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Merchant Services Agreement
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City State
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Zip Code
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In this Agreement, the words "you" and "your" mean the merchant that
has received and agreed to the terms of this Agreement; the words "we';
"our;' "Discover Business Services;' and "us" refer to Discover Financial
Services, Inc.; "Business Day" refers to Monday through Friday except
when we are closed for business: "Card" means: (i) a valid credit, charge
or other card bearing a Discover Card or NOVUS logo, service mark or
trademark identified in Discover Business Services' Operating Regulations for
merchants or as otherwise approved in writing by us; or, (ii) the Card
Account if the Card member is not present at a physical location; "Card
Account" means the credit account represented by the unique sixteen digit
account number assigned by the issuer which the Cardmember may use
as permitted by the issuer; "Card member" means a person to whom a
Card has been issued and/or any authorized user of a Card; "Operating
Regulations" refers to our Operating Regulations for merchants; and
"Sales Data" means evidence of Card transactions, whether in paper,
magnetic or electronic form, that is received by us in the form and format
that we specify. Unless the context clearly indicates otherwise, words used
in the singular include the plural and words used in the plural include the
singular.
THIS AGREEMENT GOVERNS YOUR ACCEPTANCE OF CARDS.
YOUR ACCEPTANCE OF A CARD OR SUBMISSION OF SALES DATA
DOCUMENTING A CARD SALE INDICATES YOUR ACCEPTANCE OF
THE TERMS OF THIS AGREEMENT. This Agreement supersedes any
other agreements concerning Cards. Please read this Agreement
carefully. You must follow all of the terms set forth below.
1. Acceptance of Cards. You agree to accept Cards at all of your
locations in payment for purchases of goods and services from all
Cardmembers who want to use Cards at your establishment. You agree to
follow the procedures in this Agreement and in our Operating Regulations
concerning your acceptance of Cards and the preparation of Sales Data.
Please refer to the Operating Regulations for specific details regarding
how you may accept Card sales.
2. Operating Regulations. The Operating Regulations are incorpo-
rated into this Agreement as Exhibit A. The Operating Regulations are an
integral part of this Agreement and contain procedures which you must
follow in connection with your acceptance of a Card. We may change the
Operating Regulations from time to time by sending you written notice 30
days in advance. However, certain changes may become effective
immediately for security reasons. If there is any conflict between this
Agreement and the Operating Regulations, the terms of this Agreement will
govern.
3. Authorization. For each individual Card sale, you must obtain
authorization from us prior to making the Card sale. Please refer to the
Operating Regulations for specific information on obtaining
authorization.
4. Telephone, Mail Order and Internet Card Sales. You agree to
obtain our prior approval before accepting any Card sales over the
Internet. Any Card sales over the Internet that do not comply with the
Operating Regulations are subject to Chargeback as described in Section
9. You may accept a Card for a telephone or mail order sale provided that
you follow the procedures in the Operating Regulations for accepting
such Card sales. If telephone or mail order Card sales are or become a
substantial portion of your total charge card sales volume (meaning in
MasterCard Processing Fee
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AMEX Processing Fee
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excess of 50%), you agree to inform us of this and to execute and abide
by any supplemental or replacement agreements that we may provide to
you regarding telephone and mail order Card sales.
5. Cardmember Refunds and Credits. You may establish your
own policy concerning refunds, and you agree to advise Cardmembers, in
advance of any Card sale, of this policy. Consult the Operating Regulations
for the procedures you must follow in order for us to honor your return
policy.
6. Settlement of Transactions. As used in this Agreement, the term
"Settlement" means the procedure by which we will reimburse you for the
amount of each Card sale for which you transmit Sales Data to us which
represents a purchase made at your establishment with a Card, minus an
amount equal to the sum of any Chargebacks, any credits to Card members
that you submit to us, and the Merchant Fee, if applicable, and plus or
minus adjustments that we make to reconcile or correct errors in your
Sales Data. In order to properly effect Settlement, you must comply with
each of the terms and conditions set forth in the Agreement and in the
Operating Regulations. Consult your Operating Regulations for these
important Settlement terms and conditions.
7. Merchant Fee. In consideration for your participation in the Card
program, you agree to pay us a merchant fee ("Merchant Fee") in the
amount indicated in our records, which will be either a percentage of your
Net Sales or Gross Sales, as defined in the Operating Regulations, or a Per
Transaction Fee, as defined in the Operating Regulations. The Operating
Regulations fully explain how the Merchant Fee is calculated and paid and
our records will indicate the calculation method applicable to your
participation in the Card program.
8. Billing Inquiries. You agree to follow the procedures set forth in
the Operating Regulations with respect to the notices of Cardmember
disputes and billing inquiries that you receive from us.
9. Chargeback Rights. Under certain circumstances, we may return
a Card sale to you unpaid, or we may return a previously paid Card sale to
you for repayment to us. These returned charges are called "Chargebacks':
If you do not follow all the terms of this Agreement and the Operating
Regulations when making a transaction with a Card, or if a Card sale which
is the subject of a billing dispute or quality dispute is subject to Chargeback
as specified in this Agreement, we may refuse to pay you for the Card sale
or the disputed portion of it. Refer to your Operating Regulations for complete
terms and conditions with respect to Chargebacks.
10. Retention of Records. You agree to keep an original copy of
each Sales slip and each Credit slip for no less than two hundred and ten
(210) days from the Card transaction date, or one hundred and eighty
(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 magnetic or electronic
form, you also agree to 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
Card transaction. You agree to provide us with a copy of any Sales slip or
Credit slip within fifteen (15) Business Days of our request.
11. Assignment. You may not assign or transfer this Agreement to
any other party without our prior written approval. If you sell all or a substantial
see the reverse side for continuation of this Agreement
part of your business or materially change the nature of your business, or
by any means cause or permit a new entity to own a substantial part of your
business, you agree to notify us in advance, and we may offset any amounts
we owe you against any outstanding obligations you have to us, or at our
option, terminate this Agreement as provided below. We may assign this
Agreement and our rights and obligations under it, in whole or in part, to any
company which is a direct or indirect parent, subsidiary or affiliate of ours.
We will notify you of any such assignment. This Agreement will be binding
upon and inure to the benefit of the parties and their respective successors
and assigns.
12. Changing This Agreement. We may change this Agreement at
any time by giving you written notice at least 30 days in advance of the
change. If you do not accept such a change, you may terminate this
Agreement by notifying us within that 30 day period. If you make any Card
sales after the effective date of a change in terms, this means that you
have consented to the new terms.
13. Term and Termination. This Agreement will become effective
upon your acceptance of the terms of this Agreement through the conduct
described in the second introductory paragraph of this Agreement. We are
not bound by any changes that you propose to this Agreement unless our
home office provides you with written approval of such changes. If you
propose changes to this Agreement and accept Card sales before you receive
written approval of such changes from us, you agree that such Card sales
shall be governed by the terms of this Agreement without any of the
proposed changes unless such changes are acceptable to us. Any mutually
agreed upon changes to the Agreement shall apply to all Card sales accepted
by you, from and after the date of the proposed changes. This Agreement
remains in full force and effect until terminated as provided for in this Section
13. You may terminate this Agreement at any time by giving us written
notice sent certified mail to the address specified in the Operating
Regulations. We may terminate this Agreement at any time by giving you
30 days' prior written notice. We may terminate this Agreement without
such notice if you have materially breached this Agreement, or if, in our
sole opinion: Card sales made at your establishment are irregular, you have
had, or may have, an unusual or inappropriate number of Cardmember
inquiries, credit requests or Chargebacks during a relevant period, there
are security concerns regarding Card sales at any of your establishments,
or your financial condition or other conditions warrant earlier termination.
You agree to accept Cards and follow the terms of this Agreement until the
termination becomes effective. The provisions governing the processing
of Sales slips and Credit slips and Settlement will continue to apply even
after the termination, until all Card transactions made prior to the
termination are settled or resolved. Upon termination, you agree to
immediately send us all previously unsubmitted Sales slips and Credit slips
for Card sales made up to the date of termination. We are not liable to you
for any direct or consequential damages that you may suffer as a result of
our termination of this Agreement.
14. Reserve Account. At the termination, or during the term, of this
Agreement, we may require you to maintain with us, or at a financial institution
designated by us, money as cash collateral in reserve in an amount necessary
to cover fees, Chargebacks and Cardmember disputes which relate to
transactions made prior to the termination. You agree to pay us the
amount of the reserve balance promptly on demand, or, at our option, we
may debit the Settlement Account, suspend Settlement without prior notice,
or withhold payment(s) owed to you at termination for the reserve balance.
We will release any money held in reserve not later than 210 days after the
termination date, and we will provide you with an accounting of any money
taken out of the reserve account. We may require you to establish a
reserve account through one of the methods described above during the
term of this Agreement if there are excessive disputes or Chargebacks
relating to Card sales at your establishment or if, in our discretion, we
believe that your financial position warrants such an account. If you do not
agree to establish a reserve account upon our request, we may terminate
this Agreement as provided in Section 13.
15. Financial Information. If we request it, you agree to provide us
with financial information, including, without limitation, financial statements,
concerning you and/or your establishment's financial condition and general
creditworthiness, and your 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 your bankruptcy or reorganization.
16. Indemnification. You agree to indemnify and hold us harmless,
along with our subsidiaries and affiliates who are engaged in the Card
program, and each company's respective officers, directors and employees,
for all costs, damages, claims or complaints arising from your wrongful acts
or omissions in connection with each Card sale (including, but not limited to,
costs, damages, claims or complaints arising in connection with the goods
or services purchased in the Card sale), and from your failure to perform
your duties and responsibilities under this Agreement. We agree to indemnify
and hold you harmless, along with your subsidiaries and divisions who accept
Cards, and each company's respective officers, directors and employees,
for all costs, damages, claims or complaints arising from our wrongful acts
or omissions in connection with your acceptance of Cards. The terms of
this section 16 shall survive termination of this Agreement.
17. Factoring. You agree that you will not factor any Card Sales. See
the Operating Regulations for complete details regarding what constitutes
factoring and the liability you incur if you factor any Card Sale.
18. Type of Business. You understand that we have considered your
application to become a Card merchant and proposed the terms of this
Agreement based upon the information you provided in your application for
the types and kinds of business you listed in your application to become a
Card merchant. The Operating Regulations specify what you must do, the
notice you must provide, and what may happen if you change the type or
kind of business in which you engage.
19. Performance of Duties. Neither party shall be liable for its failure
to perform under this Agreement if such failure arises out of causes beyond
the control and without the fault or negligence of such party. Such causes
may include, but are not limited to, acts of God, fire, wars, or strikes.
20. Enforcement of Our Rights. If you breach this Agreement, you
agree to reimburse us for our costs and expenses, including reasonable
attorney's fees, that we incur in enforcing our rights under this
Agreement.
21. Notice. You agree that you will send any notice to us that is
required by this Agreement or by the Operating Regulations to the address
specified in the Operating Regulations. We agree that we will send any
notice to you that is required by this Agreement or the Operating Regulations
to your address as specified in our records.
22. Captions. The captions used in this Agreement are for reference
only and will not be interpreted to limit or define the text of this Agreement.
23. Governing Law. This Agreement is governed by the laws of the
State of Delaware. If any part of this Agreement is not enforceable, the
remaining provisions will remain valid and enforceable. We have not waived
any of our rights under this Agreement unless we agree to do so in writing.
Each party agrees to comply with all applicable laws and regulations in
connection with the Card program and this Agreement.
24. Credit Information. In consideration of your application to become
a Card merchant and our agreement to review your application, you and
each of your owners agree that we and any of our affiliates or agents may
obtain, verify and exchange with others business and personal financial
and/or credit information on you and any of your owners.
33722 Rev. 6/00