How Do MOTO and unreferenced refunds work and what are the risks?

MOTO and unreferenced refunds allow merchants to process remote refunds, but they carry higher fraud risks and merchant liabilities. Learn how they work, the risks involved, and how to protect your business.

1. What is a MOTO refund?
2. Why are MOTO refunds considered high risk?
3. What liabilities do I accept with MOTO refunds?
4. How do I mitigate the risks associated with MOTO refunds?
5. What is the default limit of MOTO refunds?
6. How do I enable MOTO refunds?
7. Why do I have to enable unreferenced refunds to enable MOTO refunds?
8. Why do the unreferenced refund and MOTO refund limit have to be the same?

1. What is a MOTO refund?
   MOTO refunds are a type of unreferenced refund that occurs when a customer provides their payment details without being physically present, typically through telephone or mail. The merchant will then manually enter the card information into the terminal.
   Due to the absence of the card, these refunds are considered high-risk and carry specific responsibilities and liabilities for merchants.
   
   
2. Why are MOTO refunds considered high risk?
   The absence of the card during the transaction and manual entry of details increases the potential for fraud and human error.
   As merchants cannot verify the cardholder's identity in person, a lack of physical presence makes MOTO refunds more susceptible to fraudulent activities.
   
   
3. What liabilities do I accept with MOTO refunds?
   The liabilities outlined within the waiver, which must be signed by an Authorised Signatory are:
   1. You understand that MOTO Refunds are considered high-risk refunds as the card is not present.
   2. The refund transaction risk of using MOTO resides with you, as the merchant, not with the payment provider or the cardholder.
   3. You, as the merchant, take full responsibility for ensuring that all card details and refund amounts are correct prior to processing the payment/s.
      
      
4. How do I mitigate the risks associated with MOTO refunds?
   1. Terminal Passcodes: Setting a passcode is a best practice to prevent fraud by restricting access to sensitive functions, ensuring that only authorised personnel can perform critical operations.
      We recommend implementing access control based on staff roles, providing MOTO passcodes only to managers, supervisors, and other relevant personnel.
   2. Staff Training: Educate staff in relevant laws and industry regulations, including the PCI DSS, which is sent out via DocuSign.
      Ensure that your staff understand the importance of securing sensitive payment details, including avoiding storing credit card numbers or sensitive information on unsecured systems.
   3. MOTO Limits: You can manage your level of exposure by setting the maximum refund limit. We also recommend limiting how many terminals have MOTO functionality enabled.
   4. Verification Procedures: Request basic information such as the customer's name, billing address, contact details, and payment method. Cross-check these details against the information on file.
      If available, confirm the card details match those in which the transaction was initially processed on.
      
      
5. What is the default limit of MOTO refunds?
   The default maximum limit for MOTO refunds is $1,000, per transaction.
   If you would like to increase the maximum limit per transaction, a waiver form will be sent out via DocuSign.
   
   Note that our Compliance Team will need to approve any increase in MOTO limits.
   
   
6. How do I enable MOTO refunds?
   To enable MOTO refund on your terminals, we will send through a DocuSign containing a Waiver of Liability and the PCI DSS SAQ-B-IP and Attestation of Compliance document, if one has not already been signed.
   This will need to be filled in and signed by an Authorised Signatory prior to enabling this feature.
   
   
7. Why do I have to enable unreferenced refunds to enable MOTO refunds?
   As MOTO refunds are a type of unreferenced refund, the unreferenced refund feature must be first enabled to allow for MOTO refunds to be processed.
   
   Please note MOTO refund is an additional feature and is not required to be able to process unreferenced refunds.
   
   
8. Why do the unreferenced refund and MOTO refund limit have to be the same?
   As MOTO refund is a type of unreferenced refund, the limits must be equal to ensure you are able to process the refund.
   
   

Click here to learn more about processing MOTO transactions.