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.

The _only_ difference is that the charge is not reversed in the
customer's account until _after_ the dispute is resolved, and that is
because US consumer protection laws do not apply to debit accounts, only
credit accounts.

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

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

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

The _only_ difference is that the charge is not reversed in the
customer's account until _after_ the dispute is resolved, and that is
because US consumer protection laws do not apply to debit accounts, only
credit accounts.

As I stated in the bit you snipped, there is some consumer protection for
debit card use, but it's not as good as what's available when using a
credit card, so you don't know what you are talking about.

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.

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

Stephen Sprunk wrote:
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.

Yes, that's actual money changing hands.

The rest of your followup has been charged back, but I don't stand
much of a chance of getting a refund for my time.

In message , at 14:05:50 on Tue, 28 Feb
2012, Stephen Sprunk remarked:
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.

I certainly feels like that, when you use a debit card.

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.

No folding banknotes (because it's all electronic), but why do you say
those credits and debits above are not "money"?
--
Roland Perry

On 29-Feb-12 02:49, Roland Perry wrote:
In message , at 14:05:50 on Tue, 28 Feb
2012, Stephen Sprunk remarked:
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.

I certainly feels like that, when you use a debit card.

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.

No folding banknotes (because it's all electronic), but why do you say
those credits and debits above are not "money"?

Perhaps I'm being too strict about my definition of "money", but debits
and credits are just accounting entries until cash (or checks, or wire
transfer) is used to settle them at some later point.

A "debit card" is special because it is settled every day by the issuing
bank with no further action by the customer; however, the rest of these
transactions, including those involving a "credit card", do not get
settled until later, eg. monthly.

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

In message , at 09:29:57 on Wed, 29 Feb
2012, Stephen Sprunk remarked:
Perhaps I'm being too strict about my definition of "money", but debits
and credits are just accounting entries until cash (or checks, or wire
transfer) is used to settle them at some later point.

A "debit card" is special because it is settled every day by the issuing
bank with no further action by the customer

Maybe in the USA, but here in the UK a debit card transaction is in
effect a wire transfer. Perhaps because the various banks are so much
more integrated with each other.
--
Roland Perry

"Stephen Sprunk" wrote in message ...

:
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.

Possibly a simplification - A dispute may not result in a chargeback, e.g. I
contact my card issuer and dispute a £12 transaction. As this transaction is
below the Visa/MCI chargeback limit my Issuer swallows the charge. (This
assumes Issuer and Acquirer are not the same).

Richard

On 27-Feb-12 16:31, R J Cardy wrote:
"Stephen Sprunk" wrote in message ...
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.

Possibly a simplification - A dispute may not result in a chargeback,
e.g. I contact my card issuer and dispute a £12 transaction. As this
transaction is below the Visa/MCI chargeback limit my Issuer swallows
the charge. (This assumes Issuer and Acquirer are not the same).

In the US, the customer is responsible for the first USD50 of each
fraudulent transaction, though some issuing banks _choose_ to refund
that as well. That's where merchants' "floor" of USD50 comes from: they
will get that much even from fraudulent transactions, as long as they're
not determined to be complicit in the fraud. If they are, their
processor will indeed charge them back.

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

"Stephen Sprunk" wrote in message ...

On 27-Feb-12 16:31, R J Cardy wrote:
Possibly a simplification - A dispute may not result in a chargeback,
e.g. I contact my card issuer and dispute a £12 transaction. As this
transaction is below the Visa/MCI chargeback limit my Issuer swallows
the charge. (This assumes Issuer and Acquirer are not the same).

In the US, the customer is responsible for the first USD50 of each
fraudulent transaction, though some issuing banks _choose_ to refund
that as well. That's where merchants' "floor" of USD50 comes from: they
will get that much even from fraudulent transactions, as long as they're
not determined to be complicit in the fraud. If they are, their
processor will indeed charge them back.

Thank you for the local view. Visa/MCI are international clubs and their
rules have varying types of floor limits amongst them the merchant floor
limit you quote and the chargeback limit that I quoted. In the case that I
quoted the merchant would get paid and as the amount is below the chargeback
limit I would get refunded. Handling chargebacks, which involving obtaining
'paperwork' from the merchant to resolve the dispute costs money and in some
cases it is cheaper to refund hence the VISA/MCI chargeback limits

Richard