Colin Timothy Gagnon (sacredspud) wrote,
Colin Timothy Gagnon

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Stupid Visa RED....

Nothing special to report over the weekend, I suppose. Tom came into town for the Wisconsin Film Festival, and spent Saturday night on our couch. I'd given up on seeing any films, but I did go to the screenwriters' panel discussion, which, despite the presence of Lone Scherfig and some other guy involved with Dogme95, was totally useless:

Moderator: As a man, what is your main concern when writing a female character?
Some guy: Um, I dunno, but I just wanna say: H... B... O. Some of the best TV you're gonna find out there, people. Watch Oz. Now that is some nice television. Effin' art. Oh, is it okay if I say effin'?
That's unusual -- the panel discussions, especially that one, are usually worth the time.

Ellen came over in the evening. We hung out with Tom and had supper at Stillwaters. On Sunday, I went to visit evil_jim. We recently ordered stuff from and split the shipping. It came on Friday, so I brought him his Kick-A-The-Cheat doll, Strong Bad Sings CD and Homsar t-shirt. It was nice to see that he's found a use for some of those Post-It!™ notes. He built the shrine to the swine I suggested, and his car now has eyebrows. Really noisy eyebrows. We also jump-started Jim's car. The last time I jump-started a car was quite some time ago, so it's nice to know that I can do it, should the need ever arise. I'd like to have a talk with GM about where car should go, but I guess maybe I should just be thankful that I don't drive a Japanese car which would require me to move the entire engine block first.

This morning when I got in to work, the first thing I noticed were the balloons. Everybody in my department has a red balloon floating above their desk, and the dry erase board had the words "HAPPY RED!" written on it. It took me a long time to even figure out what it meant, and when I did I felt pretty stupid for not having guessed, though there were plenty of other people who asked if I knew what the balloons meant. It's boring and work specific, and you won't be interested, but I'll place an explanation

Alright. The message "HAPPY RED!" refers to Visa's RED (Re-Engineering Disputes) standard that began today. A couple of years ago, Visa announced that they would be "streamlining" their dispute resolution process. Why the quotation marks? Because the changes Visa is making will streamline the process for two of their biggest clients, and cause headaches for the rest of us. I'll try to summarize the changes.

Until April of 2004, both MasterCard and Visa had the same dispute resolution process. You file a dispute with your bank. Your bank (or rather, the company that does your bank's backoffice processing) processes a chargeback. A chargeback debits money from the merchant's account, credits it to your bank, and alerts the merchant that the charge is in dispute. The merchant then has a chance to process a representment. The money is returned to their account, and your bank receives an explanation of why you should be held responsible for the charge. If your bank deems the claim insubstantial, they may contact you for a rebuttal, and then process a second chargeback. The money goes back to your bank, and the merchant receives a notification. At this point, the merchant may choose to file for arbitration. If your bank truly believes that you have a strong case against the merchant, they'll agree to arbitration and the case is reviewed and settled accordingly by Visa or MasterCard. The loser in an arbitration case becomes responsible for the transaction and extremely costly filing fees. Very few cases go as far as arbitration. Either one side is clearly right, one side caves to the other to avoid the possibility of losing the case, or your bank deems the charge too small to pay for dispute processing and simply refunds your money.

MasterCard still operates this way, but Visa RED is making major changes which we all expect to be adopted by MasterCard because Visa controls more of the credit card market, and it's in MasterCard's best interests to be compliant. Which is too bad, because the changes are, in a word, stupid.

The changes eliminate your bank's ability to process a second chargeback. They do a first chargeback, the merchant does a representment, and your bank is stuck either giving up (ie, refunding your money) or filing for arbitration. This is stupid because it's usually the second chargeback that proves the cardholder didn't make the charge. In a common situation, a chargeback because the charge came through after the card was stolen. The merchant comes back with an invoice and shipping information, and the second chargeback points out that the package was signed for by Olaus Wormius in Ancorage, but the cardholder is in Dubuque. Since they did ship merchandise, they merchant can file for arbitration, but in a situation like this, they ususally don't.

Up to this point, arbitration has been something initiated by the merchant's bank, so I'd bet anything that for the next few months either we'll see a lot of banks losing tons of money by filing cases they don't know they can't win, or we'll see a lot of banks losing tons of money because they're afraid of losing. Either way, between the procedure changes, the issues arising from compliance with Visa's new data processing systems, and the fact that MasterCard disputes are still processed the older (also possibly better) way, it's a mess and a lot of people are tearing their hair out over it.

I told you that wouldn't be interesting.

I sat down at my desk, checked my voicemail, and somebody had left me an eleven-minute recording of chewing, punctuated by the occasional sip of soda (or something). For eleven minutes. Somebody has too much free time on their hands. More free time than me, even.
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