EMV Transition Update – Important News on Chargebacks
Since the EMV liability shift that occurred in October of 2015, many, if not most food retailers have made the significant investment in installing EMV terminals, yet many have not been able to use them because they can’t get certified to accept EMV transactions. As a result, retailers are left liable with any fraudulent charges and have incurred significant chargebacks from card issuers. OGA has been actively advocating these concerns to legislators and was a top priority issue for us as we engaged Congressional leaders during our April Industry Fly-in.
We are happy to report that last week, Visa announced some positive first steps in addressing the EMV chargeback issue. While this is an important initial step, there is still work that needs to be done to fully address the EMV issue, one that we will continue to engage Congress on. We would also like to thank NGA for their continual advocacy efforts and work on this important issue on behalf of our industry.
The Visa announcement – which you can read here – in summary states (courtesy of NGA):
1) Merchant Chargeback Relief
In recognition that some card issuers are issuing excessive chargebacks to merchants, effective July 22, 2016 Visa will block all chargebacks to merchants under $25. Additionally, effective October 2016 – April 2018 issuers will be limited to charging back 10 fraudulent transactions per account.
2) Acquirers Can Self-Certify Merchants
This will allow a merchant’s acquirer to self-certify a merchant if they know the merchant’s systems are in compliance. This will effectively eliminate a step in the certification process that added wait times for merchants.
3) Additional Funding Resources to Speed Up Certifications
Visa will provide additional funding to help acquirers add resources where necessary and funding to software companies to be able to pre-certify their technology for EMV terminals.
Drug Pricing Initiated Statute Sent to Legislature
An initiated statute that seeks to limit what state agencies pay for prescription drugs, the “Ohio Drug Price Relief Act,” was sent to the General Assembly last Thursday, although little action is expected for the state legislature. Secretary of State Jon Husted sent over the statue to legislators after first sending the petitions back for review by county boards of elections. By law, the General Assembly has four months to pass the proposal as written or if they do not, supporters can submit another 91,677 signatures to put the matter before voters in November. Several groups opposed the measure, including PhRMA, Ohio Pharmacists Association, the Osteopathic Association, the Foot & Ankle Medical Association, the Chamber of Commerce and the Manufacturers’ Association. OGA will continue to monitor this issue.
Congress Set to Pass Appropriations and Tax Extender Legislation
(December 17, 2015) Several key wins for the retail food industry are set to be passed by Congress as the House posted its Appropriations Bill and Tax Relief Packages this week, paving the way for passage before breaking for the holidays. Special thanks to FMI, NGA, NACS, and all our federal partners for their continual advocacy and reporting on these provisions. The tax extender package (the Protecting Americans for Tax Hikes Act of 2015) is expected to be voted out of the House today followed by the Omnibus bill (2016 Consolidated Appropriations Act of 2016) on Friday. The Senate will then need to pass both bills before they become law. Additionally, Congress passed another short-term continuing resolution yesterday to fund the government through December 22, to give both chambers adequate time to pass both packages. Below are some key highlights from both pieces of legislation.
Omnibus bill:
Menu Labeling Extension (page 98) – language is included that extends the final rule to one year after HHS/FDA publishes Level 1 guidance. Since FDA has yet to provide this guidance, something we expect in spring 2016, this likely means the current effective date of December 1, 2016 will be moved out. Additionally this gives Congress added time to pass pending legislation that modifies the menu labeling regulations.
COOL Repeal (pages 104-105) – as contained within the bill is language that repeals country of origin labeling requirements for beef and pork products – other COOL requirements remain in place.
“Cadillac” Tax Delay & Health Insurance Tax Moratorium (page 2000 and 2002) – two important healthcare related provisions were included that delays the 40% excise tax on high cost employer-sponsored health coverage for two years through 2019 and places a moratorium on taxes that were collected from health insurance providers January 1, 2014 until January 1, 2017.
Tax Extender Package:
House Ways and Means Committee provided a section-by section summary of the tax extenders package that details the short-term extensions and the longer termed extension or permanent provisions.
Highlights include: Five-year extensions of the Work opportunity tax credit (pages 38-39); a phase down of Bonus depreciation during 2015 through 2019 (pages 39-65); permanent extension of deduction for contributions of food inventory (pages 15-19); and a permanent extension of the 15-year recovery for qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property (page 29).