On 27-Feb-12 14:45, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 27-Feb-12 11:38, Adam H. Kerman wrote:
Stephen Sprunk wrote:
(Debit card transactions are _not_ removed immediately in the event of a
dispute, which is a significant difference.)

The debit has already occurred, so procedures with credit cards are
irrelevant. A chargeback by the clearinghouse to the merchant's account
isn't possible. The amount must be refunded.

Wrong. The dispute and chargeback procedures involving the issuing
bank, the card network, the card processor and the merchant are all
identical regardless of what class of payment card is used.

You just made something up. I'm still calling it a refund, and not a
chargeback, to distinguish between the merchant receiving payment in
advance of when the cardholder pays his bill, and the merchant receiving
money from the cardholder's bank account.

The merchant _never_ receives money from the cardholder's bank account.

When a purchase is posted, the card processor credits the merchant's
account and debits the network's account, the network credits the card
processor's account and debits the issuing bank's account, and the
issuing bank credits the network's account and debits the customer's
account. NO ACTUAL MONEY CHANGES HANDS at that time.

A chargeback results in reversing some or all of that transaction, i.e.
removing those credits and debits.

So the refund must come from the merchant's bank account, not by
applying to future receipts he anticipates from credit transactions.

A refund is an entirely separate transaction for a negative amount, not
a reversal of the original transaction. The card processor debits the
merchant's account and credits the network's account, the network debits
the card processor's account and credits the issuing bank's account, and
the issuing bank debits the network's account and credits the customer's
account. NO ACTUAL MONEY CHANGES HANDS at that time.

Eventually, all the accounts are settled by moving the _net_ amount due
from one party to the other. Note that this may happen at a different
time for each set of accounts, and is handled in the aggregate involving
hundreds to millions of transactions at a time.

It's somewhat comparable to what happens when a check is processed for
the wrong amount.

I'm not familiar with exactly how that works, but I suspect it's similar
to a chargeback, not a refund, since the original transaction was
recorded incorrectly.

You're still wrong about why the reversal doesn't occur immediately:
Again, it's because the merchant receive monies directly from the purchaser.
The merchant's bank account has some protection, too: Can't just be
debited by third parties.

In credit card transactions, the merchant has received payment on credit,
not directly from the purchaser. That's why it's different.

It is you that doesn't understand how this works--and you won't let
pesky little details like facts get in your way, as usual.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking