These Merchant Agreement – Terms and Conditions and the Merchant Application constitute the “Agreement” between Chesapeake Bank (“Bank”) and the Merchant identified on the Merchant Application.
Whereas, Bank participates in programs affiliated with the Associations that allow holders of Cards to purchase goods and services from selected merchants through the Cards.
Whereas, Merchant wants to participate in the Association systems in order to receive payment from holders of Cards in exchange for the Merchant’s goods and/or services.
Now therefore, in consideration of the foregoing and as set forth below, Merchant and Bank agree as follows:
1. Definitions. For the purposes of this Agreement the following terms have the following
meanings unless the context otherwise requires:
“Address Verification” means a service that allows Merchant to verify the home address of
Cardholders with the relevant Issuer.
“Applicable Law” means all applicable federal, state and local laws, rules and regulations.
“Association(s)” means VISA U.S.A., Inc. (“Visa”), MasterCard International Incorporated
(“MasterCard”), Discover Financial Services LLC (“Discover”), and AXP/American Express
Travel Related Services Company Inc. (American Express).
“Authorization” means an affirmative response, by or on behalf of an Issuer to a request to
effect a Transaction, that a Transaction is within the relevant Cardholder’s available credit
limit and that the Cardholder has not reported the Card lost or stolen. All Transactions
requiring Authorization by the Associations must be authorized.
“Authorization Center” means the facility or facilities designated from time to time by Bank
to which Merchant shall submit all requests for Authorization.
“Business Day” means any day other than: (i) a Saturday or Sunday; or (ii) a day on which
banking institutions in New York are authorized by law or executive order to be closed (and
on which Bank is in fact closed).
“Card(s)” means either a Visa, MasterCard, Discover, or AXP/American Express credit
card, debit card (or other similar card that requires a PIN for identification purposes), or prepaid,
stored-value or gift card and may include other evolutionary financial transaction
devices used for the purpose of obtaining credit or debiting accounts
“Cardholder” means a person authorized to use a Card.
“Chargeback” means a Transaction that Bank returns to Merchant pursuant to this
Agreement.
“Forced Sale” means a sales Transaction processed without an approved electronic
Authorization number being obtained for the full amount of the sales Transaction at the time
the Transaction is processed.
“Full Recourse Transactions” means mail orders, telephone orders, e-commerce (Internet)
orders, Pre-Authorized Recurring Order Transactions, and other “card not present” sales.
“Issuer” means a member of an Association that enters into a contractual relationship with
a Cardholder for the issuance of one or more Cards.
“Mid-Qualified Transactions” means any Transaction categorized as such by the
processor designated by Bank to settle Transactions with the Associations
“Non-Qualified Transactions” means: (i) any Transaction submitted for processing more
than 48 hours past the time the Authorization occurred; (ii) any Transaction missing required
data; and (iii) any Transaction categorized as such by the processor designated by Bank to
settle Transactions with the Associations.
“Pre-Authorized Recurring Order Transaction” means a Transaction that has been preauthorized
by the Cardholder and for which the goods or services are to be delivered or
performed in the future by Merchant without having to obtain approval from the Cardholder
each time.
“Qualified Transactions” means any Transaction categorized as such by the processor
designated by Bank to settle Transactions with the Associations.
“Rules” means all rules, regulations, by-laws, standards and procedures adopted and/or
amended from time to time by the Associations (including, without limitation, the Payment
Card Industry Data Security Standard), Bank and each relevant Issuer.
“Services” means the transaction processing services provided by Bank under this
Agreement, as the same may be amended from time to time by Bank, in its sole discretion.
“Transaction” means the acceptance of a Card or information embossed on the Card for
payment for goods sold and/or leased or services provided to Cardholders by Merchant and
receipt of payment from Bank, whether the Transaction is approved, declined, or processed
as a Forced Sale. The term “Transaction” also includes credits, errors, returns and
adjustments.
“Transaction Chargeback Ratio,” for any given calendar month, means the number of
Chargebacks processed in that month divided by the total number of Transactions
processed in that month.
2. Services Provided to Merchant. During the term of this Agreement and subject to the terms and conditions of this Agreement Bank shall provide Services to Merchant including but not limited to: (i) Providing technical documentation as needed, and support in order to
allow Merchant to accept and process Transactions; (ii) providing technical support and customer support for all Transactions, including, without limitation, Authorization, settlement, Chargeback processing and reporting.
3. Term. This Agreement shall become effective on the earlier of, (i) the date signed by Bank, (ii) the date that the first Transaction is processed, or (iii) the date the Merchant
Application is approved by Bank (the “Effective Date”). The initial term of this Agreement is three (3) years beginning on the Effective Date (“Initial Term”). The Agreement shall renew automatically for successive terms of one (1) year beginning upon expiration of the Initial Term (each a “Renewal Term”), unless either party provides written notice of termination to the other party at least 90 days prior to the end of the then-current Initial Term or Renewal
Term. This Agreement may otherwise be terminated pursuant to Sections 29 and 30, below.
4. Merchant Operating Account. Prior to accepting any Cards, Merchant shall establish a demand deposit account at Bank, or at a financial institution approved by Bank (the
“Operating Account”), through which fees, charges and credits due in accordance with this Agreement may be processed. Merchant authorizes Bank to debit all amounts Merchant owes Bank hereunder from the Operating Account, whether maintained at Bank or another
financial institution, at times deemed appropriate by Bank, through the ACH Banking Network or by a manual debit of the Operating Account. Merchant waives any and all claims
for loss or damage arising out of any such charges or debits to the Operating Account. This authorization will remain in effect after any termination of this Agreement until such time as all Merchant obligations have been paid to Bank in full. Merchant agrees to maintain
sufficient funds in the Operating Account to satisfy Merchant’s obligations under this Agreement. Merchant shall be solely liable for all fees and charges assessed by a financial institution related to the Operating Account.
5. Fees. Merchant shall pay all fees as set forth in the Merchant Application and this Agreement and as may amended from time to time. All amounts Merchant owes hereunder may be charged to the Operating Account or Reserve Account (as defined below), recouped by adjustment to any credits due to Merchant, or set off against any account or property Bank holds for or on behalf of Merchant. Bank will also charge Merchant for any and all
fines, fees, penalties, loss allocations, assessments, registrations, expenses, certifications expenses and other amounts incurred from third parties as a result of Merchant’s actions, omissions or use of the services contemplated under this Agreement.
6. Merchant Statement. At least once each month, Bank shall make a statement available to Merchant in written or electronic format setting forth Merchant charges and credits (the “Merchant Statement”). All information appearing on the Merchant Statement shall be
deemed accurate and affirmed by Merchant unless Merchant objects by written notice specifying the particular item in dispute within 30 days of the date of the Merchant Statement.
7. Reserve Account. Bank may establish a reserve account at Bank (“Reserve Account”) at any time during or after the term of this Agreement, for all indebtedness of Merchant to Bank that may arise out of or relate to the obligations of Merchant under this Agreement, including, but not limited to, Chargebacks and fees, in such amount as Bank from time to time may determine in its sole discretion. Bank may fund the Reserve Account by deducting amounts from payments due to Merchant, by effecting a charge against Merchant’s Operating Account or against any of Merchant’s accounts at Bank, or by demanding payment from Merchant. The Reserve Account will be maintained for a minimum of six months after the date on which this Agreement terminates or until such time as Bank determines that the release of the funds to Merchant is prudent, in the best interest of Bank, and commercially reasonable, and that Merchant’s account with Bank is fully resolved. Upon expiration of this period, any balance remaining in the Reserve Account will be paid to
Merchant.
8. Security Interest. As security for the performance by Merchant of all of its obligations under this Agreement, Merchant hereby grants to Bank a security interest in: (i) the funds held in the Operating Account and in the Reserve Account; (ii) any funds that may be due to Merchant under this Agreement; and (iii) any inventory with respect to which a Transaction has occurred but has not yet been fulfilled (collectively the “Secured Assets”). Pursuant to
Article 9 of the Uniform Commercial Code, as amended from time to time, Bank has control over and may direct the disposition of the Secured Assets without further consent of the Merchant. Merchant will execute and deliver to Bank such documents, in form satisfactory to Bank, as Bank may reasonably request in order to perfect Bank’s security interest in the Secured Assets, and will pay all costs and expenses associated with filing the same or this Agreement in all public filing offices, where filing is deemed by Bank to be necessary or desirable. Bank is authorized to file financing statements relating to the Secured Assets
where authorized by law. Merchant appoints Bank as its attorney-in-fact to execute such documents as are necessary or desirable to accomplish perfection of any security interests. This appointment is coupled with an interest and shall be irrevocable as long as Merchant
owes any amount to Bank. In addition to the security interest in the Secured Assets, Bank shall have a contractual right of setoff against the Secured Assets.
9. Processing Transactions. December 2016 Merchant Agreement – Terms and Conditions __________________ 2 of 6
Merchant Initials (a) Merchant shall obtain Authorizations and process Transactions using such equipment
and software as may be approved from time to time by Bank, in its sole discretion (the
“Equipment”). Merchant shall validate Cards and Cardholders in face-to-face transactions
as required by the Rules.
(b) Merchant shall obtain Authorizations for all Transactions in a manner required by
Rules and in the manner, and following the processes and procedures, determined from
time to time by Bank, in its sole discretion, and communicated to Merchant by Bank.
(b) Merchant shall submit, in the manner determined from time to time by Bank, such
information to Bank or Bank’s designee in connection with Transaction processing as Bank
from time to time may determine.
(c) Merchant shall not submit a Transaction to Bank (electronically or otherwise) until
Merchant has performed its obligations to the Cardholder in connection with the Transaction
or obtained Cardholder’s consent for a Pre-Authorized Recurring Order Transaction.
(d) Merchant shall not transmit any Transaction to Bank that Merchant knows or should
have known to be illegal, fraudulent or not authorized by the Cardholder.
(e) Merchant shall not process a Transaction that does not result from an act between a
Cardholder and Merchant.
(f) Merchant shall not request or use any Card number for any purpose other than as
payment for its goods or services.
(g) Merchant may transmit a Transaction that effects a prepayment of services or full
prepayment of custom-ordered merchandise, manufactured to a Cardholder’s specifications,
if Merchant advises Cardholder of the immediate billing at the time of the Transaction and
within time limits established by the Associations.
10. Prohibition of Furnishing Account Information. Except as otherwise required by law,
Merchant shall not, without the Cardholder’s and Bank’s prior written consent, sell,
purchase, provide, or otherwise disclose the Cardholder’s account information or other
Cardholder information to any third party other than Bank’s or Merchant’s Third Party
Servicers and processing organizations for the purpose of assisting Merchant in its
business. Merchant must notify Bank of any Third Party Servicers that will have access to
Cardholder information.
11. Reconciliation of Transactions.
(a) Electronically Transmitted Transactions. Bank shall control and disburse all
Transaction-related settlement funds to Merchant. Transactions with respect to which Bank
receives payment from or through the Associations will be settled on a daily basis, and Bank
shall deliver payment to Merchant in connection with such Transactions as soon after
receiving such payment as practicable by effecting a credit to the Operating Account equal
to the reconciled and paid summary Transaction total of all of Merchant’s total paid
summary Transactions since the previous credit. Notwithstanding the foregoing, Bank may,
in its sole discretion, effect a credit to the Operating Account in connection with any
Transaction prior to the point in time Bank receives payment in connection therewith from or
through the Associations. In either case, Bank may, if necessary or appropriate, reduce any
credit made to the Operating Account by, and/or Bank may require that Merchant pay to
Bank an amount equal to: (i) the sum of all Cardholder charges denied, refused or charged
back; (ii) all refunds processed on account of Cardholders during said time period; (iii) the
amounts, fees and charges, including (but not limited to) Chargebacks, Merchant owes
Bank hereunder; (iv) all taxes, penalties, charges, fees and other items incurred by Bank
that are reimbursable pursuant to this Agreement; (v) all applicable rates, fees and charges
under this Agreement; (vi) any amount Bank previously credited to the Operating Account
that Bank determines, in good faith, was incorrectly so credited; and (vii) any amount Bank
determines, in its sole discretion, represents unacceptable risk to the relevant Cardholder or
Bank. Any application of funds associated with the settlement of Transactions that differs
from the foregoing must be agreed to, in writing, by Bank and Merchant and may not, in any
respect, violate Applicable Law.
(b) Reconciliation of Transactions. Merchant shall reconcile each settled Transaction and
shall notify Bank immediately of any discrepancies or errors Merchant notes as a result of
such reconciliation. Bank shall not have any responsibility or liability for Transaction-related
errors or omissions that are brought to its attention more than thirty (30) days after the date
on which the Transaction to which such error or omission relates is first presented to Bank
for settlement.
(c) Provisional Credit. Any credits to the Operating Account are provisional only and
subject to revocation by Bank until such time that the Transaction is final and no longer
subject to Chargeback by the Issuer, Cardholder or Associations. Bank may withhold
payment for a Transaction to Merchant, for any reason, until such time as the Transaction
has been verified as legitimate by the relevant Issuer, or Bank receives adequate supporting
documentation from Merchant to authenticate the Transaction and mitigate Chargeback risk.
12. Adjustments and Returns. Merchant will maintain a fair exchange and return policy
and make adjustments with respect to goods and services sold and/or leased to its
customers whenever appropriate. If Merchant limits its acceptance of returned
merchandise, or if Merchant is an e-Commerce Merchant, Merchant will ensure that its
return policies are clearly set forth on the Transaction receipt or on Merchant’s website, as
required by Rules or Applicable Law. If goods are returned, or services are terminated or
canceled, or any price is adjusted, Merchant will prepare and transmit a credit or return
Transaction, either electronically or by paper, for the amount of the adjustment as a
deduction from the total amount of Transactions transmitted that day. If the amount of credit
or return Transactions exceeds the amount of sales Transactions, Merchant shall pay the
excess to Bank. Merchant shall make no cash refunds on credit Transactions and shall
handle all credit adjustments as provided in this Section. If no refund or return will be given,
Merchant must advise Cardholder in writing, at the time of the Transaction, that the sale is a
“final sale” and “no returns” are permitted. Merchant must advise Cardholder in writing of
any policy of Merchant that provides for no-cash refunds and in-store credit only. Merchant
shall follow Association reservation/no-show policies, and shall notify Cardholders in writing
of this policy on all advance reservations. Merchant also shall notify Cardholders at the time
of the reservation of the exact number of days required for reservation deposit refunds.
13. Chargebacks. The acceptance by Bank of any Transaction processed in accordance
with the terms of this Agreement shall be without recourse to Merchant, except for:
(i) Full Recourse Transactions; (ii) as otherwise indicated in this Agreement; and (iii) under
any of the following circumstances:
(a) No specific prior Authorization for the Transaction was obtained from the Authorization
Center, the approval number does not appear in the electronic transmittal that is maintained
by Bank, or the Transaction was submitted to the Bank thirty (30) days or more after the
date on which the goods and/or services to which the Transaction relates were purchased
or leased by the relevant Cardholder;
(b) The Transaction was based on a pre-authorization form, the Card on which the
Authorization was based was canceled and Merchant was so notified prior to the
Transaction;
(c) The Card giving rise to the Transaction was canceled and prior to, or at the time of,
the Transaction, and Merchant received notice of the cancellation through the electronic
terminal, in writing or otherwise;
(d) The Card expired prior to the date of the Transaction or the date of the Transaction
was prior to the validation date, if any, indicated on the Card;
(e) The Transaction information required by this Agreement was not submitted to Bank, or
the procedures required by this Agreement to be followed in connection with processing a
Transaction were not followed;
(f) Bank or Issuer receives a complaint from or on behalf of a Cardholder stating that
there is an unresolved dispute or defense to a charge (whether or not valid) between
Merchant and Cardholder;
(g) The Cardholder makes a written complaint to Bank or Issuer that the Cardholder did
not make or authorize the Transaction;
(h) A setoff or counterclaim of any kind exists in favor of any Cardholder against Merchant
that may be asserted in defense of an action to enforce payment against the Cardholder in
the Transaction;
(i) The Transaction was made at or by a merchant other than Merchant;
(j) The Transaction otherwise violates the terms of this Agreement, Rules or any
Applicable Law;
(k) A Transaction is charged back by an Issuer; or
(l) Any representation or warranty made by Merchant in connection with the Transaction
is false or inaccurate in any respect.
In any such case, Bank shall not be obligated to accept a Transaction for credit to the
Operating Account. If Bank has credited the Operating Account or Reserve Account for such
a Transaction, Bank may return the Transaction to the Merchant, and Merchant shall pay
Bank the amount of the Transaction and any associated fees or charges. Merchant agrees
that it is solely responsible for all Chargebacks, and that Bank, without prior notice to
Merchant, may: (i) charge the amount of the Transaction to the Operating Account or
Reserve Account; (ii) recoup the amount of the Transaction by adjustment of the credits due
to Merchant; and/or (iii) set off the amount of the Transaction against any account or
property …
Merchant Agreement
These Merchant Agreement – Terms and Conditions and the Merchant Application constitute the “Agreement” between Chesapeake Bank (“Bank”) and the Merchant identified on the Merchant Application.
Whereas, Bank participates in programs affiliated with the Associations that allow holders of Cards to purchase goods and services from selected merchants through the Cards.
Whereas, Merchant wants to participate in the Association systems in order to receive payment from holders of Cards in exchange for the Merchant’s goods and/or services.
Now therefore, in consideration of the foregoing and as set forth below, Merchant and Bank agree as follows:
1. Definitions. For the purposes of this Agreement the following terms have the following
meanings unless the context otherwise requires:
“Address Verification” means a service that allows Merchant to verify the home address of
Cardholders with the relevant Issuer.
“Applicable Law” means all applicable federal, state and local laws, rules and regulations.
“Association(s)” means VISA U.S.A., Inc. (“Visa”), MasterCard International Incorporated
(“MasterCard”), Discover Financial Services LLC (“Discover”), and AXP/American Express
Travel Related Services Company Inc. (American Express).
“Authorization” means an affirmative response, by or on behalf of an Issuer to a request to
effect a Transaction, that a Transaction is within the relevant Cardholder’s available credit
limit and that the Cardholder has not reported the Card lost or stolen. All Transactions
requiring Authorization by the Associations must be authorized.
“Authorization Center” means the facility or facilities designated from time to time by Bank
to which Merchant shall submit all requests for Authorization.
“Business Day” means any day other than: (i) a Saturday or Sunday; or (ii) a day on which
banking institutions in New York are authorized by law or executive order to be closed (and
on which Bank is in fact closed).
“Card(s)” means either a Visa, MasterCard, Discover, or AXP/American Express credit
card, debit card (or other similar card that requires a PIN for identification purposes), or prepaid,
stored-value or gift card and may include other evolutionary financial transaction
devices used for the purpose of obtaining credit or debiting accounts
“Cardholder” means a person authorized to use a Card.
“Chargeback” means a Transaction that Bank returns to Merchant pursuant to this
Agreement.
“Forced Sale” means a sales Transaction processed without an approved electronic
Authorization number being obtained for the full amount of the sales Transaction at the time
the Transaction is processed.
“Full Recourse Transactions” means mail orders, telephone orders, e-commerce (Internet)
orders, Pre-Authorized Recurring Order Transactions, and other “card not present” sales.
“Issuer” means a member of an Association that enters into a contractual relationship with
a Cardholder for the issuance of one or more Cards.
“Mid-Qualified Transactions” means any Transaction categorized as such by the
processor designated by Bank to settle Transactions with the Associations
“Non-Qualified Transactions” means: (i) any Transaction submitted for processing more
than 48 hours past the time the Authorization occurred; (ii) any Transaction missing required
data; and (iii) any Transaction categorized as such by the processor designated by Bank to
settle Transactions with the Associations.
“Pre-Authorized Recurring Order Transaction” means a Transaction that has been preauthorized
by the Cardholder and for which the goods or services are to be delivered or
performed in the future by Merchant without having to obtain approval from the Cardholder
each time.
“Qualified Transactions” means any Transaction categorized as such by the processor
designated by Bank to settle Transactions with the Associations.
“Rules” means all rules, regulations, by-laws, standards and procedures adopted and/or
amended from time to time by the Associations (including, without limitation, the Payment
Card Industry Data Security Standard), Bank and each relevant Issuer.
“Services” means the transaction processing services provided by Bank under this
Agreement, as the same may be amended from time to time by Bank, in its sole discretion.
“Transaction” means the acceptance of a Card or information embossed on the Card for
payment for goods sold and/or leased or services provided to Cardholders by Merchant and
receipt of payment from Bank, whether the Transaction is approved, declined, or processed
as a Forced Sale. The term “Transaction” also includes credits, errors, returns and
adjustments.
“Transaction Chargeback Ratio,” for any given calendar month, means the number of
Chargebacks processed in that month divided by the total number of Transactions
processed in that month.
2. Services Provided to Merchant. During the term of this Agreement and subject to the terms and conditions of this Agreement Bank shall provide Services to Merchant including but not limited to: (i) Providing technical documentation as needed, and support in order to
allow Merchant to accept and process Transactions; (ii) providing technical support and customer support for all Transactions, including, without limitation, Authorization, settlement, Chargeback processing and reporting.
3. Term. This Agreement shall become effective on the earlier of, (i) the date signed by Bank, (ii) the date that the first Transaction is processed, or (iii) the date the Merchant
Application is approved by Bank (the “Effective Date”). The initial term of this Agreement is three (3) years beginning on the Effective Date (“Initial Term”). The Agreement shall renew automatically for successive terms of one (1) year beginning upon expiration of the Initial Term (each a “Renewal Term”), unless either party provides written notice of termination to the other party at least 90 days prior to the end of the then-current Initial Term or Renewal
Term. This Agreement may otherwise be terminated pursuant to Sections 29 and 30, below.
4. Merchant Operating Account. Prior to accepting any Cards, Merchant shall establish a demand deposit account at Bank, or at a financial institution approved by Bank (the
“Operating Account”), through which fees, charges and credits due in accordance with this Agreement may be processed. Merchant authorizes Bank to debit all amounts Merchant owes Bank hereunder from the Operating Account, whether maintained at Bank or another
financial institution, at times deemed appropriate by Bank, through the ACH Banking Network or by a manual debit of the Operating Account. Merchant waives any and all claims
for loss or damage arising out of any such charges or debits to the Operating Account. This authorization will remain in effect after any termination of this Agreement until such time as all Merchant obligations have been paid to Bank in full. Merchant agrees to maintain
sufficient funds in the Operating Account to satisfy Merchant’s obligations under this Agreement. Merchant shall be solely liable for all fees and charges assessed by a financial institution related to the Operating Account.
5. Fees. Merchant shall pay all fees as set forth in the Merchant Application and this Agreement and as may amended from time to time. All amounts Merchant owes hereunder may be charged to the Operating Account or Reserve Account (as defined below), recouped by adjustment to any credits due to Merchant, or set off against any account or property Bank holds for or on behalf of Merchant. Bank will also charge Merchant for any and all
fines, fees, penalties, loss allocations, assessments, registrations, expenses, certifications expenses and other amounts incurred from third parties as a result of Merchant’s actions, omissions or use of the services contemplated under this Agreement.
6. Merchant Statement. At least once each month, Bank shall make a statement available to Merchant in written or electronic format setting forth Merchant charges and credits (the “Merchant Statement”). All information appearing on the Merchant Statement shall be
deemed accurate and affirmed by Merchant unless Merchant objects by written notice specifying the particular item in dispute within 30 days of the date of the Merchant Statement.
7. Reserve Account. Bank may establish a reserve account at Bank (“Reserve Account”) at any time during or after the term of this Agreement, for all indebtedness of Merchant to Bank that may arise out of or relate to the obligations of Merchant under this Agreement, including, but not limited to, Chargebacks and fees, in such amount as Bank from time to time may determine in its sole discretion. Bank may fund the Reserve Account by deducting amounts from payments due to Merchant, by effecting a charge against Merchant’s Operating Account or against any of Merchant’s accounts at Bank, or by demanding payment from Merchant. The Reserve Account will be maintained for a minimum of six months after the date on which this Agreement terminates or until such time as Bank determines that the release of the funds to Merchant is prudent, in the best interest of Bank, and commercially reasonable, and that Merchant’s account with Bank is fully resolved. Upon expiration of this period, any balance remaining in the Reserve Account will be paid to
Merchant.
8. Security Interest. As security for the performance by Merchant of all of its obligations under this Agreement, Merchant hereby grants to Bank a security interest in: (i) the funds held in the Operating Account and in the Reserve Account; (ii) any funds that may be due to Merchant under this Agreement; and (iii) any inventory with respect to which a Transaction has occurred but has not yet been fulfilled (collectively the “Secured Assets”). Pursuant to
Article 9 of the Uniform Commercial Code, as amended from time to time, Bank has control over and may direct the disposition of the Secured Assets without further consent of the Merchant. Merchant will execute and deliver to Bank such documents, in form satisfactory to Bank, as Bank may reasonably request in order to perfect Bank’s security interest in the Secured Assets, and will pay all costs and expenses associated with filing the same or this Agreement in all public filing offices, where filing is deemed by Bank to be necessary or desirable. Bank is authorized to file financing statements relating to the Secured Assets
where authorized by law. Merchant appoints Bank as its attorney-in-fact to execute such documents as are necessary or desirable to accomplish perfection of any security interests. This appointment is coupled with an interest and shall be irrevocable as long as Merchant
owes any amount to Bank. In addition to the security interest in the Secured Assets, Bank shall have a contractual right of setoff against the Secured Assets.
9. Processing Transactions. December 2016 Merchant Agreement – Terms and Conditions __________________ 2 of 6
Merchant Initials (a) Merchant shall obtain Authorizations and process Transactions using such equipment
and software as may be approved from time to time by Bank, in its sole discretion (the
“Equipment”). Merchant shall validate Cards and Cardholders in face-to-face transactions
as required by the Rules.
(b) Merchant shall obtain Authorizations for all Transactions in a manner required by
Rules and in the manner, and following the processes and procedures, determined from
time to time by Bank, in its sole discretion, and communicated to Merchant by Bank.
(b) Merchant shall submit, in the manner determined from time to time by Bank, such
information to Bank or Bank’s designee in connection with Transaction processing as Bank
from time to time may determine.
(c) Merchant shall not submit a Transaction to Bank (electronically or otherwise) until
Merchant has performed its obligations to the Cardholder in connection with the Transaction
or obtained Cardholder’s consent for a Pre-Authorized Recurring Order Transaction.
(d) Merchant shall not transmit any Transaction to Bank that Merchant knows or should
have known to be illegal, fraudulent or not authorized by the Cardholder.
(e) Merchant shall not process a Transaction that does not result from an act between a
Cardholder and Merchant.
(f) Merchant shall not request or use any Card number for any purpose other than as
payment for its goods or services.
(g) Merchant may transmit a Transaction that effects a prepayment of services or full
prepayment of custom-ordered merchandise, manufactured to a Cardholder’s specifications,
if Merchant advises Cardholder of the immediate billing at the time of the Transaction and
within time limits established by the Associations.
10. Prohibition of Furnishing Account Information. Except as otherwise required by law,
Merchant shall not, without the Cardholder’s and Bank’s prior written consent, sell,
purchase, provide, or otherwise disclose the Cardholder’s account information or other
Cardholder information to any third party other than Bank’s or Merchant’s Third Party
Servicers and processing organizations for the purpose of assisting Merchant in its
business. Merchant must notify Bank of any Third Party Servicers that will have access to
Cardholder information.
11. Reconciliation of Transactions.
(a) Electronically Transmitted Transactions. Bank shall control and disburse all
Transaction-related settlement funds to Merchant. Transactions with respect to which Bank
receives payment from or through the Associations will be settled on a daily basis, and Bank
shall deliver payment to Merchant in connection with such Transactions as soon after
receiving such payment as practicable by effecting a credit to the Operating Account equal
to the reconciled and paid summary Transaction total of all of Merchant’s total paid
summary Transactions since the previous credit. Notwithstanding the foregoing, Bank may,
in its sole discretion, effect a credit to the Operating Account in connection with any
Transaction prior to the point in time Bank receives payment in connection therewith from or
through the Associations. In either case, Bank may, if necessary or appropriate, reduce any
credit made to the Operating Account by, and/or Bank may require that Merchant pay to
Bank an amount equal to: (i) the sum of all Cardholder charges denied, refused or charged
back; (ii) all refunds processed on account of Cardholders during said time period; (iii) the
amounts, fees and charges, including (but not limited to) Chargebacks, Merchant owes
Bank hereunder; (iv) all taxes, penalties, charges, fees and other items incurred by Bank
that are reimbursable pursuant to this Agreement; (v) all applicable rates, fees and charges
under this Agreement; (vi) any amount Bank previously credited to the Operating Account
that Bank determines, in good faith, was incorrectly so credited; and (vii) any amount Bank
determines, in its sole discretion, represents unacceptable risk to the relevant Cardholder or
Bank. Any application of funds associated with the settlement of Transactions that differs
from the foregoing must be agreed to, in writing, by Bank and Merchant and may not, in any
respect, violate Applicable Law.
(b) Reconciliation of Transactions. Merchant shall reconcile each settled Transaction and
shall notify Bank immediately of any discrepancies or errors Merchant notes as a result of
such reconciliation. Bank shall not have any responsibility or liability for Transaction-related
errors or omissions that are brought to its attention more than thirty (30) days after the date
on which the Transaction to which such error or omission relates is first presented to Bank
for settlement.
(c) Provisional Credit. Any credits to the Operating Account are provisional only and
subject to revocation by Bank until such time that the Transaction is final and no longer
subject to Chargeback by the Issuer, Cardholder or Associations. Bank may withhold
payment for a Transaction to Merchant, for any reason, until such time as the Transaction
has been verified as legitimate by the relevant Issuer, or Bank receives adequate supporting
documentation from Merchant to authenticate the Transaction and mitigate Chargeback risk.
12. Adjustments and Returns. Merchant will maintain a fair exchange and return policy
and make adjustments with respect to goods and services sold and/or leased to its
customers whenever appropriate. If Merchant limits its acceptance of returned
merchandise, or if Merchant is an e-Commerce Merchant, Merchant will ensure that its
return policies are clearly set forth on the Transaction receipt or on Merchant’s website, as
required by Rules or Applicable Law. If goods are returned, or services are terminated or
canceled, or any price is adjusted, Merchant will prepare and transmit a credit or return
Transaction, either electronically or by paper, for the amount of the adjustment as a
deduction from the total amount of Transactions transmitted that day. If the amount of credit
or return Transactions exceeds the amount of sales Transactions, Merchant shall pay the
excess to Bank. Merchant shall make no cash refunds on credit Transactions and shall
handle all credit adjustments as provided in this Section. If no refund or return will be given,
Merchant must advise Cardholder in writing, at the time of the Transaction, that the sale is a
“final sale” and “no returns” are permitted. Merchant must advise Cardholder in writing of
any policy of Merchant that provides for no-cash refunds and in-store credit only. Merchant
shall follow Association reservation/no-show policies, and shall notify Cardholders in writing
of this policy on all advance reservations. Merchant also shall notify Cardholders at the time
of the reservation of the exact number of days required for reservation deposit refunds.
13. Chargebacks. The acceptance by Bank of any Transaction processed in accordance
with the terms of this Agreement shall be without recourse to Merchant, except for:
(i) Full Recourse Transactions; (ii) as otherwise indicated in this Agreement; and (iii) under
any of the following circumstances:
(a) No specific prior Authorization for the Transaction was obtained from the Authorization
Center, the approval number does not appear in the electronic transmittal that is maintained
by Bank, or the Transaction was submitted to the Bank thirty (30) days or more after the
date on which the goods and/or services to which the Transaction relates were purchased
or leased by the relevant Cardholder;
(b) The Transaction was based on a pre-authorization form, the Card on which the
Authorization was based was canceled and Merchant was so notified prior to the
Transaction;
(c) The Card giving rise to the Transaction was canceled and prior to, or at the time of,
the Transaction, and Merchant received notice of the cancellation through the electronic
terminal, in writing or otherwise;
(d) The Card expired prior to the date of the Transaction or the date of the Transaction
was prior to the validation date, if any, indicated on the Card;
(e) The Transaction information required by this Agreement was not submitted to Bank, or
the procedures required by this Agreement to be followed in connection with processing a
Transaction were not followed;
(f) Bank or Issuer receives a complaint from or on behalf of a Cardholder stating that
there is an unresolved dispute or defense to a charge (whether or not valid) between
Merchant and Cardholder;
(g) The Cardholder makes a written complaint to Bank or Issuer that the Cardholder did
not make or authorize the Transaction;
(h) A setoff or counterclaim of any kind exists in favor of any Cardholder against Merchant
that may be asserted in defense of an action to enforce payment against the Cardholder in
the Transaction;
(i) The Transaction was made at or by a merchant other than Merchant;
(j) The Transaction otherwise violates the terms of this Agreement, Rules or any
Applicable Law;
(k) A Transaction is charged back by an Issuer; or
(l) Any representation or warranty made by Merchant in connection with the Transaction
is false or inaccurate in any respect.
In any such case, Bank shall not be obligated to accept a Transaction for credit to the
Operating Account. If Bank has credited the Operating Account or Reserve Account for such
a Transaction, Bank may return the Transaction to the Merchant, and Merchant shall pay
Bank the amount of the Transaction and any associated fees or charges. Merchant agrees
that it is solely responsible for all Chargebacks, and that Bank, without prior notice to
Merchant, may: (i) charge the amount of the Transaction to the Operating Account or
Reserve Account; (ii) recoup the amount of the Transaction by adjustment of the credits due
to Merchant; and/or (iii) set off the amount of the Transaction against any account or
property …
By checking the box below, you acknowledge and agree to the terms outlined above.
