization or AVS from a Merchant Services Agent.
("Voice Usage")
- See Sections 4.4.4 and 4.4.10 of the Operating Regulations
$0.50
July 1, 2003
Late Submission of Sales Data ("Stale Transaction").
- See Section 7.1 of the Operating Regulations
$0.50
July 1 , 2003
Outline of Additional ChanQes to OperatinQ ReQulations
· Some new Cards display the features described in Section 2.2 of the Operating Regulations.
· New procedures apply to your acceptance and submission of Discover Card sales. If you accept
Cards as payment for installment sales, your authorization requests for these transactions must be
transmitted using the ISO 8583 authorization format described in Section 5.3.1 of the Operating
Regulations or we may Chargeback these transactions to you.
· If you accept Card sales for delayed delivery, Card sales are subject to Chargeback to you for ninety
days after your final delivery of goods or services, as set forth in Section 8.2 of the Operating
Regulations. After this period, we may request documentation on the Card sale and may process an
adjustment to you if you do not respond or provide sufficient documentation.
· If you accept Card transactions over the Internet, please review your acceptance, website and data
security procedures to ensure that you comply with Section 12 of the Operating Regulations. In
addition, please review our tips for fraud prevention in Section 10.2.
· We may charge you a minimum Merchant Fee as described in Section 9.2.5 of the Operating Regulations.
· New Card acceptance procedures for merchants in the lodging and petroleum industries are described in
Sections 6.2 and 6.3 of the Operating Regulations.
· Finally, Section 13 of the Agreement permits us to assign our rights under the Agreement to third parties.
· Please review the periodic reports that you receive by mail for additional information regarding any
changes to the Card acceptance program.
e
Discover Business Services
MERCHANT OPERATING REGULATIONS
e
These Operating Regulations
are incorporated into the
Merchant Services Agreement
as Exhibit A and contain
procedures which you must
follow in connection with the
acceptance of Discover@ Cards.
~
e
DlsceVER.
BUSINESS SERVICES
MERCHANT SERVICES CENTER
1-800-347-2000
AUTHORIZATION CENTER (24 HOURS, 7 DAYS)
1-800-347-1111
ADDRESS VERIFICATION (24 HOURS, 7 DAYS)
1-800-347-7988
SI REQUlERE MAS ASISTENCIA (EN ESPANOL)
MERCHANT SERVICES (SPANISH)
1-800-347-7009
To REQUEST SUPPLIES
1-800-347-2000 OR VISIT OUR WEB SITE AT www.discoverbiz.com
MERCHANT SECURITY DEPARTMENT
1-800-347-3083
To ACCEPT CARD SALES VIA THE INTERNET
1-800-347-2000
e
TABLE OF CONTENTS
1.0 INTRODUCTION TO DISCOVER BUSINESS SERVICES .............................................. 1
1.1 Discover Business Services: Introduction ............................................................ 1
1.2 What Discover Business Services Means to You. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Agreement and Operating Regulations ............................................................. 1
1.4 Defined Terms ............................................................................... 1
1.5 Merchant Number ............................................................................ 1
1.6 Use of Third Parties ........................................................................... 1
1.6.1 Use of Processors ........................................................................ 1
1.6.2 Use of Settlement Processors ................................................................ 1
1.6.3 Use of Terminal Programmers or Terminal Service Providers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.0 IDENTIFYING VALID CARDS ......................................................... 2
2.1 Identifying Cards ............................................................................. 2
2.2 Card Security Features ......................................................................... 2
2.2.1 Standard Cards-Security Features ........................................................... 2
2.2.2 Discover 2GOSM Card-Security Features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2.3 General Purpose Discover@ Gift (Stored Value) Card-Security Features ................................ 3
3.0 DISCOVER@ CARD TRANSACTIONS-GENERAL REQUIREMENTS ....................................... 3
3.1 Surcharges .................................................................................. 3
3.2 Test Cards .................................................................................. 3
3.3 Cash Advances and Cash Equivalents .............................................................. 3
3.4 Discover Checks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.5 Employee Purchases ........................................................................... 4
3.6 Minimum/Maximum Dollar Limits and Other Limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Equal Treatment of Card Sales versus Other Cards ....................................................4
4.0 ACCEPTANCE OF CARD TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 Card Acceptance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1.1 Card Expiration Date ..................................................................... 4
4.1.2 Signature on Card. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.1.2.1 Unsigned Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.1.3 Obtain Authorization ..................................................................... 4
4.1.4 Prepare and Transmit Sales Data ............................................................. 4
4.2 Preparing Sales Data Documenting Card Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2.2 Electronic Data Capture ................................................................... 4
4.2.3 Paper Sales Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2.3.1 Sales Data Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2.3.2 Delayed Delivery Sales .............................................................. 5
4.2.3.3 Card Not Present .................................................................. 5
4.2.3.4 Preparing the Merchant Settlement Batch Transmittal for Sales not Submitted by
Electronic Means .................................................................. 6
4.3 Credits for Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3.1 Preparing the Credit Slip for Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Obtaining Authorization Decisions ................................................................ 6
4.4.1 Data Transmission Requirements for Authorization Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4.1.1 CW Data Requirements ............................................................ 7
4.4.1.2 CID Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4.2 Cardmember Verification and Card Retrieval ................................................... 7
4.4.3 Down-Time Authorization Procedures for Electronic Terminals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4.4 Telephone ("Voice") Authorization Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4.5 Declined Authorization Procedures .......................................................... 7
4.4.6 Obtaining Authorization for Recurring Billing Sales Transactions .................................... 7
4.4.7 Request for Cancellation or Change of Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
4.4.8 Authorization Floor Limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
4.4.9 Down-Time Authorization Procedures ........................................................ 8
4.4.10 Address Verification Service ("AVS") ......................................................... 8
4.4.11 Special Procedures for Merchants with Customer Activated Terminals ("CAT Terminals") . . . . . . . . . . . . . . . . .. 8
4.5 Code 10: Suspicious Situations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
4.6 Arrests for Fraudulent Card Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
e
e
Discover Business Services Merchant Operating Regulations - Revised 09/02
TABLE OF CONTENTS
5.0 CARD NOT PRESENT SALES ........................................................ 9
5.1 Mail and Telephone Order Card Sales ............................................................. 9
5.1.1 Obtaining Authorization .................................................................. 9
5.1.2 Address Verification Requirements ........................................................... 9
5.1.3 Documentation of Card Sales ........................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1.4 Transmission of Sales Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1.5 Delivery Requirements .................................................................... 9
5.2 Card Sales over the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9
5.2.1 Protocol for Internet Card Transactions ....................................................... 9
5.2.2 Browser Support for Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.2.3 Authorization and Submission Requirements
5.2.4 Data Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.2.5 Chargeback for Noncompliance .............................................................10
5.3 Recurring, Installment or Other Periodic Billing Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.3.1 Requirements-Overview.................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.3.2 Cardmember's Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.3.3 Complete Sales Data .................................................................... .11
6.0 SPECIAL CIRCUMSTANCES ........................................................ .11
6.1 Card Acceptance during Store Closings or Liquidation .................................................11
6.2 Policies for Merchants in the Lodging Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
6.2.1 Overview............................................................................. .11
6.2.2 Requirements for Guaranteed Reservations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
6.2.2.1 Notice to Cardmember of Rights and Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
6.2.2.2 Record of Guaranteed Reservations ................................................... .11
6.2.2.3 Written Confirmation of Guaranteed Reservations .........................................11
6.2.2.4 Cancellation of Guaranteed Reservations ................................................12
6.2.2.5 Sales Data for "No-Show" Charges ................................................... .12
6.2.3 Advance Deposit ....................................................................... .12
6.2.3.1 Obligations with Advance Deposits ....................................................12
6.2.3.2 Sales Data Requirements for Advance Deposits/Folio ...................................... .12
6.2.3.3 Written Confirmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
6.2.3.4 Cancellation of Reservations with Advance Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.2.3.5 Sales Data Required for Cancellation of Reservations with Advance Deposits .....................13
6.2.4 Overbookings ......................................................................... .13
6.2.5 Priority Check-out Service .................................................................13
6.2.6 Estimated Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.2.6.1 Check-in Estimate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.2.7 Changes to Estimated Charges ..............................................................13
6.3 Merchants with Customer Activated Terminals ("CAT Terminals") ....................... . . . . . . . . . . . . . . . . .14
6.3.1 .................................................................................... .14
6.3.2 .................................................................................... .14
6.3.3 .................................................................................... .14
7.0 PROCESSING AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7.1 Transmission of Sales Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7.1.1 Submitting Electronic Sales Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7.1.2 Submitting Paper Sales Drafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7.2 Settlement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7.2.1 Settlement Adjustments .................................................................. .14
7.2.2 Settlement Initiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
7.2.3 Settlement Account ..................................................................... .15
7.2.3.1 Changing the Settlement Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
7.2.4 Responsibility of Merchant for Settlement Verification and Statement Review. . . . . . . . . . . . . . . . . . . . . . . . . . . .15
7.2.5 Suspension of Settlement ................................................................. .16
7.3 Payments from Cardmembers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
7.4 Periodic Reports ............................................................................ .16
8.0 TICKET RETRIEVALS AND CHARGEBACKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
8.1 Ticket Retrievals ............................................................................ .16
8.2 Charge backs ............................................................................... .17
8.2.1 Excessive Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Discover Business Services Merchant Operating Regulations - Revised 09/02
e
e
e
TABLE OF CONTENTS
8.2.2 Immediate Chargebacks .................................................................. .17
8.2.3 Pending Chargebacks .................................................................... .17
8.3 Reversal of Chargebacks ...................................................................... .18
8.4 Charge back of Card Not Present Sales ............................................................ .18
9.0 MERCHANT FEE AND OTHER FEES .................................................... .19
9.1 Merchant Fee and Other Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
9.2 Calculating Your Merchant Fee ................................................................. .19
9.2.1 Calculating the Percentage Portion of Your Merchant Fee ......................................... .19
9.2.2 Calculating Your Per Transaction Fees ....................................................... .19
9.2.3 Different Calculation Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
9.2.4 Variable Merchant Fees .................................................................. .19
9.2.5 Minimum Fee ......................................................................... .19
9.3 Submission Error Fees ........................................................................ .19
9.4 Collecting Your Fees ......................................................................... .20
9.5 Other Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
10.0 FRAUD PREVENTION ........................................................... .20
10.1 Recovery of Lost or Stolen Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
10.2 Reminders for Preventing Fraudulent Card Usage ................................................... .20
10.3 Factoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
10.4 Type of Business ........................................................................... .21
10.4.1 Changes in Business ................................................................... .21
10.4.2 Failure to Notify ..................................................................... .21
10.4.3 Ineligible Merchant Categories ........................................................... .21
11.0 MERCHANT SUPPORT .......................................................... .21
11.1 Merchant Assistance ........................................................................ .21
11.2 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
11.3 Online Services ............................................................................ .22
11.3.1 .................................................................................. .22
11.4 Notices .................................................................................. .22
11.5 Call Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
12.0 CONFIDENTIALITY AND DATA SECURITY ...................................................22
12.1 Definition of Confidential Information ........................................................... .22
12.1.1 .................................................................................. .22
12.1.1.1 ........................................................................... .22
12.1.1.2 ........................................................................... .22
12.1.1.3 ........................................................................... .22
12.1.2 .................................................................................. .22
12.1.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
12.1.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
12.1.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2 Restrictions on Disclosure of Confidential Information ............................................... .23
12.2.1 Your Obligations ..................................................................... .23
12.2.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2.1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2.1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2.1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.2.1.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.3 Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.4 Nondisclosure of Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.5 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.6 Data Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
12.7 Storage of CID Numbers ..................................................................... .24
13.0 ADVERTISING AND PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
13.1 Limited Permission to Use Service Marks ......................................................... .24
13.2 Prior Approval Required for Use of Service Marks .................................................. .24
13.3 Display of Materials ........................................................................ .24
13.4 Prior Consent for Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
14.0 FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
iii Discover Business Services Merchant Operating Regulations - Revised 09/02
This page intentionally
left blank
1.1
1.0 INTRODUCTION TO DISCOVER BUSINESS SERVICES
Discover Business Services: Introduction
Discover Business Services is the name used by Discover Financial Services, Inc. to operate the Discover@/N~VUS@
Network. Discover Business Services provides network support and services to Merchants who accept Discover Card
transactions. Discover Business Services ~s one of the largest financial servic~roviders in the world bringing extensive
resources and expertise to the Discover Card plan and providing Discover Merchants with a streamlined system of
authorization, processing and settlement for Card transactions.
1.2 What Discover Business Services Means to You
Discover Business Services offers you many benefits. The Discover@ Cardmember base consists of consumers who are active
purchasers, high spenders and active credit users. Discover Business Services is committed to delivering network services
with the best possible value to you, including:
· Competitive Merchant Fees
· Professionally staffed Merchant Services Centers
· Local representatives
. A streamlined system for settlement, with a variety of options for transmission of funds and associated reports
· Authorization centers with 24-hour service, 7 days a week
· An equitable Charge back policy
. Discoverbiz.com - our Internet site providing you with tools to help run your business more efficiently and effectively
1.3 Agreement and Operating Regulations
These Operating Regulations are referred to as Exhibit A in the Agreement between you and us. These Operating
Regulations provide information on operational aspects of the Discover Merchant relationship supported by us. Please make
sure that all of your employees are familiar with the procedures in the Agreement and these Operating Regulations for
identifying Cards, obtaining authorization decisions and handling Card sales and return transactions. If you have any
questions, contact our Merchant Services Center at 1-800-347-2000.
After we approve your application for a Merchant account, we may send you a Disclosure Letter that identifies certain
important terms of your Agreement. The Agreement, these Operating Regulations and, if applicable, the Disclosure Letter,
collectively provide the terms and conditions governing your acceptance of Discover Cards. In the event of a conflict
between the terms of these Operating Regulations and the Disclosure Letter, the Disclosure Letter shall govern.
Defined Terms
Terms used in these Operating Regulations shall have the meanings given to such terms in your Agreement, unless otherwise
defined herein. The following definitions supplement and amend the definitions in the Agreement: "Card" means (i) a valid
credit, charge or other card or device bearing a Discover Card or Novus logo, service mark or trademark identified in these
Operating Regulations or as otherwise approved in writing by us; or (ii) the Card Account if the Cardmember is not present
at a physical location. "Card Account" means the account represented by the unique sixteen digit account number assigned
by the issuer which the Cardmember may use as permitted by the issuer.
Merchant Number
We may assign one or more unique merchant numbers to you in connection with your Discover Merchant account
("Merchant number"). We may assign Merchant numbers to you that must be used for certain types of Card transactions.
You must use the appropriate number assigned by us for all Card transactions. Merchant numbers are confidential
information under the Agreement and remain our property. You may not assign them to any related or unrelated third
parties and you may not allow a third party to use them without our written approval.
1.6 Use of Third Parties
e
1.4
e
1.5
e
1.6.1
1.6.2
1.6.3
Use of Processors
Your use of any third party processor for Card transactions is subject to our approval, which we will not
unreasonably withhold. You are liable for the actions of, and all charges imposed by, any processor that you use
to perform your obligations under the Agreement or these Operating Regulations. If at any time during the term
of the Agreement you elect to begin utilizing a processor, or to change from an existing processor to a different
processor to perform your obligations under the Agreement, you must notify us of the change. Also, if such
processor assesses or increases transaction fees to us, we may, at our option, adjust your Merchant Fee an
appropriate amount to compensate us for our expense, or invoice you directly for the total amount of such
transaction fees.
Use of Settlement Processors
If you designate a third party processor to receive Settlement for Card transactions on your behalf, we shall have
completed all Settlement obligations to you, including the obligation to pay Settlement, the timing of Settlement
payment, any reporting and notices, when we have properly initiated Settlement to the processor in accordance
with these Operating Regulations. Your use of a processor to receive Settlement for Card transactions may result
in the payment of amounts other than as specified in these Operating Regulations and we are not liable for any
delinquency or non-receipt of Settlement amounts.
Use of Terminal Programmers or Terminal Service Providers
If you use a third party to program your terminal or point-of-sale ("POS") device to accept Card transactions or
to provide any other services on your terminal or POS device, you are responsible for the actions and omissions
of said third party in connection therewith. We are not responsible for the recovery of amounts paid to third parties
if we act in accordance with the Settlement payment directions programmed on your terminal or POS device.
Discover Business Services Merchant Operating Regulations - Revised 09/02
2.0 IDENTIFYING VALID CARDS
2.1 Identifying Cards
All valid Cards begin with the prefix" 60 11" and display one of the following logos, services marks or trademarks.
2.2 Card Security Features
You must verify that each card presented to you is a valid Card prior to initiating a transaction. You may verify the validity
of a card by examining it to confirm that it includes the features described in this Section 2.2. Please be sure that you and
your employees are familiar with the features of valid Cards. If we determine that a card involved in a Card transaction
does not display one or more of the features of a valid Card, we may Chargeback the Card transaction to you.
Note: Pictures in this section highlight the standard security features on Cards, but may not represent the actual size of all
such features on all Card types.
2.2.1 Standard Cards - Security Features
A. Distinctive Discover Card logo.
B. The word DISCOVER will appear in ultraviolet ink on the front of the Card when it is held under an ultraviolet light.
C. The Discover hologram has distinct images:
1) Sphere
2) Water
3) Stars
D. The embossed Cardmember name.
E. Account numbers on Cards are made up of four groups of four digits totaling 16 numbers and always start with
6011. The embossed numbers should be clear and uniform in size and spacing and should extend into the hologram.
F. The expiration date appears in a MMfYY format after the words "valid thru" and indicates the last month in
which the card is valid.
G. The special embossed n or D appears on the same line as "Member Since" and "Valid Thru."
H. The magnetic stripe.
1. The signature panel must be signed by the Cardmember or authorized user in order to validate the Card. The
account number on the signature panel should match the number embossed on the front of the Card and
appears here in reverse indent printing. On all Cards, the Card Account number is followed by the three-digit
Card Identification Data (the "CID").
J. Depending on the issue date of the card, you will see an overprint pattern on the signature panel that either
reads NOVUS or the name of the card, i.e., Discover, Discover Platinum, etc., and an underprint of "void."
K. The Discover/NOVUS or green NOVUS mark appears on the back of the card.
2.2.2 Discover 2GOSM Card - Security Features
The Discover 2GOSM Card is issued to Cardmembers as a second, convenient version of their standard Card. It
has an innovative shape and carrying case that can be carried on a key chain or as a money clip. You can
electronically swipe the magnetic stripe while the Card is either inside or outside of the carrying case. If you are
required to submit an imprint of the Discover 2GO Card for submission and you cannot obtain an imprint of this
card, you should ask for the standard Card.
A. Distinctive Discover 2GO Card logo.
2 Discover Business Services Merchant Operating Regulations - Revised 09/02
e
B. The word DISCOVER will appear in ultraviolet ink on the front of the Discover 2GO Card when it is held
under an ultraviolet light.
C. The Discover hologram, located above the Discover 2GO Card number, has a distinct circular shape and
Images:
1) Sphere
2) Water
3) Stars
D. The embossed Cardmember name.
E. Account numbers on Discover 2GO Cards are made up of four groups of four digits totaling 16 numbers and
always start with 6011. The embossed numbers should be clear and uniform in size and spacing.
F. The expiration date appears in a MMlYY format and indicates the last month in which the card is valid.
G. The special embossed D appears on the front of the Discover 2GO Card.
H. The magnetic stripe.
1. The last four digits of the Card Account number are printed on the back of the Card. The abbreviated Card
Account number is followed by the three-digit Card Identification Data (the "CID").
J. You will see an overprint pattern on the signature panel that reads DISCOVER 2GO. An underprint of "void"
will appear on the signature panel if it is altered.
K. The Discover/NOVUS mark appears on the back of the card.
e
2.2.3 General Purpose Discover@ Gift (Stored Value) Card - Security Features
The features described below are found on general purpose stored value Cards ("Gift Cards"). However, the
placement of these features may vary.
A. Account numbers are made up of four groups of four digits totaling 16 numbers and always start with 6011.
The embossed numbers should be clear and uniform in size and spacing.
B. The embossed expiration date appears in a MM/YY format and indicates the last month in which the card is valid.
C. The magnetic stripe.
D. The Card Account number on the back of the Card is followed by the three-digit Card Identification Data (the "CID").
E. The front of the Card may display either: "Not Valid for more than $500.00" or a fixed denomination on the
card ($25.00, $50.00, etc.).
F. The Discover/NOVUS acceptance mark appears on the back of the Card.
G. The back of the Card will contain a signature panel. The signature panel must be signed by the Cardmember
or authorized user in order to validate the Card. Note: Some valid Gift Cards may not contain a signature panel.
3.0 DlSCOVER@ CARD TRANSACTIONS - GENERAL REOUIREMENTS
3.1 Surcharges
Unless otherwise agreed upon by us in writing, you may not impose any surcharge, levy or fee of any kind for any
transaction where a Cardmember desires to use a Card for any purchase of goods or services.
3.2
Test Cards
If we have issued you a test Card or test account in order to test Card acceptance at your locations, you are liable for any
improper or fraudulent use of such Card or Card Account by any of your employees. You agree to use reasonable efforts
to safeguard such Card or Card Account in a secure place.
Cash Advances and Cash Equivalents
You may not accept a Card in exchange for advancing cash or cash equivalents (i.e. value on the Internet for e-commerce
transactions) to a Cardmember, unless you have executed a separate agreement with us. If you dispense cash or cash
equivalents in connection with the presentation of a Card without our permission in the form of a written agreement, such
e
3.3
Discover Business Services Merchant Operating Regulations - Revised 09/02
3
a Card transaction is subject to Charge back to you as described in Section 8.2, regardless of whether your agreement with
the Cardmember describes a cash advance or cash equivalent as a sale of goods or services.
3.4 Discover Checks
You may accept Card checks which have been issued to Cardmembers. You should handle these like any other check.
Questions should be addressed to your provider of services for processing checks or your bank.
3.5 Employee Purchases
Your owners, officers or employees may not conduct cash advances, sales or returns for goods or services with you using
any personal Card, except for bona fide purchases in the ordinary course of business. You are responsible for the actions
and omissions of your employees and agents in connection with your acceptance of Cards and your obligations under the
Agreement and these Operating Regulations.
3.6 Minimum/Maximum Dollar Limits and Other Limits
You may not require that any Cardmember make a minimum dollar purchase in order to use a Card and, other than when
we have not authorized a Cardmember's transaction, you may not limit the maximum amount that a Cardmember may
spend when using a Card.
3.7 Equal Treatment of Card Sales versus Other Cards
You may not institute or adopt any practice that discriminates or provides unequal treatment for users of a Card versus any
other card products that you accept.
4.0 ACCEPTANCE OF CARD TRANSACTIONS
4.1 Card Acceptance Requirements
You must perform each of the following functions for each Card sale that you accept.
4.1.1 Card Expiration Date
Check the expiration date on the Card. The Card is valid through the last day of the month embossed on the Card.
If the Card has expired, you cannot accept it for a transaction unless explicitly permitted by us in writing in an
amendment to these Operating Regulations that is recorded in our records. If a Card presented to you has an
expired date, please call our Authorization Center at 1-800-347-1111.
4.1.2 Signature on Card
Verify that there is a signature on the signature line on the back of the Card and that the name on the back of the
Card matches the name embossed on the front of the Card.
4.2
Unsigned Cards
If a Card presented to you is not signed, request two pieces of identification, one of which is a
government-issued picture identification. When you have confirmed that the person presenting the
Card is the Cardmember, have the Cardmember sign the back of the Card.
4.1.3 Obtain Authorization
Obtain an authorization decision for the Card sale as described in Section 4.4.
4.1.2.1
4.1.4 Prepare and Transmit Sales Data
Prepare Sales Data documenting the Card sale as described in Section 4.2 and transmit Sales Data to us as
described in Section 7.1 of these Operating Regulations.
Preparing Sales Data Documenting Card Sales
4.2.1 General
You must include all merchandise and/or services purchased at one time and at one cash register on one Sales slip
if you prepare paper Sales Data, or in a single electronic transmission of Sales Data, unless otherwise approved by
us in writing. You may use a separate Sales slip or a separate transmission of Sales Data for bona fide deposits,
partial payments and Card sales that are charged to more than one Card. You must prepare and fully complete
Sales Data for each Card transaction as described below. You must provide the Cardmember with a completed
copy of the Sales Data at the time of each completed Card transaction.
4.2.2 Electronic Data Capture
You must use a terminal or point-of-sale device that is capable of performing electronic authorization and data
capture services under the following circumstances: Card sales where the Card is not present including, without
limitation, mail/telephone order sales, sales over the Internet and recurring billing transactions.
You must compare the Card Account number on the Sales Data printed by your electronic terminal to the number
on the Card to confirm that they match. If they do not match, you may not accept the Card sale and if you do, the
Card sale is subject to Charge back to you.
For transactions that are data-captured by electronically reading or scanning a Card using a point-of-sale ("POS")
terminal, you are generally not required to obtain a Card imprint on the Sales Data, unless otherwise required in
Section 4.2.3. However, if you are unable to capture the required Card data by swiping the Card through the point-
of-sale terminal, you must obtain a clear imprint of the Card on the Sales Data. Examples include, but are not
limited to, a defective magnetic stripe or in-terminal card reader.
For each Card sale, you must produce a copy of the Sales Data for the Cardmember. You must include all of the
following information on the Cardmember's copy of the Sales Data:
· The Card Account number; provided that you must display a truncated Card Account number on the Sales Data
where required by law.
· The Cardmember's name, unless prohibited by law.
· The Card expiration date, unless prohibited by law.
. The Merchant's name.
4
Discover Business Services Merchant Operating Regulations - Revised 09/02
-
· A description of the merchandise or service purchased.
· The total amount of the Card transaction (including sales tax and/or tip).
· The transaction date.
· The authorization approval code.
4.2.3 Paper Sales Data
If you do not use a POS terminal to electronically scan or read Cards, you must use a suitable imprinter to clearly
imprint the embossed information from the Card on the Sales Data and you must fully complete the Sales Data as
described below. After imprinting the Sales Data, fill in the information described below and ensure that all printed
and written information is clearly readable on all copies. If you cannot imprint a Discover 2GO Card, you should
ask the Cardmember for his/her standard Card that can be imprinted. If we do not receive paper Sales Data by the
deadline in Section 7.1, you may be charged a fee in the amount indicated by us in writing in your Agreement,
Disclosure Letter or other notification from us, as described in Section 9.3.
e
4.2.3.1
e
4.2.3.2
4.2.3.3
4.2.3.4
e
Sales Data Requirements
1. Quantity and brief description of the merchandise or service.
2. Transaction date.
3. Authorization approval code provided by us.
4. Employee initials.
5. Dollar amount of the transaction.
6. Sales tax.
7. Total dollar amount of the transaction including tax and tip. (Note: Do not write outside of this box.)
8. Cardmember's signature, unless the terms of the Agreement explicitly state that you are not
required to obtain the Cardmember's signature for certain Card sales described in the Agreement.
The Cardmember must sign the Sales slip in your presence. The Cardmember's signature on the
Sales slip must match the signature on the back of the Card. Compare the signature on the back of
the Card with that on the Sales slip and verify they match.
9. The words "Card Not Present" must be written on the Sales slip in lieu of the Cardmember's
signature in sales where the card is not physically present.
1999 1/99
Jl WEBB
MERCHANT NAME
CITY, STATE
6011 0101 2123456
_OI'Il_.._._...____
==;;:..:..~..~..:::;
Sal.. Slip
8 9
Delayed Delivery Sales
For delayed delivery sales, if the Cardmember agrees, you may prepare separate Sales slips. One Sales
slip should be labeled "Deposit" and one labeled "Balance." You may not remit the Sales slip (either
manually or electronically) labeled "Balance" until the merchandise is delivered or services are
completely performed. If you have an electronic data capture terminal, but you are unable to process
the Card transaction through it, you must follow the procedures for preparing Sales Data. A separate
authorization decision must be obtained for each amount that is billed to the Cardmember (see Section
4.4 for further instructions on Authorizing a Card sale).
Card Not Present
Sales where the Card is not physically present must be prepared as described in 4.2.3.1, except you
must write the words "Card Not Present" as applicable on the Sales slip in lieu of the Cardmember's
signature, and you must comply with the requirements in Section 5.0 with respect to the preparation
and submission of Sales Data.
Preparing the Merchant Settlement Batch Transmittal for Sales not Submitted by
Electronic Means
Each batch of Sales Data prepared by you must contain no more than 40 Card sales and/or Credit
slips and must be accompanied by a Merchant Batch Transmittal form. Each batch should be prepared
as follows for sales not submitted electronically:
A) Using your Merchant identification plastic provided by us, imprint a Merchant Batch Transmittal
form the same way as a Sales slip. Fill in the following information:
1. Total number of Sales slips.
2. Total dollar amount of Sales slips.
3. Total number of Credit slips.
4. Total dollar amount of Credit slips.
5. Total net amount (sales minus Credits).
6. Mailing date.
7. Signature of an authorized representative of your establishment.
8. Merchant phone number.
B) Place the hard copy (last) part of the Merchant Batch Transmittal form in the front of the Sales and
Credit slips; retain the other part(s) for your records.
Discover Business Services Merchant Operating Regulations - Revised 09/02
5
C)Use the pre-addressed transmittal envelope to mail your Merchant Settlement batch to us. Do not
submit a transaction in a batch until the merchandise or service has been delivered or furnished to
the Cardmember. Submit only one copy of each Sales slip or Credit slip.
6011 0000 ??oo 0000
1999 1/99
Jl wnll
MERCHANT NAME
CI1Y. STATE
6011 0101 2123.456
4.3 Credits for Returns
We will honor your return policy as long as it complies with all federal, state and local laws and is clearly posted or
otherwise made known to the Cardmember at the time of the Card sale. We may request a copy of your return policy at
any time. If a Cardmember returns goods or services purchased with a Card in accordance with your policy, you must give
a credit to the Cardmember's Card Account by completing a Credit slip, as described in Section 4.3.1 ("Credit"). If a
Cardmember receives merchandise or services that are defective or not as agreed upon at the time of the Card sale, you must
give the Cardmember a Credit, if requested by the Cardmember. You must transmit Sales Data evidencing a Credit to us for
each Credit transaction within the number of days described in Section 7.1 after you have issued the Credit to the
Cardmember or you may be charged a fee as described in Section 9.3. You must give evidence of the Credit to the
Cardmember. You shall pay us the amount of all Credits on Card sales as described in the Agreement and Section 7.2 of
these Operating Regulations.
4.3.1
Preparing the Credit Slip for Returns
You may not give cash refunds for Card sales. You are not required to obtain an authorization decision in order
to issue a Credit. You may issue a Credit to a Card Account only for a Card sale originally made with a Card. In
the case of even exchanges, you are not required to issue a Credit slip. For uneven exchanges, you must prepare a
Credit slip for the total amount of returned merchandise and a new Sales slip for the new merchandise purchased
and you must provide a copy of the Credit slip and the Sales slip to the Cardmember. The Credit amount may not
exceed the amount of the original Card transaction. You must follow these procedures when preparing a Credit
slip for a previous Card sale:
A) Check the Card for a valid expiration date and signature. If the Card is no longer valid, please call our
Authorization Center at 1-800-347-1111.
B) If you do not use a POS terminal to electronically scan or read cards, imprint the Credit data as described below.
(Ensure that all printed and written information is clearly readable on all copies.)
Credit data requirements:
1. Quantity and brief description of merchandise or service returned.
2. Date of the credit issuance.
3. Date of the original sale transaction.
4. Dollar amount of the credit.
s. Sales tax credit.
6. Total dollar amount of the credit.
7. Reason for the credit.
8. Signature of an authorized representative of your establishment.
128706011
Ii
,100"'-----
o i! 1999 1/99
I: Jl WEllll
~:
~ II MERCHANT NAME
~ it ~i ~~~ 2123 4S6
Ii--
Oil
!
1
4.4 Obtaining Authorization Decisions
Authorization is the process by which the Card issuer provides a response as to whether credit is available on the Card
Account involved in the Card transaction. You must obtain a positive authorization decision or approval before completing
a Card sale for any transaction. For delayed delivery sales, you must obtain a positive authorization decision or approval
before you submit Sales Data to us for the Card sale. The authorization approval code you receive will be valid for 90 days.
You may obtain authorization decisions from us by electronic terminal or telephone. We will provide you with an
authorization approval code, which must be written on the Sales slip, unless you obtained the authorization decision using
an electronic terminal or cash register in which case the authorization approval code will be printed on the Sales Data.
4.4.1
Data Transmission Requirements for Authorization Requests
If you accept a Card for a sale without receiving an authorization approval as described in this section, we are not
6
Discover Business Services Merchant Operating Regulations - Revised 09/02
e
e
e
4.4.2
4.4.3
required to pay you for the Card sale and if we have already paid you, we can process a Charge hack as described
in Section 8.2. Even if a positive authorization decision or approval is granted for a Card sale, it is not a guarantee
of payment. A Card sale may be subject to Charge back to you for other reasons as set forth in these Operating
Regulations or the Agreement.
4.4.1.1 CVV Data Requirements
If you use an electronic terminal, you must transmit to us the complete and unaltered contents of the
magnetic stripe on the Card presented for the transaction for each Card sale, along with each
authorization request you send to us. The magnetic stripe includes Card Verification Value ("CVV")
data which indicates that the Card was present at the time of the Card transaction. You must transmit
CVV data to us with each authorization request where the Card is swiped through your terminal or
POS device. If we do not receive the complete and unaltered contents of the magnetic stripe, including
CVV data, where required with each authorization request as described above, you may be charged a
fee as described in Section 9.3.
4.4.1.2
cm Requirements
For all Card transactions that are not swiped through your terminal or POS device, you must transmit
the three-digit Card Identification Data ("CID") in your authorization request or you may be charged
a fee as described in Section 9.3. Please see Section 12.7 for limitations on storage of CID numbers.
Please refer to Section 2.2 for a description of where the CID is located on Cards.
Cardmember Verification and Card Retrieval
Occasionally, for verification purposes, we may ask you to request certain information from a customer that has
presented a Card. Also, we may request that you take and retain a Card from a customer. If we request you to do
this, follow the instructions given by our Authorization Center. Do not use any force or effort if the customer
refuses to give up a Card, and do not take any action which will alarm or embarrass the customer. You agree to
advise all of your employees of these terms. We may, at our discretion, pay you a fee in the manner specified in
Section 10.1 for each Card that you retrieve at our request.
Down-Time Authorization Procedures for Electronic Terminals
If you use an electronic terminal to obtain authorization decisions for Card sales, follow the procedures given to
you by your terminal provider for the use of that terminal. If a "call center" referral code is displayed, call our
Authorization Center at 1-800-347-1111 to obtain further instructions. If your electronic terminal is not
operating, you must contact our Authorization Center to obtain authorization decisions by telephone for all Card
sales. Please refer to Section 4.4.4 for more information on using this service.
4.4.4 Telephone ("'Voice") Authorization Procedures
If you must use the telephone to obtain authorization decisions for Card sales, you must call our Authorization
Center at 1-800-347-1111. If when calling our Authorization Center, the authorization decision is provided by a
Merchant Services Representative rather than our automated service, you may be charged a fee in the amount
described in your Agreement, Disclosure Letter or other notification from us, as described in Section 9.3. Please
provide us with the following information for each voice authorization request:
· Card Account number (16 digits).
· Three-digit cm, as described in Section 2.2.
· The Discover Merchant number assigned to you (15 digits).
· Card expiration date (4 digits).
· Dollar amount of transaction including tax and tip (dollars and cents).
If authorization approval is granted, you will he given an authorization approval code. You must write this code
in the appropriate box on the Sales slip. (See Sales Data preparation procedures in Section 4.2.) If you are unable
to obtain an authorization decision using electronic means and you subsequently receive an authorization approval
by telephone as described above, you must complete the Card transaction (complete a force sale entry or override
transaction following the procedures supplied by your terminal provider) and obtain an imprint of the Card. If the
imprint does not display all of the features on valid Cards described in Section 2.2, the Card transaction is subject
to Chargeback to you.
Declined Authorization Procedures
If a Card is invalid for a transaction, you will receive a negative or declined authorization decision. Under no
circumstances should you or your employees comment on the transaction. Direct the Cardmember to contact the
Card issuer at the telephone number provided on the back of the Card or as otherwise distributed by the Card
issuer. If you submit Sales Data to us for a Card sale with a declined authorization decision, we may Chargehack
the Card sale to you as set forth in Section 8.2.
4.4.5
4.4.6
Obtaining Authorization for Recurring Billing Sales Transactions
If we have approved your acceptance of Cards as payment for recurring, installment or other periodic hilling plans
with your customers, you must receive a separate, current authorization decision for each discrete installment prior
to submitting Sales Data to us. You must transmit all authorization requests on recurring billing installments to us
in our form and format which is described in Section 5.3.1 and you must use an electronic terminal to obtain
authorization decisions for these transactions. If we or you have terminated the Agreement, you may not submit
installments that are due after the effective date of termination. If the Cardmember who agreed to the installment
plan ceases to be a Cardmember due to his, her or our termination of the relationship, you may not submit any
further installments and you must find an alternate method of collecting payment from the Cardmember. If we
authotize one installment, that is not a guarantee that any future installment(s) will be authorized or paid. If, at
any time, a Cardmember raises a dispute with respect to any installment payment or the goods or services you
agreed to provide, we may, at our discretion, Charge back a certain installment and any other installment
transactions you have transmitted to us. Please refer to Section 5.3 for complete procedures on the acceptance of
Cards as payment for recurring, installment or other periodic billing plans.
Discover Business Services Merchant Operating Regulations - Revised 09/02
7
4.4.7 Request for Cancellation or Change of Authorization
If a Card sale is cancelled or the amount of the Card sale changes and you previously obtained an authorization
approval, you must call 1-800-347-1111 and request a cancellation of the authorization approval. An
authorization approval can be cancelled at any time within eight days of your receipt of the authorization
approval. On some Card types, you may also be required to contact the Card issuer to provide the Cardmember
with the amount corresponding to the cancelled authorization approval. Be prepared to provide the following
information when canceling an authorization approval:
· Card Account number (16 digits).
· Your Merchant number (15 digits).
· Card expiration date (4 digits).
· Dollar amount of transaction including tax and tip (dollars and cents).
· Original authorization approval code given to you by your authorization provider for Card transactions.
· The new Card sale amount, if different from the original Card sale.
4.4.8 Authorization Floor Limit
For some Merchants, we may assign a Floor Limit for Card sales accepted by you. If a Floor Limit other than $0
has been established for the Card sales accepted by you, it will be indicated in your Agreement or Disclosure Letter,
as modified from time to time, as set forth in our records. If at any time you begin to authorize Card transactions
electronically, your Floor Limit may be reduced to $0, meaning that you must obtain authorization decisions for
ALL Card transactions, unless the terms of your Agreement explicitly provide for a Floor Limit above $0 and
electronic authorization of Card sales. If you accept a Card sale at or above the Floor Limit assigned to you
without obtaining an authorization approval, we may Chargeback the Card sale to you as set forth in Section 8.2.
You should not construe the assigned Floor Limit as a guarantee against a potential Charge back. If you fail to
comply with the Floor Limit, you shall be liable for the entire amount of the transaction, not just the portion of
the Card sale in excess of the assigned Floor Limit.
4.4.9 Down-Time Authorization Procedures
If our authorization system is not available and you do not use a third party processor to obtain authorization, the
Floor Limit for the length of the system down-time is $150 for only those Card sales involving purchases of
merchandise for which a Cardmember takes immediate possession. You should not use this Floor Limit to
authorize orders requiring delayed delivery or for the purchase of services; instead, you must wait to obtain
authorization until the authorization system is available. The exact date, time and duration of the system outage
will be recorded by us. In order to avoid Chargeback of an unauthorized transaction during a system down-time,
note the exact time of the transaction in the approval box on the Sales slip. The existence of any down-time is
considered confidential information and should not be shared with the Cardmember.
4.5
4.4.10 Address Verification Service rAVS")
You must use our Address Verification Service ("AVS") to verify the Cardmember's address for all Card sales that
are not swiped through your terminal or POS device, including without limitation, Internet Card sales as described
in Section 5.2 and Card sales by mail and over the telephone as described in Section 5.1. You must obtain address
verification from us by 11:59 p.m. Eastern Standard Time on the same day that you request an authorization
decision for the Card sale, regardless of whether the authorization request is approved or declined. If you do not
obtain an address verification by the deadline set forth above, you may be charged a fee in the amount set forth in
your Agreement, Disclosure Letter or other notification from us as described in Section 9.3.
To obtain address verification for a Card sale, you must comply with the following procedures.
· Use an electronic terminal to request address verification; or
· If you do not have an electronic terminal or are unable to obtain an address verification using your electronic
terminal, you should call us at 1-800-347-7988 to obtain address verification. If the address verification is provided
by a Merchant Services Representative over the telephone rather than our automated service, you may be charged
a fee in the amount set forth in your Agreement, Disclosure Letter or other notification from us as described in
Section 9.3. When calling to obtain address verification, please provide us with the following information:
· The Discover Merchant number assigned to you (15 digits)
· The Card Account number (16 digits)
· The first five numeric digits of the Cardmember's billing address
. The five or nine-digit ZIP code of the Cardmember's billing address
Note: These Address Verification procedures are not a guarantee against Chargebacks.
4.4.11 Special Procedures for Merchants with Customer-Activated Terminals rCAT Terminals")
If you are a Merchant that operates a customer-activated terminal ("CAT Terminal"), to accept Card transactions
at locations that sell primarily petroleum-related products and other related services, you must contact us, as
described in Section 6.3 for permission to use the procedures described in this section. If our records do not
indicate that you are permitted to use these procedures and you do so, your Card transactions are subject to
Charge back. If we permit you to use these procedures, you may transmit authorization requests in an amount of
$1, or an amount otherwise agreed to by us in writing, to verify the validity of a Card presented on a CAT
Terminal; provided that each authorization request must comply with the following requirements:
. The Card involved in the transaction at the CAT Terminal must be present at the time of each authorization
request; no authorization requests may be transmitted for Card transactions over the Internet, mail or telephone.
· Each authorization request must include the entire, unaltered contents of either Track 1 or Track 2 of the
magnetic stripe of the Card.
Code 10: Suspicious Situations
If you are suspicious of the validity of a Card or the presenter of the Card for any reason, you should notify our
Authorization Center (1-800-347-1111) using the Code 10 Authorization procedures described below. The Code 10
Authorization procedures can be used regardless of the dollar amount of the Card sale or your assigned Floor Limit.
. Call our Authorization Center and ask for a Code 10 Authorization (select Option 2). This will automatically direct you
to the Cardmember Security Department.
8
Discover Business Services Merchant Operating Regulations - Revised 09/02
. Security Department personnel will ask a brief series of "Yes" or "No" questions about the Card or the presenter, and
may ask your employee to request confirming identification from the presenter.
. If the Security Department is able to confirm the identity of the presenter as a valid Cardmember or authorized user of
the Card, an authorization decision for the Card sale will be given and the presenter will not be aware that anything
unusual has transpired.
. If your employee is instructed to retain the Card, your employee should do so, but only by peaceful and reasonable means.
Arrests for Fraudulent Card Usage
Our Security Department may request you to cause the arrest of a Card presenter who is suspected of the fraudulent use of
a Card. When complying with such a request you must use reasonable, lawful means, and must have the arrest made by
local law enforcement authorities. Your employees or agents should never physically detain or harm the person(s) that
presented a Card. Anyone arrested for fraudulent use of a Card will be appropriately prosecuted. Except as provided below,
we shall bear all responsibility for the arrest of a person when we have requested you to cause such an arrest. You agree
that you and your employees will not initiate an arrest of a Card presenter for use of a Card except at our request. A
Merchant that causes the arrest or prosecution of any person for use of a Card without our specific request and permission
or that fails to use reasonable, lawful means in effecting an arrest which has been requested and authorized by us, will bear
all responsibility for claims, liabilities, costs, and expenses resulting from such arrest or prosecution.
e
4.6
5.0 CARD NOT PRESENT SALES
5.1 Mail and Telephone Order Card Sales
You may accept Cards for telephone or mail order sales if you follow the procedures in the Agreement and these Operating
Regulations for accepting such Card sales. You must obtain an authorization decision for each mail or telephone order Card
sale as described in Sections 4.4 and 5.1.1. You must document the Card sale and send Sales Data to us as described below.
Address Verification Requirements
For each mail or telephone order Card sale, you must comply with the address verification procedures in Section
4.4.10 or you may be charged a fee as described in Section 9.3.
Documentation of Card Sales
In addition to complying with the requirements for preparation of Sales Data in Section 4.2, you must obtain the
following information from the Cardmember for each mail or telephone order Card sale: Cardmember name, Card
Account number, Card expiration date, billing address and shipping address, if different than the billing address.
You must retain such information, along with the shipping date, for the document retention period in the
Agreement. You shall provide the shipping date to the Cardmember at the time of each telephone order Card sale
and upon request for each mail order Card sale.
5.1.4 Transmission of Sales Data
For each mail or telephone order Card sale, you must transmit Sales Data to us each Business Day in our form and
format. All Sales Data shall be transmitted to us using an electronic means of transmission. You must not transmit
Sales Data to us for merchandise or services ordered by a Cardmember until the merchandise or services have been
shipped, delivered or furnished to the Cardmember; except that you may accept a Card for a deposit on a purchase
of merchandise or services and you may transmit 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.
5.1.1
5.1.2
5.1.3
e
Obtaining Authorization
For each mail or telephone order Card sale, you must transmit the three-digit CID with the authorization request.
If you accept a Card sale without receiving a prior authorization approval as described in Section 4.4 or without
transmitting the three-digit CID in the authorization request, the Card sale may be subject to Charge back to you.
If you do not submit the three-digit CID in the authorization request, you may be charged a fee as described in
Section 9.3.
5.1.5 Delivery Requirements
At the time of delivery of merchandise or services ordered in a mail or telephone order Card sale, you must provide
the Cardmember with an invoice or other documentation that includes the information obtained from the
Cardmember in Section 4.2.3. You also must obtain the Cardmember's signature as proof of delivery if delivery is
made to the Card member. If the Cardmember requests delivery to a third party, you must obtain the signature of
a party designated by the Cardmember as proof of delivery. You must retain this proof of delivery for the document
retention period set forth in the Agreement. If a Cardmember comes into your retail location, if any, to pick up
merchandise ordered by mail or telephone, you must obtain an imprint of the Card and the Cardmember's
signature. In the event of a dispute by a Cardmember with respect to delivery of merchandise or services ordered
by mail or telephone, the Card sale is subject to Charge back as described in Section 8.2 if you have not obtained
a valid signature from the Cardmember.
5.2 Card Sales over the Internet
You must obtain our prior approval before accepting any Card transactions over the Internet and you must comply with
the requirements in the Agreement and these Operating Regulations with respect to each Card sale accepted over the
Internet. Any Card sales that do not comply with the Agreement and these Operating Regulations are subject to Chargeback
as described in Section 8.2. For each Card sale over the Internet, you must comply with the requirements in Section 5.1 in
addition to the requirements in this section.
5.2.1
e
Protocol for Internet Card Transactions
Each Internet Card transaction accepted by you and submitted to us shall comply with our standards, including,
without limitation, our standards governing the formatting, transmission and encryption of data, referred to as our
"designated protocol". You shall accept only those Internet Card transactions that are encrypted in accordance
with our designated protocol. As of the date of these Operating Regulations, our designated protocol for the
encryption of data is Secure Socket Layer (SSL). We may, at our discretion, withhold Settlement until security
standards can be verified. However, our designated protocol, including any specifications with respect to data
Discover Business Services Merchant Operating Regulations - Revised 09/02
9
5.2.2
5.2.3
encryption, may change at any time upon 30 days advance written notice. You may not accept Card Account
numbers through Electronic Mail over the Internet.
Browser Support for Protocol
You shall not accept any Internet Card transactions unless the transaction is sent by means of a browser which
supports our designated protocol. However, if you desire to accept a Card transaction from a Cardmember whose
browser does not support our designated protocol, you may accept such a Card transaction by means other than
the Internet, such as mail, telephone or facsimile.
Authorization and Submission Requirements
You shall not accept any Internet Card transaction except in compliance with the Agreement and these Operating
Regulations. Additionally, you shall comply with the following requirements for each Internet Card transaction:
· You must obtain an authorization decision for the Card sale as set forth in Sections 4.4 and 5.1.1 using an
electronic means of transmission that is approved by us.
· You must obtain address verification for the Card sale from us using the procedures described in Section 4.4.10
or you may be charged a fee as described in Section 9.3.
· You must submit Sales Data using an electronic means of transmission and you must comply with other
requirements in Section 7.1. You may not submit Sales Data to us by non-electronic means.
· You must not submit Sales Data to us until the merchandise or services ordered are delivered to the
Cardmember.
Data Security
You agree to comply with our security and encryption procedures for Card transactions, as described in Section
12.6. Please review the requirements in Section 12 and confirm that your procedures comply with such
requirements before accepting any Card transactions over the Internet.
Chargeback for Noncompliance
Any Card transaction over the Internet that fails to comply with the Agreement or these Operating Regulations is
subject to immediate Charge back. We may collect any amounts owed by you with respect to Chargebacks on
Internet Card transactions from the proceeds of Settlement amounts otherwise payable for any Card transactions.
We may, at our discretion, terminate the Agreement immediately if you fail to comply with these terms.
5.3 Recurring. Installment or Other Periodic Billing Plans
If you accept Cards for recurring, installment or other periodic billing plans ("recurring billing"), you must comply with the
requirements described below before initiating a series of Card transactions and also with respect to each individual Card
transaction. A recurring billing plan means an obligation, either of a fixed or variable amount that is paid by a Cardmember
with a series of charges to a Card Account over a period of time.
5.2.4
5.2.5
5.3.1
5.3.2
Requirements - Overview
You must comply with the requirements in Section 4.4 and those described in this section with respect to each
amount billed to a Card Account pursuant to a recurring billing plan. If you fail to comply with any of the
requirements in Section 4.4 or in this section, or if a Cardmember raises a dispute at any time with respect to a
Card sale involving a recurring billing plan or the goods or services that you agreed to provide in a recurring billing
plan, we may, at our discretion, Chargeback any installment that is subject to dispute in addition to any
installments that you previously submitted to us, in accordance with Section 8.2.
· You must obtain and preserve a record of the Cardmember's approval, as described in Section 5.3.2, for a
recurring billing plan that charges amounts to a Card Account.
· You must receive a separate, current authorization decision from us for each installment billed to a Card
Account under a recurring billing plan. Each request for an authorization decision for a recurring billing
transaction must be transmitted to us in our form and format unless otherwise agreed upon in writing by us as
indicated in our records. Our form and format is described in "Discover Financial Services, Inc. ISO 8583
Authorization Message Formats for Merchants of Discover Transactions, Version 3.0, September 5, 2001". If
an authorization approval is provided to you for a Card sale for an installment payment pursuant to a recurring
billing plan, that is not a guarantee that any future installment billed to a Card Account will be authorized or
paid by us. Please refer to Section 4.4 of the Operating Regulations for an explanation of how to obtain
authorization decisions for Card sales.
· The Sales Data that you transmit to us for recurring billing transactions must comply with the requirements in
Section 7.1. If we or you terminate the Agreement, you may not submit Sales Data to us for recurring billing
Card sales that are due after the effective date of termination. If a Cardmember who agreed to a recurring billing
plan ceases to be a Cardmember due to his, her or our termination of the relationship, you may not submit Sales
Data to us for any further installments on that Card Account and you must find an alternate method of
collection from the Cardmember.
Cardmember's Approval
You must obtain the Cardmember's written approval to charge amounts to their Card Account over the term of
the recurring billing plan. If you use the Internet or another electronic process to receive an application from a
Cardmember for a recurring billing plan, you must retain electronic evidence of the Cardmember's approval of the
recurring billing plan. In any event, the Cardmember's approval, whether written or electronic, must include all of
the following information:
· Cardmember's name, address, and Card Account number.
· Amount of each installment, unless the amount of the installment varies.
· Timing or frequency of payments.
· Length of time over which Card member permits you to bill installments to the Card Account.
· Your Merchant number as assigned by us.
10
Discover Business Services Merchant Operating Regulations - Revised 09/02
e
· Card expiration date.
. Dollar amount of transaction including tax and tip (dollars and cents).
You must retain evidence of the Card member's approval of the recurring billing plan for the longer of either the
term of the recurring billing plan or the document retention period in the Agreement. Upon our request, you must
provide us with evidence of the Cardmember's approval of the recurring billing plan. In the event of renewal of a
recurring billing plan or the expiration of a term of a recurring billing plan, you must obtain new evidence of the
Cardmember's approval of such continued participation in the recurring billing plan.
5.3.3 Complete Sales Data
In addition to obtaining an authorization decision for each Card sale as set forth in Section 4.4 and retaining
evidence of the Cardmember's approval of the recurring billing plan, the Sales Data that you submit to us for Card
sales involving recurring billing plans must comply with Sections 4.2, 7.1 and the requirements described below.
. Sales Data prepared by you for each Card sale must include a general description of the Card transaction, the
name of your establishment and a toll-free customer service number that the Cardmember may call to obtain
customer assistance or revoke their written approval of the recurring billing plan. If this information is provided
in the Sales Data, you are not required to send a separate statement of charges to the Cardmember for each
amount billed to the Card Account in a recurring billing plan.
. For each Card transaction involving a recurring billing plan, you must submit Sales Data to us in our form and
format, unless otherwise agreed upon in writing as indicated to us in our records, and you must contact us to
obtain certification from us before you submit Sales Data.
6.1
6.0 SPECIAL CIRCUMSTANCES
6.2
e
e
Card Acceptance during Store Closings or Liquidation
You must comply with the following requirements during the liquidation and/or closure of any of your outlets, locations
and/or entire business:
. Post signs visible to customers stating "All Sales Are Final."
. Stamp receipts or print Sales Data with notice that" All Sales Are Final."
. Contact us at 1-800-347-2000 to advise of the closure of locations and/or liquidation of your establishment.
Policies for Merchants in the Lodging Industry
6.2.1 Overview
Provided below are our requirements for Merchants in the lodging industry, who take reservations and require
Cardmembers to pay advance deposits. If you do not comply with the procedures in Section 6.2.2 for guaranteed
reservations and Section 6.2.3 for advance deposits, any Card sales accepted by you for guaranteed reservations
and advance deposits are subject to Chargeback. Please note that for all Card transactions that are not swiped
through your terminal or pas device you must follow the procedures described in Section 5.l.
6.2.2 Requirements for Guaranteed Reservations
You may accept Cardmembers' reservations for accommodations and guarantee rooms for late arrival after the
normal 6:00 p.m. (local time) check-in deadline if you follow the procedures in this Section 6.2.2. If the check-in
deadline passes without a cancellation of the reservation by the Cardmember, you may bill the Cardmember for
one night's lodging (plus applicable taxes); if you have complied with all of your obligations in this Section 6.2.2.
6.2.2.1
6.2.2.2
6.2.2.3
Notice to Cardmember of Rights and Obligations
At the time of reservation, you must verify that the Cardmember plans to guarantee their reservation.
If a guarantee is requested, you must advise the Cardmember of the rights and obligations set forth
below and you must comply with these requirements. You must inform the Cardmember of the room
rate and reservation confirmation number and you should advise the Cardmember to retain this
information.
· Accommodations of the type requested by the Cardmember will be held by you until check-out time
on the day following the scheduled arrival date.
· If the Cardmember seeks to cancel the reservation, the Cardmember must do so before 6:00 p.m.
(local time) on the scheduled arrival date. Resorts may move the 6:00 p.m. (local time) deadline
back no more than three hours to 3:00 p.m. (local time), if the Card member has been informed of
the date and time the cancellation privileges expire.
· At the time of the reservation, you shall provide the Card member with a telephone number to call
for cancellations and instructions to retain a record of it.
· If the reservation is not cancelled within the allowed time frame and the Cardmember does not use
the accommodation and you do not rent the room to another guest, you may bill the Cardmember
for a No-Show charge equal to one night's lodging (plus applicable taxes).
Record of Guaranteed Reservations
You must preserve a record of the following information for each guaranteed reservation:
· Cardmember's name as it is embossed on the Card
· Card Account number and Card expiration date
· Anticipated arrival date and length of stay
· The. cancellation policy in its entirety, inclusive of the date and time the cancellation privileges
expIre
· Any other pertinent details related to the reserved accommodations
Written Confirmation of Guaranteed Reservations
You must provide Cardmembers with written confirmation of each guaranteed reservation. The
confirmation must contain:
· Cardmember's name as it is embossed on the Card
Discover Business Services Merchant Operating Regulations - Revised 09/02
11
· Card Account number and Card expiration date
· Reservation confirmation number
· Anticipated arrival date and length of stay
· The. cancellation policy in its entirety, inclusive of the date and time the cancellation privileges
expIre
· Any other pertinent details related to the reserved accommodations
6.2.2.4 Cancellation of Guaranteed Reservations
If a Cardmember seeks to cancel a reservation in accordance with your cancellation policy and
specified time frames, you must provide the Cardmember with a cancellation number and instructions
to retain a record of it. You shall forward written confirmation of the cancellation of each guaranteed
reservation within three Business Days of Cardmember's request for written confirmation. This
cancellation confirmation must contain:
· Cardmember's reference that charges were placed on the Card, if applicable
· Cardmember's name as it is embossed on the Card
· Card Account number and Card expiration date
· Reservation cancellation number
· Any other pertinent information related to the reserved accommodations
6.2.2.5 Sales Data for "No-Show" Charges
If the Cardmember does not cancel a reservation in accordance with your cancellation policy and
specified time frames and the Cardmember does not use the accommodations and you do not rent the
room to another guest, you may charge the Cardmember for a "No-Show" charge by preparing and
transmitting Sales Data with the following information:
· Cardmember's name as it is embossed on the Card
· Card Account number and Card expiration date
· Hotel name and location (imprinted)
· Room rate (quoted when reservation was made including applicable taxes)
· Transaction date
· Authorization approval code
· Employees initials
· The words "No-Show" printed on the Cardmember's signature line
Advance Deposit
You may require Card members to pay a deposit at the time of a reservation, if you comply with the requirements
in this Section 6.2.3. The amount of the deposit cannot exceed the cost of seven nights lodging (plus applicable
tax) and the deposit must be applied to the entire bill. When you require an advance deposit, you must provide
Cardmembers with the information required below. Note: Cardmembers may NOT be charged a No-Show penalty
in addition to a forfeited advance deposit.
6.2.3
6.2.3.1
6.2.3.2
6.2.3.3
Obligations with Advance Deposits
If you take advance deposits for reservations, you must comply with the following requirements:
· Hold reserved accommodations until check-out time following the last day covered by an advance deposit.
· A specified reservation cancellation time frame including the date and time when cancellation
privileges expire.
· Full reimbursement of advance deposits when the Cardmember cancels a reservation within the
specified time frame.
· A disclosure informing Cardmembers of their rights and obligations that failure to cancel a
reservation within the specified time frame may result in forfeiture of all or part of an advance
deposit. Note: Cardmembers may NOT be charged a No-Show penalty in addition to a forfeited
advance deposit under this policy.
Sales Data Requirements for Advance Deposits/Folio
For each advance deposit taken by you, you shall prepare Sales Data in the amount of the advance
deposit and transmit it to us immediately after taking the reservation for the advance deposit. Sales
Data must contain the following information:
· Cardmember's name as it is embossed on the Card
· Card Account number and expiration date
· Cardmember's complete mailing address and phone number
. Transaction date
· Anticipated arrival date and length of stay
· Reservation confirmation number
· Authorization approval code
· Advance deposit amount (including applicable taxes)
· Words "Advance Deposit" on the Cardmember signature line
Written Confirmation
You must provide the Cardmember with written confirmation of an advance deposit that contains the
following information.
· A copy of the Sales Data that you prepared and transmitted for the advance deposit
· Reference that charges were placed on the Card
· Cardmember's name as it is embossed on the Card
. Card Account number and expiration date
. Reservation confirmation number
· Anticipated arrival date
. The cancellation policy in its entirety, inclusive of the date and time the cancellation privileges expire
· Any other pertinent details related to the reserved accommodations
12
Discover Business Services Merchant Operating Regulations - Revised 09/02
e
6.2.3.4 Cancellation of Reservations with Advance Deposits
If the Cardmember requests a cancellation of a reservation in accordance with your cancellation policy
and time frames, you must issue a Credit to the Cardmember's Card Account for the full amount of
the advance deposit charged to the account within the number of days described in Section 7.1 of the
Cardmember's request. In addition, you must:
. Provide a cancellation number to the Cardmember and instructions to retain a record of the number.
. Prepare Sales Data for the Credit as described in Section 6.2.3.5 and transmit the Sales Data to us
within the number of days described in Section 7.1 of the Cardmember's request.
6.2.3.5 Sales Data Required for Cancellation of Reservations with Advance Deposits
You must prepare and transmit Sales Data to us for each cancellation that includes the following
information and you must send a copy of the Sales Data documenting the Credit to the Cardmember
within the number of days described in Section 7.1 of the Cardmember's request for cancellation of a
reservation:
. Cardmember's name as it is embossed on the Card
· Card Account number and expiration date
· Cardmembers complete mailing address and phone number
· Transaction date
· Reservation Cancellation Number
. Advance deposit amount
· Words" Advance Deposit" on the Merchant's signature line
6.2.4 Overbookings
If the accommodations reserved by a Cardmember pursuant to a guaranteed reservation or with an advance
deposit are unavailable upon arrival you must at your own expense, provide the Cardmember with the following:
. Comparable accommodations for one night at a similar Merchant location (including applicable taxes)
· Transportation to the alternate merchant location
· Forwarding of all calls and messages to the alternate Merchant location
6.2.5 Priority Check-out Service
If you offer priority check-out services, you must comply with the following requirements:
1. Require the Card member to sign the registration card at the time of check-in acknowledging responsibility for
all charges. Obtain an authorization decision for the estimated amount of the accommodations at check-in by
swiping the Card through your terminal or POS device.
2. Complete Sales Data at check-out by entering the total amount of charges incurred during the stay including:
restaurant, telephone and miscellaneous expenses.
3. Write the words "Priority Check-out" on the signature line of the Sales Data.
4. Obtain a final authorization approval code for any additional amounts from the check-in estimate to equal the
total amount to be billed to the Cardmember. Follow the authorization procedures set forth in Section 4.4.
5. Mail the Card member (at the address shown on the registration card) a copy of the Sales Data and itemized
lodging bill.
6. Transmit completed Sales Data to us within the number of days described in Section 7.1.
6.2.6 Estimated Authorization
If you seek to obtain an authorization decision for the estimated amount of charges to be billed to a Cardmember,
you shall comply with the following procedures. At the beginning of the Cardmember's stay and on a periodic basis
thereafter, you may obtain an authorization decision as set forth in Section 4.4 for an amount equal to the
estimated total of a Cardmember's charges based on his/her length of stay and other criteria. You must follow the
procedures in Section 6.2.6.1 to obtain an authorization decision for the amount of the estimated charges expected
during the length of a Cardmember's stay and to obtain additional authorization decisions for the actual charges
that exceed the amount originally estimated by you for which you obtained authorization decision.
6.2.6.1 Check-in Estimate
At check-in, you may estimate the Cardmember's total charges based on the below requirements and
obtain an authorization decision for the amount of that estimate:
· Intended length of stay
· Room rate
· Applicable taxes
· Applicable service charges
· Any miscellaneous charges, as dictated by experience
6.2.7 Changes to Estimated Charges
You must monitor the charges made during the course of a Cardmember's stay to ensure that the actual charges
do not exceed the amount indicated in the estimated authorization. The following conditions apply:
· If the actual charge activity exceeds the amount of the estimated authorization, THEN you must secure a
positive authorization decision or approval for the amount in excess of the estimated authorization. Note: Such
amounts should not be cumulative and each additional authorization decision should cover a separate portion
of the total amount. If an authorization request is declined, no charges occurring after that date will be accepted
by us for that Cardmember.
· A final (or additional) authorization decision is not required if the final amount (total sum) of the Cardmember's
charges does not exceed the sum of the previously authorized charges, plus a 15 percent tolerance.
· The dates, authorized amounts, and their respective authorization approval codes must be individually recorded
on the Sales Data and Folio.
e
e
Discover Business Services Merchant Operating Regulations - Revised 09/02
13
6.3 Merchants with Customer Activated Terminals rCAT Terminals")
If you sell petroleum-related products and other related services and use Customer Activated Terminals ("CAT Terminals")
to accept Cards, you may use the special procedures for authorization described in Section 4.4.11 if you comply with the
following requirements.
6.3.1
6.3.2
6.3.3
You must contact the Sales Representative assigned to your account to obtain a unique Discover Merchant number
for use exclusively with Card transactions on CAT Terminals ("CAT Merchant number"). If you are unable to
contact our Sales Representative assigned to your account, please contact our Merchant Services Center at 1-800-
347-2000.
You agree to use the unique CAT Merchant number (not any other Merchant number) for all Card transactions
on CAT Terminals. You shall use the CAT Merchant number for the sole and exclusive purpose of Card
transactions on CAT Terminals.
If you comply with the procedures in this Section 6.3 and the procedures for obtaining authorization decisions in
Section 4.4, the Card transactions that you accept on CAT Terminals will not be subject to Chargeback up to the
maximum amount of your Floor Limit for the reasons: Missing Signature (IS), and No Imprint on Sales Slip (SI).
You may be subject to Chargeback for other reasons, including, without limitation, the failure to comply with the
procedures in this Section 6.3 and Section 4.4.
7.0 PROCESSING AND SETTLEMENT
7.1 Transmission of Sales Data
You must transmit Sales Data to us within ten (10) days of the date that you accept a Card sale or issue a Credit, to the
location that we specify, unless we notify you of a different submission deadline. If you submit Sales Data after the submission
deadline, we may: (a) charge Submission Error Fees as described in Section 9.3; (b) hold Settlement amounts for 180 days or
until we have received payment from the Card issuer; and (c) Chargeback such Card transactions to you. If you submit Sales
Data after the deadline, you agree to indemnify and hold us harmless from and against all claims, damages and lawsuits
arising out of the Card transactions. Except for Cardmember deposits for purchases, you may not send us Sales Data for
goods or services ordered by a Cardmember until the goods or services have been delivered or furnished to the Cardmember.
Submitting Electronic Sales Data
If you transmit Sales Data to us by electronic means, you must transmit your Sales Data each Business Day to the
location that we specify. For Sales Data submitted electronically, the number of Sales or Credit transactions should
not exceed your terminal's maximum capacity per batch. Please follow the instructions given to you by your
terminal provider on how to process and submit sales transactions using your terminal. Note: If you submit your
sales electronically, do not mail your Sales slips or Credit slips to us unless we direct you to do so.
Submitting Paper Sales Drafts
If you send Sales Data by mail, you agree to send your Sales Data to the location that we specify in the envelopes
provided to you. In remitting such data to us, you must provide us with the location (City/State) of each
transaction. Payment will be made to you directly after your Sales Data has been received and processed, as
described in these Operating Regulations.
7.2 Settlement
The term "Settlement" means the procedure by which we will reimburse you for the amounts payable to you pursuant to
the Agreement with respect to the Card sales accepted by you and by which you will pay us for the amounts that you owe
us. Your Settlement total for each period that we calculate Settlement will be the sum of the following items:
· Purchases made at your Merchant location in the form of Sales Data transmitted to us (See Section 7.1).
· Minus Credits submitted by you to us (See Section 4.3).
· Plus or minus Chargebacks (See Sections 8.2 and 8.3).
· Minus Merchant Fees, as applicable, Submission Error Fees and other fees payable by you (See Section 9.0), as applicable.
· Plus or minus adjustments we make to reconcile or correct errors in your Sales Data (See Section 7.2.1).
Adjustments or discrepancies between the batch transmittal total transmitted with your Sales Data and the actual sales detail
will be offset against the same or subsequent Business Day's Settlement total. Chargebacks will be offset against the same
or subsequent Business Day's Settlement total.
We may, at our option, collect amounts owed by you using any or all of the following means and not necessarily in the
following order: collect amounts owed by you from the Settlement Account as described in Section 7.2.3, offset amounts
otherwise payable to you or make demand for such amounts. You agree to immediately send us amounts upon demand. We
may collect amounts owed by you from the proceeds of Settlement amounts payable to you if such obligations arise
pursuant to the Agreement, these Operating Regulations and any other agreements between you and us.
7.1.1
7.1.2
7.2.1
Settlement Adjustments
We may process adjustments to you in order to collect amounts owed by you for Card transactions that have been
improperly processed. These adjustments may be at your request or at our discretion. Reasons for adjustments may
include, but are not limited to:
· Card sales or Credits processed on the incorrect Cardmember number.
· Calculation errors on the Merchant Batch Transmittal.
· The total of Card sales and Credits submitted on the Merchant Batch Transmittal did not match the actual total
of transactions processed by us.
· Sales Data or Credit data were illegible, incorrectly completed or incomplete.
· Items other than Card sale transactions or Credits were submitted.
14
Discover Business Services Merchant Operating Regulations - Revised 09/02
e
The adjustment reason codes we will use are listed below:
Code Description
IN Invalid Cardmember Account
MA/ML Amount adjustment
MB Sale posted as a Credit
MG/MP Duplicate processing
MI/MM Incorrect Merchant
MO Merchant-only adjustment
MR/MX Miscellaneous adjustment
MT/MU Transmission dump
MW Merchant write-off
MZ Credit posted as a Sale
RT Dispute adjustment (Dispute by Cardmember initiated more than 180 days after Card Sale and
Merchant failed to comply with its obligations in the Agreement and/or Operating Regulations)
7.2.2 Settlement Initiation
We will pay you for Settlement amounts in accordance with the timing set forth below unless we have notified you
in writing of different payment timing. For Sales Data transmitted to us in electronic form and received by us at
or before 7:00 p.m. of your local time on a Business Day at the location we specify, we will use our best efforts to
initiate Settlement by the following Business Day. For Sales Data transmitted to us in electronic form and received
by us after 7:00 p.m. of your local time on a Business Day at the location we specify, we will use our best efforts
to initiate Settlement by the second Business Day following receipt of the Sales Data. For Sales Data mailed to us
in paper form, we will use our best efforts to initiate Settlement by the second Business Day following receipt of
the Sales Data. We may change the schedule for Settlement of Sales Data upon five (5) days' written notice to you
as described in the Agreement. While we initiate settlement on a certain day, you may receive such amounts at a
later time due to the various parties involved in the banking and settlement system.
7.2.3 Settlement Account
Depending upon the Settlement option that you select, we will either send the funds electronically to an account
that you designate at a mutually agreed upon U.S. financial institution (the "Settlement Account") or send you a
check for Settlement. If you choose electronic Settlement, you authorize us to credit and debit the Settlement
Account as indicated below and in accordance with the rules and procedures of the applicable clearinghouse
association and Settlement institution(s). This authority will remain in effect until five Business Days after we
receive written notice of your cancellation of such permission. We are not liable for any delays in the receipt of
funds in your Settlement Account or errors in debit and credit entries caused by third parties, including but not
limited to, a clearinghouse, your financial institution or your agents.
If there are insufficient funds in your Settlement Account to pay us the amounts you owe us, you agree to
immediately send us such amounts upon demand, or at our option, we may offset such amounts owed to us from
money that we may subsequently owe you.
Additionally, if we receive returned items due to insufficient funds in your Settlement Account, we may charge you
a fee per returned item and we may also charge you for any fees incurred by us on the returned items.
7.2.3.1 Changing the Settlement Account
In order to ensure prompt Settlement of funds, please provide us with at least three (3) Business Days'
advance notice of any changes to your Settlement Account. When requesting a change to your
Settlement Account you will be required to verify the existing bank information. We may also request
that you provide us with a copy of a cancelled check for the new Settlement Account and the reason
for such change. Section 1004.1 describes your obligation to notify us of any changes in ownership of
your business, corporate changes and legal proceedings to which you are a party that may result in
changes to your Settlement Account. You may use Discoverbiz.com to print out a form to request a
change in your Settlement Account. We will not be responsible for funds sent to an incorrect bank
account due to your failure to notify us as set forth above. If the Settlement Account indicated in our
records becomes inactive or transactions directed by us to the Settlement Account are returned to us,
we may hold Settlement amounts until you contact us to establish a new Settlement Account.
7.2.4 Responsibility of Merchant for Settlement Verification and Statement Review
You are solely responsible for reviewing all of the Settlement amounts that you receive and your periodic reports
referred to in Section 704 to confirm that the payments you receive correctly match your Sales Data submissions.
If you believe you have received an underpayment, you must notify us immediately so that we may pay you any
additional amounts owed. If you fail to provide us with written notice of an objection to the information in any
periodic report or any Settlement payment (or lack thereof) within 90 days of the date funds have been settled and
we cannot recover any misposted funds that should have been paid to you, we will not be required to pay you the
amount of any such funds. If you have received an overpayment or a payment is mistakenly sent to you, you must
immediately notify us and remit the overpayment to us. You may not spend any overpayment, and if an
overpayment is in the Settlement Account, you may not withdraw it except to make arrangements to return it to
us. You agree that we may debit the Settlement Account for the amount of the overpayment, or at our option, we
may, without prior notification, offset such amounts owed to us from money that we may subsequently owe.
If you fail to provide us with prompt written notice as indicated above, you understand and agree that you are
forever barred and stopped from challenging, objecting to, or otherwise disputing either the Settlement payments
described in your periodic reports or the amounts paid (or not paid) to you as Settlement for Card sales. You also
expressly release us from any and all claims, causes of action and defenses arising from, or related to, any
Settlement amount which you have not disputed through the delivery of actual written notice to us as described
above. You acknowledge and agree that this release relates to future claims, and further understand and agree that
this release and the related acceptance of responsibility for the review of periodic statements of account and
e
e
Discover Business Services Merchant Operating Regulations - Revised 09/02
15
Settlement payments are material terms of the Agreement, and without such terms, we would not agree to enter
into the Agreement and provide related services in connection therewith.
7.2.5 Suspension of Settlement
At the termination or during the term of the Agreement, we may at our discretion, withhold or suspend Settlement
amounts without prior notice to you, as required by law (i.e. pursuant to a subpoena or court order) or in order
to exercise our rights pursuant to the Agreement and these Operating Regulations.
7.3 Payments from Cardmembers
You may not receive or process any money representing a Cardmember's payment to Discover Business Services. We have
the sole right to receive payment from Cardmembers for Card transactions made at your establishment. If you receive a
payment from a Cardmember, you must immediately forward it to us at the following address:
East of the Mississippi: West of the Mississippi:
Discover Business Services Discover Business Services
Merchant Services Center Merchant Services Center
P.O. Box 3011 P.O. Box 52145
New Albany, OH 43054-3011 Phoenix, AZ 85072-2145
7.4 Periodic Reports
You shall receive periodic reports from us describing Card transaction activity on your Merchant account during the period
covered by the statement, including any Card sales accepted by you, the Merchant Fees and other fees applicable to such
Card sales, any Chargebacks owed by you and any other transactions. We may provide reports to you or make them
available according to a mutually agreed upon process. If we make reports available to you on the Internet, you are
responsible for retrieving them. Please verify that each report includes the accurate total for all Card transactions that you
accepted and all Sales Data that you transmitted during the period covered by the report.
8.0 TICKET RETRIEVALS AND CHARGEBACKS
8.1
Ticket Retrievals
From time to time, we may receive a request from a Cardmember for information regarding a Card transaction made at
your establishment, or a Cardmember may dispute a Card transaction. If we request documentation (referred to as a "Ticket
Retrieval") from you as a result of such an inquiry, you must provide us with a copy of the Sales slip or Credit slip within
15 Business Days of our request. If you do not respond to such a Ticket Retrieval request within 15 Business Days, we may
return the Card transaction or Card transactions to you as a Chargeback, as described in Section 8.2. The data on your
response to our request must be sufficiently legible for submission to the Cardmember for review or for identification of the
Card Account number. In response to a request for a copy bearing the Cardmember's signature, the Merchant may provide
a legible reproduction using the electronic signature capture technology. To satisfy Ticket Retrieval requests for certain
transactions, the Merchant may provide a substitute Transaction Slip in accordance with the requirements specified in other
sections of these Operating Regulations. For Ticket Retrieval requests satisfied with a substitute Transaction Slip, the Card
Issuer may subsequently submit a dispute if any of the required data elements listed below are missing from the substitute
Transaction Slip:
· The Card Account number, except where truncated due to state or local regulations
· The Cardmember name
· The Card expiration date
· The Transaction amount
· The Transaction date
· The Authorization approval code
· The Merchant name and location
· A description of the merchandise/services
In addition to the above requirements, the following data elements are required in these special circumstances.
For Mail Order/Telephone Order and Internet transactions:
· The "ship to" address
· Signature obtained upon delivery
For Car Rental:
· The rental location and return location
· The rental agreement number
· The rental and return dates
· The description of the rental - type of vehicle, mileage
For Lodging and Cruise Line:
· The date of the stay including room rate, taxes, food and beverage charges and incidental charges
For Airline and Passenger Railway:
· The address to which the ticket was mailed
· The passenger name
· The travel agent name and location
· The airline flight or railway itinerary information
For Transaction Completed at Self Service Terminals:
· The self service terminal locations code or city and state
For Transactions Completed at an Automated Fuel Dispenser:
· The service station identification number
· The invoiceltransaction reference number.
16
Discover Business Services Merchant Operating Regulations - Revised 09/02
8.2
e
e
e
Chargebacks
Under certain circumstances we may return a Card sale to you as unpaid, or we may return a previously paid Card sale to
you for repayment to us. These returned charges are called "Chargebacks." If a billing error is asserted by a Cardmember
with respect to a Card sale, or if a Cardmember complains to us about goods or services purchased with the Card from your
establishment, you agree to act in good faith to attempt to resolve the problem with the Cardmember. If the Cardmember
refuses to pay us for goods or services due to a dispute, we may process a Chargeback for the charge or disputed portion
of it. If we are involved in a lawsuit with a Cardmember relating to a Card sale made at your establishment, you agree to
cooperate with us and to provide any assistance that we may reasonably require. If you do not follow all the terms of the
Agreement and these Operating Regulations when making a transaction with a Card, or if a Card sale which is the subject
of a billing dispute or other dispute is subject to Chargeback as specified in these Operating Regulations or the Agreement,
we may refuse to pay you for the Card sale or the disputed portion of it. If we have already paid you, you must immediately
pay the amount you owe us on demand, or we may deduct the amount in question from your Settlement Account or from
future payments that we would otherwise owe you. We will notify you of Card sales that are subject to Charge back as they
arise, but in some instances Chargebacks may be processed prior to notification as specified in these Operating Regulations.
If you and a Cardmember resolve a billing inquiry or dispute on a Card sale which has been charged back, and we are
permitted by law to rebill the Cardmember for all or a portion of the disputed amount, we will reimburse you for that
portion of the Charge back which we can rebill the Cardmember, provided you request such reimbursement within 90 days
from the date of the Chargeback. If, due to federal and/or state laws, the issuer of the Card is not permitted to rebill a
Card member for all or a portion of a disputed transaction, we will not be required to reimburse you for the Chargeback,
even if you have complied with the terms of the Agreement. If you fail to follow your Agreement or these Operating
Regulations, we may Charge back a Card sale to you within the later to occur of: 180 days after the date that you submit
Sales Data to us for the corresponding Card sale, or 90 days after your final and complete delivery of the goods or services
purchased in the corresponding Card sale. Notwithstanding the periods described above, we may ask you to provide
supporting documentation for the following Chargeback reason codes: DP (Duplicate Processing), RG (Non-receipt of
Goods), RM (Disputes Merchandise/Services), RN (Non-receipt of Credit) and UA (Unauthorized Purchase). If you fail to
reply or if the documentation that you provide does not support the validity of the transaction, we may process an
adjustment to your account as described in Section 7.2.1. Information about Chargebacks in connection with your
Merchant account will be sent to you directly. Inquiries regarding Chargebacks and/or adjustments to your account should
be directed to us at 1-800-347-2000. It may be necessary for you to provide documentation to us in order for us to resolve
Cardmember problems and disputes. All original documentation (Credit slips and Sales slips) must be retained by you for
210 days from the transaction date or 180 days from the date of submission of Sales Data to us, whichever is later. If you
deliver or transmit Sales Data to us in electronic form, you must keep microfilm or other copies of each Sales slip and each
Credit slip for no less than three (3) years from the date of the transaction.
8.2.1
8.2.2
8.2.3
Excessive Chargebacks
If you have Chargebacks that exceed 2 % of the total number of Card sales submitted by you during any three-
month period or any other percentage of your Card sales that we consider ordinary and reasonable for your
industry, we may at our option assess a fee in the amount of $25 for each Charge back. If we believe any of your
locations has a percentage of irregular or fraudulent transactions that is in excess of what we believe to be an
ordinary and reasonable amount, we will place the location on a watch program, and suggest methods for you to
reduce the level of fraud or irregular transactions. If you are unable to reduce such irregular transactions, we may
Charge back any transactions we receive from you that we reasonably believe are irregular, and we may terminate
your Agreement with us in accordance with the appropriate provisions of the Agreement.
Immediate Chargebacks
We may, at our discretion, Chargeback transactions to you immediately. We will notify you of the immediate
Charge back by mail, fax, electronically or other method. Reasons for Immediate Charge back are listed below.
Code Definition Explanation
CV Full Contents of Magnetic The transaction involves a counterfeit card with an
Stripe Not Included in altered magnetic stripe and/or the full contents of the
Authorization Request magnetic stripe including the Card Verification Value
were not present in the authorization request received
by us.
The purchase was completed after the Card issuer provided a
declined authorization decision.
The Card transaction was processed using an expired Card.
The Sales slip provided in response to a Ticket Retrieval
request is not legible.
The time from transaction date to date of processing
exceeds the 60-day limit allowed by us, and the transaction
cannot be promptly collected from the Cardmember.
The Sales Data was not provided within 15 Business
Days in response to Ticket Retrieval request.
A transaction requiring an authorization decision was split into
two or more Card sales to avoid authorization, and had the
transaction been submitted for authorization, it would have
been declined.
Service Establishment The Merchant violated general operating procedures not
Adjustment covered by other codes. A detailed explanation will be provided.
Note: Not all Charge back reason codes are applicable to all industries.
DA
Declined Authorization
EX
IC
Expired Card
Requested Item
Illegible Copy
Late Presentation
Transaction
LP
RI
Non-Receipt of
Requested Item
Split Sale
55
TF
Pending Chargebacks
A pending Charge back notice will be provided to you in certain instances. We will notify you of the pending
Discover Business Services Merchant Operating Regulations - Revised 09/02
17
8.3
8.4
Chargeback by mail, fax, electronically or other method. You have 15 Business Days from the notice date to respond
satisfactorily before we take action to collect the amount of Chargeback from you. During the notice period, you
should resolve the reason for dispute directly with the Cardmember, in order to avoid responsibility for the Chargeback.
You must then notify us of the resolution as instructed on the pending Charge back notification form to avoid the
Charge back. Charge back reasons for which we will provide a pending Charge back notice are listed below.
Code Definition Explanation
AL Airline Transaction Dispute The Cardmember is disputing an airline transaction in one of the
following situations and has attempted and failed to resolve the
dispute directly with the airline:
a) Cardmember billed for two transactions, only took one trip-
did not travel with companion, ticket numbers are different.
b) Cardmember did not receive Credit from lost ticket
application/refund application.
c) Cardmember purchased first class ticket and was either
"bumped" or downgraded to coach.
d) Other disputes, excluding Cardmember inconvenience, with
appropriate documentation.
The Cardmember claims that the purchase amount agreed to by
the Card member was altered after the Cardmember signed the
Sales slip and without the Cardmember's consent or direction.
Only the difference is charged back.
The Cardmember was charged for a Sale rather than a Credit.
The Cardmember was charged more than one time for a single
transaction.
The transaction is at or above the Merchant's
assigned Floor Limit and required authorization was not
obtained and Card transaction cannot, for whatever reason, be
promptly collected from the Cardmember.
The Cardmember was charged for a cancelled reservation.
The Sales slip is missing the Cardmember's signature and the
Cardmember does not recognize the Card sale.
The Cardmember was charged for goods or services but never
received the goods or services or cancelled the transaction.
The Cardmember disputes the quality of
merchandise purchased or service rendered or any portion
thereof.
The Cardmember claims that a Credit issued by the Merchant
never posted to the Card Account.
The Sales slip is not imprinted with the Card Account number:
Cardmember does not recognize Card sale.
Neither the Cardmember nor any party authorized by the
Cardmember participated in the transaction and Cardmember
has no knowledge of the transaction.
Note: Not all Chargeback reason codes are applicable to all industries.
AW
CD
DP
EF
HC
IS
RG
RM
RN
SI
UA
Altered Amount
Credit Posted as Sale
Duplicate Processing
Transaction Exceeds
Floor Limit
Reservation Cancellation
Missing Signature
Non-Receipt of Goods
Cardmember Disputes
Merchandise/Service
Non-Receipt of Credit
No Imprint on Sales Slip
Unauthorized Purchase
Reversal of Chargebacks
If you were unable to resolve the dispute with the Cardmember within 90 days from the date of Charge back and you believe
that your response to the Charge back notice did not consider facts or information now available to you, you may request
a Chargeback reversal from us. We will review all relevant facts and circumstances available to us that pertain to you and
the Cardmember and we will, at our discretion, determine whether to reverse the Chargeback. We will at our sole discretion,
grant a Charge back reversal only if: 1) applicable law permits the issuer to rebill the Cardmember for the underlying Card
transaction; and 2) the Merchant has provided new information or information not available at the time of the original
Charge back. If we determine that a Charge back will be reversed, we will issue a credit to you and take action to collect such
amounts from the issuer. You may not submit a new Card sale in an identical amount in order to recover for a Card
transaction that has been charged back. You may request a reversal of a Chargeback by submitting a copy of the original
Sales slip together with your explanation of the circumstances of the dispute to us. Such requests should be sent to:
East of the Mississippi: West of the Mississippi:
Discover Business Services Discover Business Services
Merchant Services Center Merchant Services Center
P.O. Box 3011 P.O. Box 52145
New Albany, OH 43054-3011 Phoenix, AZ 85072-2145
Chargeback of Card Not Present Sales
Compliance with the following requirements may help prevent Charge backs, depending on the reason for the dispute. If
these requirements are not followed when applicable, your Card sales may be subject to Charge back. While following the
requirements indicated below may help protect you, this is not a guarantee and you may still receive Chargebacks for other
reasons.
. For Internet Card transactions, you must comply with the Address Verification Procedures in Section 4.4.10. For
mailltelephone order Card sales and Card sales over the Internet, you must comply with the requirements in Sections 5.1
and 5.2.
18
Discover Business Services Merchant Operating Regulations - Revised 09/02
. As described in Section 5.1, one of the following is the only acceptable proof of delivery for mail/telephone order Card
sales: a valid Cardmember signature if the delivery is made to the Cardmember or if the Cardmember requests delivery
to a third party, the signature of a party designated by the Cardmember.
. As described in Section 5.1, a valid Card must be presented when a Cardmember picks up merchandise ordered by
telephone or mail. An imprint of the Card and Cardmember signature must be obtained at that time.
e
9.0
MERCHANT FEE AND OTHER FEES
9.1 Merchant Fee and Other Fees
In consideration for your participation in the Card program, you agree to pay fees to us in the amount indicated by us in
writing, including in your Agreement or Disclosure Letter, as evidenced by our records. The fees payable by you consist of
some or all of the following: (a) a percentage of the Card sales accepted by you, either Gross Card Sales or Net Card Sales,
as described in Section 9.2.1; (b) a Per Transaction Fee as described in Section 9.2.2; (c) Submission Error Fees as described
in Section 9.3; (d) fees for services that you elect to receive from us, and (e) other fees payable by you, as indicated in our
records, including, without limitation, application and set-up charges. The fees described in (a) and (b) above are collectively
referred to as the" Merchant Fee".
If you receive daily or monthly activity reports, these reports will indicate the type of fees that you are required to pay, the
method that we use to calculate your Merchant Fee and the amount of fees payable by you, including Merchant Fees and
Submission Error Fees. If you receive daily or monthly summary reports, these reports will provide the total amount of fees
payable by you, including Merchant Fees and Submission Error Fees.
When we establish your Merchant Fee, we rely on information that you provide in your application including, your
expected volume of Card sales and average transaction amount. If our experience with your Merchant account materially
varies from the information in your application, we may increase or change your Merchant Fee.
9.2 Calculating Your Merchant Fee
Your Merchant Fee is calculated using the method(s) indicated in our records for your Merchant account.
Minimum Fee
If Merchant Fees that you owe in any calendar month are less than the minimum fee identified in your Agreement,
Disclosure Letter or in other written notice from us ("Minimum Fee"), you agree to pay an additional amount
equal to the difference between the actual Merchant Fee that you owe for the calculation period and the Minimum
Fee.
Submission Error Fees
You may be obligated to pay an additional transaction fee ("Submission Error Fee") if certain Card transactions do not comply
with your obligations in the sections of the Operating Regulations listed below ("submission errors"). You will receive written
notice from us of the submission errors that apply to your Card transactions and the amount of Submission Error Fees. If you
receive daily or monthly activity reports, these reports will indicate the type of submission errors and the amount of the
Submission Error Fees that apply to your Card transactions, the number of the submission errors during the calculation period
and the total amount you owe for Submission Error Fees. If you receive daily or monthly summary reports, these reports will
provide only the total amount of Submission Error Fees. The types of submission errors are identified below:
. Voice Usage: Use of a Merchant Services Representative rather than an electronic terminal, POS device or our automated
service to obtain authorization or address verification (See Section 4.4.4);
. Required CVV Missing or Incomplete: Failure to transmit Card Verification Value ("CVV") data with an authorization
request (See Section 4.4.1);
. Required CID Missing or Incomplete: Failure to transmit Card Identification ("CID") data with an authorization request
(See Section 4.4.1);
9.2.1
e
9.2.2
9.2.3
9.2.4
9.2.5
9.3
e
Calculating the Percentage Portion of Your Merchant Fee
If applicable, the percentage portion of your Merchant Fee is calculated as described below. We multiply the
percentage indicated in your Agreement, Disclosure Letter or otherwise in our records, by the Gross Card sales or
Net Card Sales accepted by you. "Gross Card Sales" means the total dollar amount of Card sales you have
transmitted to us during the calculation period which may be monthly, daily or another period upon which we
have agreed. "Net Card Sales" means the total dollar amount of Card Sales you have transmitted to us during the
calculation period which may be monthly, daily or another period upon which we have agreed, less an amount
equal to the sum of: Credits, Chargebacks and adjustments (See Section 7.2.1). We will notify you in writing of,
and our records will indicate, the percentage amount that you are obligated to pay and whether this portion of
your Merchant Fee is calculated based on Gross Card Sales or Net Card Sales.
Calculating Your Per Transaction Fees
If you are required to pay a fee on each Card transaction as part of your Merchant Fee ("Per Transaction Fee"),
we will calculate the amount that you owe for Per Transaction Fees as follows: we will multiply the amount of
your Per Transaction Fee indicated in your Agreement, Disclosure Letter or written notice from us as indicated in
our records, by the total number of Card sales, or Card transactions, as applicable, that you transmitted to us
during the calculation period.
Different Calculation Methods
If your Merchant Fee is calculated using a method other than those specified in this Section 9.2, this method will
be described in your Agreement and you will pay us an amount we determine by applying such other method. This
method may be changed at our discretion upon written notice to you.
Variable Merchant Fees
If your Merchant Fee varies based on the type of Card involved in each Card transaction, the amount of each
applicable Merchant Fee will be identified in your Agreement, Disclosure Letter or otherwise in written notice from
us.
Discover Business Services Merchant Operating Regulations - Revised 09/02
19
· Required AVS Not Obtained: Failure to obtain address verification (See Section 4.4.10);
· Stale Transaction: Failure to transmit Sales Data by the submission deadline (See Section 7.1).
9.4 Collecting Your Fees
We will calculate and collect the amount of the fees that you owe us, including, without limitation, the Merchant Fee and
the Submission Error Fees, if any, on a daily, monthly, or other applicable period basis, depending on your method of
Settlement. If we collect your Merchant Fee monthly, or on any basis more frequent than monthly, we may upon thirty (30)
days' notice to you, convert you to a more frequent Merchant Fee collection, including, without limitation, converting you
to a daily Merchant Fee, if, at our sole judgment, we believe your financial condition warrants it or if you have previously
failed to satisfy any obligation to us in a timely manner, as provided herein. We may use any or all of the following means,
at our discretion and not necessarily in the order listed below, to collect the Merchant Fee and Submission Error Fees
payable by you: debit your Settlement Account, offset the total Merchant Fee and Submission Error Fee for a calculation
period from the Settlement amount we would otherwise pay you, or you will pay us any amounts that you owe us on
demand.
9.5 Other Fees
If we incur any costs as a result of the exercise of our rights under the Agreement and/or Operating Regulations, we may
require you to reimburse us for such costs, which may include, but are not limited to, fees associated with the method that
we use to pay Settlement amounts to you.
In addition to the above-referenced fees, you further agree to pay us as indicated in Section 9.4 for any excessive Chargeback
fees, fixed monthly fees, per-transaction fees and other fees that you have agreed to pay us, as set forth in your Agreement,
Disclosure Letter, these Operating Regulations and/or as reflected in our records.
10.0 FRAUD PREVENTION
10.1
10.2
We have taken precautions to protect Merchants and Cardmembers from fraudulent Card usage. By following the terms of
these Operating Regulations and the Agreement, you will protect the interests of your business and those of your valued
customers.
Recovery of Lost or Stolen Cards
Rewards may be given in the form of cash or a Discover@ Gift Card for the recovery of lost or stolen Cards. You may
qualify for a reward when, upon instructions from us, you recover and return to us an unexpired Card or upon your own
initiative, you alert us of a suspicious Card or transaction using the "Code 10" Authorization procedures described in
Section 4.5, and are instructed by us to recover an unexpired Card, and return the Card to us. We will keep a record of all
requests to recover Cards, indicating if you qualify for a reward. All rewards will be paid to you, unless otherwise agreed
upon. Rewards are paid only upon recovery of a Card in the course of its attempted use at a Merchant location and upon
instructions from us to recover the Card. No rewards are paid for the return of Cards lost or left at a Merchant location,
or Cards found by you, citizens or police officers that have been lost or misplaced by Cardmembers. To return a Card and
apply for a reward, complete the form at the end of this booklet, cut the Card in half, attach it to the form and mail to:
East of the Mississippi: West of the Mississippi:
Discover Business Services Discover Business Services
Attn: Dept. R Attn: Dept. R
P.O. Box 3012 P.O. Box 29024
New Albany, OH 43054-3012 Phoenix, AZ 85038-9024
If the form at the end of this book is missing, please provide the following information on a plain piece of paper, cut the
Card in half, attach it to the piece of paper and mail to the above address:
· Merchant Name
· Store Number
· Merchant Address, City, State and ZIP Code
· Merchant's Federal Tax ID Number (required to process reward check)
· Merchant Telephone Number
· Merchant Number Assigned by Us
· Recovered Card Number
· Recovery Date
· Cardmember Name
· Reason for Recovery
· Clerk's Name and Social Security Number (required to process reward)
Reminders for Preventing Fraudulent Card Usage
In addition to following proper authorization procedures, you and your employees should pay careful attention to both the
customer and the Card presented. In particular, you should keep the following in mind at every transaction:
· Make sure that the Cardmember's signature on the Sales slip matches the signature on the back of the Card. If the
signature on the back of the Card does not match the signature on the Sales slip, please call us at 1-800-347-1111 and
ask for a "Code 10" authorization (see section 4.5 for further instructions). Check the signature panel for signs of erasure
or alteration. Do not accept the Card if the word "void" appears in the signature panel.
· Check the Card expiration date.
· Examine the Card for signs of alteration (see section 2.2). Check the features on the Card to ensure that they are valid,
including, without limitation, checking Cards to determine if the stylized "D" is present.
· If you have any doubts about the validity of the Card or the customer, review additional identification from the presenter.
20
Discover Business Services Merchant Operating Regulations - Revised 09/02
10.3
e
10.4
e
. If you are using an electronic terminal and printer to process transactions, verify that the Card Account number printed
on the receipt matches the Card Account number embossed on the front of the Card.
. Follow procedures for Address Verification if Card Not Present (see section 4.4.10).
. Enter the three-digit CID for all transactions that cannot be swiped.
Factoring
. What is factoring? Each year, Merchants experience losses after factoring Card sales. Factoring is a fraudulent activity in
which the Merchant deposits Sales Data originating from another business. This activity is outside the scope of the
Agreement.
. Who is involved in factoring? The most common scheme involves a party who offers a percentage of the Sales Data
deposited by the Merchant.
. What are the problems involving factoring? The main problem arises when a customer expresses a complaint or
dissatisfaction with the service supplied by the third party. Should this happen, the Card sale will be charged back to the
Merchant who submitted the sale. This means if you deposit Sales Data for Card sales accepted by a third party, you will
suffer any losses associated with these Card sales. Also, if any fraud is involved, you could face criminal prosecution.
. How could factoring affect my standing with Discover Business Services? Factoring is prohibited under the terms of your
Agreement and may result in financial losses to you. It is grounds for, and will result in, immediate termination of our
Agreement with you.
. What should I do if I am approached to factor sales for someone? If you are approached by anyone asking you to factor
Sales Data for them, please notify our Security Department immediately at 1-800-347-3083.
Type of Business
10.4.1 Changes in Business
We have considered your application for a merchant account and proposed the terms of the Agreement based upon
the information you provided in your application, including the type and kind of business you conduct. You must
notify us immediately if you engage in, or in the future elect to engage in, any new lines or types of business
activities not disclosed on your application or you materially change your business activities. You also must notify
us immediately in writing or by calling 1-800-347-2000 under each of the following circumstances:
· Change of ownership
· Change in type or kind of business
. Change in your Merchant Category Code
· Change in business name or address
· Change in Settlement Account for Card transactions
. Change in your third-party processor or terminal provider
· Closing your business entirely or any locations
. Change in your processing method (for example, changing from paper slips to electronic terminal)
· If you are or become a party to a voluntary or involuntary bankruptcy case.
· Change in the federal tax identification number of the Merchant listed in our records
. Entering into a loan agreement with a third party that seeks to affect the Agreement or change Settlement directions
. Change to the entity that is a party to the Agreement or entities listed in our records, including by merger or
acquisition
· Change to or from a business that conducts exclusively retail sales to one that accepts Card sales by mail,
telephone order or Internet transactions.
10.4.2 Failure to Notify
If you fail to notify us, where required by the Agreement or Operating Regulations, we may terminate the
Agreement. In addition, we may reject or Charge back any Card sales related to a new business activity about
which we have not been notified. We may charge you a different Merchant Fee for any Card sale related to any of
your new business activities if we elect to accept that Card sale or type of business as a Merchant.
10.4.3 Ineligible Merchant Categories
As described in the Agreement, we may, from time to time, identify types of businesses that are not eligible for
Merchant accounts for reasons including the nature of the business or excessive risk. We may terminate your
Agreement immediately if we, at our discretion, determine that you are accepting Cards in connection with the
operation of any of the following types of businesses: collection agency; debt consolidation service; credit reporting
service; credit cleansing service; the sale of any goods or services using deceptive practices; any goods or services
similar to those described above; any other activity or service deemed illegal by any U.S. federal, state or local law,
statute or regulation.
11.0 MERCHANT SUPPORT
11.1
e
Merchant Assistance
Discover Business Services offers toll-free telephone assistance for all supply orders and general inquiries Monday through
Friday from 8:00am to 8:00pm Eastern Standard Time at 1-800-347-2000, except on certain federally-recognized holidays.
Additionally, our Authorization and Address Verification services are available 24 hours a day, 7 days a week. Trained
personnel are available to provide you with the service you need. Our Merchant Services Center may also be reached by
mail at the following address:
East of the Mississippi:
Discover Business Services
Merchant Services Center
P.O. Box 3011
New Albany, OH 43054-3011
West of the Mississippi:
Discover Business Services
Merchant Services Center
P.O. Box 52145
Phoenix, AZ 85072-2145
Discover Business Services Merchant Operating Regulations - Revised 09/02
21
11.2 Supplies
As a Merchant, you will receive the necessary forms for your Card transactions. If you send your paper transactions to us
for processing, you will also receive a Merchant identification plastic. Additional forms, transmittal envelopes, door decals
and signage are available at no charge. Supplies can be ordered online by visiting our website at www.discoverbiz.com or
by calling our Merchant Services Center at 1-800-347-2000.
11.3 Online Services
Our Internet site can be found at www.discoverbiz.com.This site provides you with tools to help you run your business
more efficiently and effectively. Some of the many features included on this site are as follows:
· Review your periodic reports
· Order supplies and signage
· Submit questions or suggestions to Merchant Services at your convenience
· Learn about special promotions and offers
· Access reference materials
· Learn of the latest news about Discover Business Services
11.3.1 When using this service. please use the following guidelines within your business:
· Prevent unauthorized access to Discoverbiz.com by protecting your Login ID and PIN.
· Periodically review your list of authorized users on Discoverbiz.com to ensure it is current and accurate.
11.4 Notices
Notices to us required under the Agreement should be sent to:
Sr. Vice President, Merchant Operations
Discover Business Services
2500 Lake Cook Road
Riverwoods, IL 60015-3800
You must send us notice of any of the conditions described in Section 1004.1. We may provide notice of changes to your Agreement
to you at the address indicated in our records and using the process described in the Agreement or we may send notices to you
using any method of transmission, including, without limitation, U.S. mail, overnight service, facsimile and/or electronic mail.
11.5 Call Monitoring
You agree that we may monitor and/or record our telephone calls with you for quality assurance and training purposes.
12.0 CONFIDENTIALITY AND DATA SECURITY
12.1
Definition of Confidential Information
12.1.1
12.1.2
During the negotiation or during the term of the Agreement, you, your employees, officers, directors and agents may
have access to and receive disclosure of Our Confidential Information. "Our Confidential Information" means
information provided by or with respect to: us, our parent, subsidiaries or affiliates or Card issuers (in each case, "Our
Disclosing Party") including, but not limited to, the following (collectively, "Our Confidential Information"):
12.1.1.1 personal, biographical and other information about Cardmembers, including without limitation,
names, addresses, telephone numbers, credit information, Card transaction history and patterns,
whether in discrete or collective form; information about individual and collective Card Accounts,
including, without limitation, the available credit on Card Accounts, credit limits on Card Accounts,
Card transaction history and the terms of Cardmember agreements with Card issuers; Card Account
information, including the following in discrete or collective form or as lists: Card Account numbers;
Card identification numbers ("CID"), Card Verification Value ("CVV") data, Card transactions by
individual and collective Cardmembers; Card transaction information, including, without limitation,
the contents of Sales Data, and the Merchant account numbers assigned by us;
12.1.1.2 information provided by or regarding Card issuers, including, without limitation, the contents of each
authorization request and authorization decision, the reason for any authorization decision by the
Card issuer; discrete and collective information regarding Cards issued by individual issuers; and the
identity of issuers;
12.1.1.3 any of the following of or related to Our Disclosing Party: objectives, marketing philosophy, strategy
and goals, technological developments, business procedures, competitive advantages and
disadvantages, market share, market penetration of Our Disclosing Party, customer names and
addresses, methods of operation, financial results, technological developments, information
maintained on our systems; types and brands of equipment, accessories, collateral materials and other
technology used by Our Disclosing Party; and any other written or verbal information considered
confidential and/or proprietary by Our Disclosing Party that is revealed or obtained in the course of
or in connection with the negotiation and/or performance of the Agreement.
Your Confidential Information. In performing our obligations pursuant to this Agreement, we may have access to
and receive disclosure of certain confidential information about you, your affiliates and/or parent companies
("your Disclosing Party"), including, but not limited to the following (collectively, "your Confidential
Information"):
12.1.2.1 any of the following information, whether in discrete or collective form: customer names and
addresses, vendor names and addresses;
12.1.2.2 any of the following information: your sales volume, merchandise mix, market share and amount of
average sale;
22
Discover Business Services Merchant Operating Regulations - Revised 09/02
12.2
e
12.3
--
12.4
12.5
e
12.6
12.1.2.3 your financial results, technological developments, marketing philosophy and objectives, competitive
advantages and disadvantages and other information regarding the business and affairs of Your
Disclosing Party that you reasonably consider to be confidential and proprietary.
Restrictions on Disclosure of Confidential Information
12.2.1 Your Obligations
You agree, on behalf of yourself, your parent(s), affiliates, subsidiaries, directors, officers, employees, agents and
representatives, to maintain the security procedures described in Section 12.6 to maintain the confidentiality of Our
Confidential Information. You also agree on behalf of yourself, your parent, affiliates, subsidiaries, officers, directors,
employees, agents and representatives that, during the term of the Agreement and thereafter without limitation:
12.2.1.1 You shall maintain Our Confidential Information as strictly confidential and not disclose any of Our
Confidential Information to any of your affiliates, subsidiaries, parents, partners, shareholders,
directors, officers, other than as permitted in Section 12.3.
12.2.1.2 You shall use Our Confidential Information for the sole and exclusive purpose of complying with your
obligations under the Agreement and Operating Regulations.
12.2.1.3 You shall not disclose any of Our Confidential Information to any third party, including, without
limitation, your own shareholders.
12.2.1.4 You acknowledge and agree that Our Confidential Information is our exclusive property. You agree
not to compile, analyze, assemble or otherwise manipulate any of Our Confidential Information for
any purpose and shall not permit any third party to do so using information provided by you.
12.2.1.5 You agree that Card Account numbers and Merchant account numbers constitute our property. You
agree not to sell, distribute or otherwise provide any such Card or Merchant account numbers to any
other party, except to effectuate the terms of this Agreement. You also agree to dispose of any
materials containing such Card and Merchant account numbers in a manner that will cause such
account numbers to be substantially unreadable.
12.2.1.6 You agree not to collect, use or disclose any of the information described in Section 12.1.1, including,
without limitation, that which relates to Cardmembers, Card transactions or Card Accounts, to any
third party, including, your own shareholders, affiliates, directors, officers or employees (other than as
explicitly permitted in Section 12.3.
Exclusions.
Our Confidential Information and Your Confidential Information shall not include information: (i) which is known to the
receiving party prior to commencing any discussions with the other party on the subject matter of this Agreement and
without violation of any obligation of confidentiality; or (ii) which is or becomes known to the public generally through no
fault or action of the receiving party; or (iii) is lawfully revealed to the receiving party without violation of any obligation
of confidentiality; or (iv) is developed by the receiving party as a result of its own internal efforts and not as a direct or
indirect result of the disclosure of information by the disclosing party.
Nondisclosure of Confidential Information
Each party agrees not to use the other party's Confidential Information nor to disclose such information to any third party,
except: (i) as may be necessary for the receiving party to perform its obligations pursuant to the Agreement; (ii) as required by
law; or (iii) as agreed upon in writing by the parties; or (iv) as permitted by Section 12.3. If either party as the receiving party
shall disclose the disclosing party's Confidential Information to a third party pursuant to the Agreement, the receiving party
shall cause the third party to agree to the confidentiality provisions set forth in the Agreement, and the receiving party shall
remain responsible for any subsequent disclosure of such Confidential Information by such third party, including, without
limitation, any disclosure by the third party to any other party that is not authorized to receive such Confidential Information.
Without limiting the foregoing provision, you may reveal Our Confidential Information only to those of your directors,
officers or employees of any of your operating divisions or subsidiaries which you have designated either in your application,
as modified from time to time as indicated in our records, as your locations that will accept the Card and who are engaged
in the implementation of policies, programs or procedures in connection with your acceptance of the Card.
We will reveal Your Confidential Information only to those of our directors, officers or employees of any of our divisions,
subsidiaries or affiliates which are involved in the development of the Card program and who are engaged in the
implementation of policies, programs or procedures in connection with your acceptance of the Card or who perform certain
research and analysis of data related to the Card Program. In addition, we may reveal Your Confidential Information in
order to comply with our obligations under applicable law.
Ownership.
Each party shall retain exclusive ownership of its Confidential Information. Upon request or following termination of the
Agreement, each party shall return the other party's Confidential Information. Each party acknowledges the irreparable
harm that would be caused to the owner of Confidential Information if such Confidential Information were used or
disclosed in violation of these agreements. Each party, as the recipient of the other party's information, agrees that if the
recipient of such Confidential Information violates the terms of this Section 12.0, the owner of such Confidential
Information may terminate this Agreement immediately, and, in addition to other rights and remedies the owner of such
Confidential Information may have, the owner of such Confidential Information shall be entitled to seek injunctive or
other equitable or legal relief to prevent any continuing violation. Any violation of this Section 12.0 shall be considered a
material breach of the Agreement that is grounds for immediate termination of this Agreement. The provisions in Section
12.0 shall survive the termination of the Agreement.
Data Security
You agree to comply with our security and encryption procedures for Card transactions, as described below. While we may, at our
discretion, review some of the security or encryption procedures used by some Merchants as described below, you are solely
responsible for monitoring your systems and procedures including, without limitation, to ensure compliance with our requirements.
You must store all unencrypted data regarding Card transactions, Card Verification Value ("CVV") information, including
without limitations, such data associated with Card transactions conducted over the Internet, by mail and telephone, in a
Discover Business Services Merchant Operating Regulations - Revised 09/02
23
secure environment that is protected by firewalls from your website and access by third parties over the Internet. You shall
make sure that access to Card transaction data, CVV data is password protected using password requirements, limited to
those of your employees who perform your obligations under this Agreement and that you promptly revoke password access
following termination of any employee. Unencrypted Sales Data, CVV data may not be stored on your Internet Web Server.
You agree to notify us within 48 hours if there is a breach in any of your systems used to conduct Card transactions or store
Card data including, without limitation, your website, the encryption of data for any Card transaction or group of Card
transactions, the electronic links used to conduct Card transactions, including, without limitation, any breach that may
cause any unauthorized party to access Cardmember numbers.
The content of all web sites on the Internet on which you accept Internet Card transactions must be secure and must comply
with our security requirements including, without limitation, the following: pages on the websites where Card numbers are
entered must comply with our protocol, you may not reveal user names and passwords for Cardmembers in the source code
of your website and you may not allow anonymous logins on your website. You agree that we may, at our discretion,
periodically perform data security scans on your website and/or servers to ensure that you are complying with our security
and encryption requirements. Such data security scans may include passive Internet scans to detect open ports and services
being offered by the web servers. The security scans may also examine the presence and effectiveness of the encryption
methods that you use to encrypt Card transactions conducted over your website.
If we notify you that we believe your security procedures used to conduct Card transactions are insecure or do not comply
with our requirements (For example: if our passive security scan detects an open port on your website, or we identify
procedures that we believe may lead to the compromise or unauthorized access to Card transaction data or Cardmember
numbers or we determine that your firewall is inadequate), you agree to cooperate with us to adopt security procedures that
are acceptable to us by a mutually acceptable deadline and to participate in periodic tests of the adequacy of such procedures.
We may, at our discretion, suspend your ability to accept Card transactions over the Internet or your website upon notice
to you until such time as we determine that your security procedures and/or website comply with our requirements. If you
fail to develop security procedures that meet our requirements by a mutually acceptable deadline, we may terminate the
Agreement and your ability to accept Cards. You are responsible for any Charge backs due to your failure to comply with
our security and encryption requirements and any losses experienced by Card members and by us as a result of your failure
to comply with security and encryption requirements for Card transactions.
12.7 Storage of cm Numbers
You must transmit the three-digit CID to us in the authorization request for all Card transactions that are not swiped
through your terminal or POS device, as described in Section 4.4.1. Please note that you may not retain any CID data for
any Card transaction or any Cardmember, in your records or otherwise, for any reason. Furthermore, the CID may not be
recorded on Sales Data or any other evidence of the Card transaction.
13.0 ADVERTISING AND PUBLICITY
13.1 Limited Permission to Use Service Marks
We permit you, for the limited and exclusive purpose of completing your obligations under the Agreement, to use the
following service marks: "Discover Card"; "NOYUS" and such other service marks as may be associated with the Card
plan in your advertising and marketing materials that are designed to promote Card acceptance and the Card plan, provided
that such marks are displayed in accordance with the specifications provided by us from time to time which you may find
on Discoverbiz.com. This permission does not extend to service marks owned or licensed by third parties, including, without
limitation, any Card issuers.
13.2 Prior Approval Required for Use of Service Marks
Except as otherwise stated in the Agreement or these Operating Regulations, neither you nor we shall use the registered
trademarks, servicemarks, logos or any other proprietary designations that are owned or licensed by the other party
(collectively, referred to as the "Owner") without the Owner's prior written consent and shall submit to the Owner for prior
written approval any advertising or other materials in which such proprietary designations are to be used. Such approval
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, we shall not be required to obtain your
approval with respect to advertising and promotional materials which merely list name(s) of Merchants that accept Cards.
13.3 Display of Materials
You agree to prominently display at each of your locations advertising and promotional materials relating to the Card plan
in such manner and with such frequency as accorded any other third party credit or charge Card accepted by you, including,
without limitation, the display of "Take-One" applications. You agree that you will only use or display such materials in
accordance with these Operating Regulations or in accordance with any specifications provided by us. We shall, at our
expense, supply advertising and display materials and such other operating forms and materials necessary to promote the
Card and make Card sales. Such materials, including complete and unused Sales slips and Credit slips are our property and
shall be returned upon our request or at the termination of the Agreement.
13.4 Prior Consent for Press Releases
You agree to obtain our prior written approval before making any disclosure to the public or the media, whether in the form
of a press release or otherwise, concerning Cards, any Card plan, Card issuers, Our Disclosing Party, the Card plan or the
execution or existence of this Agreement, any such disclosures required by applicable law, including, without limitation,
securities law, and the timing and content of such disclosure must be mutually agreed to by the parties. The Agreement and
Operating Regulations do not permit you to make any disclosure to the public or the media on behalf of Our Disclosing Party.
14.0 FINANCIAL INFORMATION
At our request, you agree to provide us financial information, including, without limitation, financial statements concerning
you and/or your establishment's financial condition and general creditworthiness, and you and/or your establishment's
ability to perform your obligations under this Agreement. You agree to immediately send us written notice if you become
insolvent or discontinue your business or if you or any creditor files for bankruptcy or reorganization. We may request credit
reports on the principals of the business, corporations and companies of said Merchant companies.
24
Discover Business Services Merchant Operating Regulations - Revised 09/02
PLEASE USE THIS FORM To RETURN DISCOVER CARDS
Merchant Name
Store Number
e
Address
Federal Tax ID #
City
State
Zip Code
Phone Number
Merchant Number
6011
Captured Card
6011
Cardmember Name
Reason for Recovery
Clerk's Name
Social Security Number
-
Discover Business Services
Attn: Dept R
P.O. Box 3012
New Albany, OH 43054-3012
d Attach Here
Mail To:
If Merchant location is East of the Mississippi
River:
If Merchant location is West of the Mississippi
River:
Discover Business Services
Attn: Dept R
P.O. Box 29024
Phoenix, AZ 85038-9024
e
www.discoverbiz.com
DlsceVERO
BUSINESS SERVICES
@ 2002 Discover Financial Services, Inc.
IOP32310 9/02