Disputing Chargebacks: Transaction Receipt Requirements

Table of Contents

1. Receipts and retrieval requests
2. When do banks use retrieval requests?
3. Transaction receipt requirements
4. Fighting chargebacks with proper documentation
5. What is a soft chargeback?
6. Does a retrieval request count against my merchant account?
7. What causes retrieval requests?

Transaction receipts are something many merchants don't spend too much time thinking about. After all, most customers won't ever see their receipt, and most modern POS systems will record all the transaction information you might need in a much more useful form, which means most receipts are never looked at by anyone.

What you might not know, however, is that your receipts can play an important role in fighting chargebacks. If they don't contain all the right information, you could be unknowingly throwing money down the drain over something you could fix in a matter of minutes.

While some merchants aren't in the habit of fighting chargebacks at all, it's become an increasingly important part of the modern business world. Chargebacks are on the rise, and many of those chargebacks are illegitimate, meaning that merchants can fight them and recover their revenue if they know what they're doing.

Part of the increase in chargebacks is due to the rise of eCommerce, but surveys have shown that once someone has filed a successful chargeback once, they're far more likely to turn to that option again in the future. That means that all merchants have cause for concern. While eCommerce merchants are at the greatest risk, retail merchants are far from immune to chargebacks themselves.

Not only does fighting invalid chargebacks keep your revenue from being stolen by those committing friendly fraud, it also allows you to learn more about why chargebacks are happening.

Researching the root causes of chargebacks in order to fight them more effectively can reveal important ways in which you can make improvements to your business operations.

All chargebacks must be fought with the right kind of evidence. Merchants who keep thorough and complete records of their transactions with customers are usually able to provide the necessary proof to dispute chargebacks that result from customer misunderstandings or friendly fraud, and an important part of those records is the transaction receipt.

Receipts and retrieval requests

For each chargeback reason code, the card networks have different rules for what evidence they will consider to determine its validity. Many chargebacks that result from customers failing to recognize the charge on their bank statement can be stopped early on in the process by providing transaction receipts.

There's an optional first step in the chargeback process called a “retrieval request,” in which the cardholder’s issuing bank asks the merchant’s acquiring bank for more information about the charge.

If the acquirer doesn't have that information stored, they will request a copy of the original transaction receipt from the merchant.

As you've no doubt noticed, the layout and content of transaction receipts can vary greatly. A drug store might give you a five-foot long receipt that contains an afternoon’s worth of reading, a local shop might print out a tiny slip of paper that’s barely legible, and a mechanic might give you a receipt on a full-size sheet of paper.

What size your receipts come in is up to you. The important thing is to make sure they meet the retrieval request standards imposed by Visa, Mastercard, and other major card networks.

When do banks use retrieval requests?

Not all networks mandate retrieval requests, but those that do typically require them at first for non-fraud claims. Cardholders don't ask for retrieval requests, but the bank may issue one based on the claims of the cardholder. 

There are several reasons a retrieval request might occur:

• The customer made a purchase and they don't remember making it. This could be due to a poor merchant descriptor. 
• The amount billed on their statement doesn't match a receipt or other agreed-upon payment. Sometimes things like tips, fees, or sales tax can confuse a customer after the fact. 
• The customer is attempting to engage in friendly fraud in order to make off with free goods and services. 

The retrieval process helps with these problems by sending the issuing bank information about the transaction before a chargeback takes place.

Some card networks have replaced the traditional retrieval request with new systems, such as Visa's Order Insight, that fill a similar role. These systems typically receive transaction information from a merchant's CRM directly, so the receipt itself doesn't matter as much, but you'll need to make sure the same information that would be required for a retrieval request is recorded in your system.

While retrieval requests have been largely phased out by Visa and Mastercard, American Express still uses these requests frequently, and it's always important to follow the rules laid out by the card networks regardless of their utility.

Transaction receipt requirements

There are two different sets of requirements for what information must be included on transaction receipts: one for card-present transactions and one for card-not-present transactions. Merchants who do business both in-person and online should either have different receipts for each or ensure that the receipt meets the requirements for both categories.

In-store receipts

From top to bottom, here is what your card-present receipts should contain if you want them to effectively swat down illegitimate chargebacks:

1. Merchant name and location
2. Transaction date
3. Merchant location code
4. Description of goods or services
5. Suppressed account number or token (Visa recommends suppressing the expiration date and all but the last four digits of the account number)
6. Payment card brand
7. Transaction amount, with applicable transaction currency symbol
8. Authorization code, if applicable
9. Space for cardholder signature, if applicable
10. Return/refund policy

Online receipts

Here are the requirements for card-not-present businesses, such as eCommerce merchants:

1. Merchant name and location
2. Transaction date
3. Merchant’s internet address
4. Description of goods or services
5. Payment method used
6. Suppressed account number or token (the same suppression guidelines apply)
7. Transaction type (purchase or credit)
8. Authorization code
9. Transaction amount
10. Return/refund policy

After an issuing bank sends out a retrieval request, the acquiring bank has a limited time to respond with a copy of the transaction receipt, so it's important for the merchant to fulfill any requests quickly.

Fighting chargebacks with proper documentation

Responding promptly to retrieval requests can help resolve cardholder issues before they turn into chargebacks. This has obvious and immediate benefits in terms of saving you time and money. Having clearly printed, legible, informative transaction receipts will minimize the number of retrieval requests you have to deal with.

Most of the time, they occur when customers don’t recognize a charge on their bill. Make sure that your correct current merchant name, along with a working phone number, is printed on cardholders’ bank statements next to your charges. If this information is out of date, your payment processor can help you update it.

Informative transaction receipts and merchant information will prevent customer confusion and reduce the chances of friendly fraud chargebacks and other time-wasting disputes.

Ensuring you have the right information on your receipts also helps ensure you'll have the documentation you need to fight the illegitimate chargebacks that come your way. If an issuing bank is expecting a piece of transaction information to be included and you don't have it, you're far less likely to see the chargeback reversed. Even if that information isn't crucial to your case, failing to include the right information makes you look sloppy, and may cause the person evaluating the dispute to view your evidence in a less charitable light.

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