From TSYS and VISA:
Visa is introducing an authorization requirement for return (cardholder refund) transactions. Authorizing a return enables the card issuer to validate the cardholder account, decline potentially fraudulent cards, and minimize chargebacks if the account does not exist or is closed. The return authorization message is intended to improve the return process by enabling cardholders to view a credit/return on their online banking statement in real time, as well as support other issuer services such as text alerts, in order to improve the cardholder experience and minimize return inquiries.
- April 14, 2019: Issuers will be entitled to initiate chargebacks on return transactions when the merchant fails to obtain an authorization. The issuer holds liability for an authorized Visa return submitted for settlement. The merchant holds liability for an unauthorized Visa return submitted for settlement. Merchants need to ensure their POS will authorize returns.
- July 1, 2019: Return / Refund transactions will be included in the Visa Zero-Floor Limit and Authorization Misuse Process Integrity Fee Assessment. Unauthorized returns submitted for settlement will be reported as a Visa Zero-Floor Limit non-compliance transaction. Authorized returns not submitted for settlement and are not reversed will be reported as Visa authorization Misuse non-compliance and merchants may notice higher fees on their merchant statement.
Read the full article here to see how this will affect merchants and cardholders alike.
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