EIRF, otherwise known as ”Electronic Interchange Reimbursement Fee” is a more costly transaction interchange rate applied by Visa. It is a hefty charge that a merchant may see on their statement when a transaction has been re-classified to a more expensive category. However, EIRF charges can be avoided by merchants through careful attention to how they run transactions.
EIRF can be caused by many things, but most commonly:
- Retail key entry transactions
- Card-not-present transactions
- Travel and entertainment signature cards
- Late batching
- Forcing transactions (including voice authorization)
- Improperly cleared transactions
- Failure to respond to all Address Verification Service (AVS) prompts
What your merchant can do to avoid EIRF’s and the charges that come with them?
- Batch out every day. One of the most common causes of an EIRF is the failure to settle batches on time. In specific industries, to be eligible for any of Visa’s Custom Payment Service (CPS) programs — which offer better rates than EIRF — such as CPS/Retail or CPS/Restaurant, the batch must clear within two days.
- Clear transactions correctly. The authorization must match the clearing amount unless the merchant is exempt from authentication tolerance in environments where tipping is prevalent. This includes restaurants, bars, beauty salons, health spas and taxicabs.
- Do not force transactions or handle them off-line unless absolutely necessary. A forced transaction is the after-the-fact entry of a purchase transaction into the batch.
- Learn how to properly use address verification service (AVS) and invoice numbers. Enter all AVS information when prompted by the terminal and attempt to enter all fields correctly, especially the zip code. Never skip over a prompt asking for information in AVS. Even just one missed field could result in a downgrade.