A dispute recently came in at one of my client FI's and prompted questions around Reg E coverage. The cardholder went to Wal-Mart, used the self-checkout to complete the purchase, and requested $60 cash back. The purchase went through just fine, but no money was dispensed by the machine. The receipt also shows the cash amount. The cardholder did not attempt to resolve with anyone at the store, and instead called to file a claim.

I have made the argument that this WOULD be covered under § 1005.11(a)(1)(v), as the transaction was completed at an electronic terminal, not with a cashier, and the money was not dispensed. My client is advising they do not believe this to be covered under Reg E, and would treat it similarly to a claim of merchandise not received. The biggest concern from them is being required to issue provisional credit while waiting for the chargeback to process.

I usually err on the side of applying coverage when in a gray area, but I'd like to understand how other FI's are handling these types of disputes.

Thank you.

It appears to be an error to me. But for $60, I would just give them the money, cancel the card, not issue a new one and think about letting the relationship close out. Why would someone not go straight to the clerk standing their watching the self-service kiosks? It will cost your client more than $60 to see the dispute through and likely Walmart will deny it anyway.

Yes, it is an error covered by the "wrong amount" provision in 1005.11(a)(1)(v). I know for sure that I'd be looking for help at Walmart if a cash-back debit transaction didn't dispense cash, even knowing that the "correct" route would be filing a claim with the card issuer. They know how to check such problems out PDQ, and they don't want a PO'd customer making a scene.