In most cases, you can deny a Regulation E error resolution claim if the customer is in possession of the purchased merchandise or has returned the merchandise. In both circumstances, it is unlikely that the transaction was “unauthorized.”

However, it is possible that your customer received the merchandise as a result of an unauthorized transaction — for example, it is possible that the customer’s debit card number was stolen and used to sign up for a “coffee of the month” program. In such case, the customer may have received merchandise and either held on to or returned it, but that does not change the fact that the transaction was unauthorized.

For resources related to our guidance, please see:

• Regulation E, 12 CFR 1005.11(a)(1) (“The term ‘error’ means: An unauthorized electronic fund transfer . . . .”)

• Regulation E, 12 CFR 1005.2(m)  (“‘Unauthorized electronic fund transfer’ means an electronic fund transfer from a consumer’s account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. . . .”)