Understanding Retrieval Requests & Chargebacks
Table of Contents
- Retrieval Requests vs. Chargebacks
- Are there Retrieval Requests Fees?
- How to Manage Retrieval Requests
- How Often Should I Expect to Get Retrieval Requests
- Information Needed for RR Responses
- Frequently Asked Questions
In order to process online transactions a merchant must understand the differences between a RR and a CB and how to respond to both.
Retrieval Requests vs. Chargebacks
A Retrieval Request is simply an inquiry about a transaction. It can be filed by the issuing bank or the issuing bank can file one on their cardholder’s behalf if they do not recognize the transaction and/or suspect its fraud.
It is important to note that RRs do not have a financial impact to the merchant – they do not reverse the transaction – they can be a precursor to a future reversal or a CB on that transaction.
A chargeback is filed by the issuing bank/cardholder and the transaction amount is removed from the merchant account and temporarily placed back in the cardholder account until the matter is fully resolved. (CB cycle is 90-120 days)
Are there Retrieval Requests Fees?
Yes, the acquiring bank (Payment Processor/ISO/Merchant Bank) charges a small fee to process RRs and in some cases the Merchant Bank will charge the same fee as they do for a chargeback. Merchants should be hyper vigilant when signing up with a new Payment Processor – read the contract carefully so you understand the fees and negotiate accordingly.
Merchants pay up to $50 per CB and, in some cases they pay an additional fee for filing a rebuttal to the CB. Again, it is highly recommended to pay close attention to the fees when signing on with a new Payment Processor so you can protect your bottom line. Never blindly accept what is in the contract! The larger the merchant the more negotiating power they will have.
How to Manage Retrieval Requests
It is important to understand that a RR is more important than a CB – if a RR is ignored the merchant loses all CB rights for that transaction. Keeping that in mind merchants must have a process in place to manage all RRs in a timely fashion – Should be responded to within 2-6 days to reduce risk of missing the deadline.
Retrieval Requests will help you prevent chargebacks if handled right. This is an opportunity for merchants to issue a proactive refund and/or reach out to their customer and resolve any ongoing issues.
Having a plan in place for RRs is critical to processing online transactions! If they are overlooked or not responded to properly RRs can and will lead to a CB being filed – resulting in a financial impact to the merchant.
How Often Should I Expect to Get Retrieval Requests?
Years ago, about half the time issuing banks filed RRs prior to filing a CB. Today a merchant can expect to get about 5%-10%+ of their total CB count. In other words, if a merchant has 100 CBs then they will also have received 5-10 RRs. It doesn’t sound like a lot however; this adds up over time. More importantly, by initiating proactive refunds and reaching out to customers to resolve issues; merchants can use RRs to reduce their overall CB rate by 3%-8% or more. In high risk sectors a 3%-8% reduction in CBs is huge!
Information Needed for RR Responses
A RR packet provides far less content than a CB response packet – Generally the response will have 2-4 pages where a CB response can sometimes include up to 23 pages of content. It is important to keep in mind when responding to a RR you do not need to provide a complete list of compelling evidence the transaction is valid – Whereas when responding to CBs you must provide convincing proof or the case will be lost. RRs are not won or lost, they are either satisfied with the response or move into the next phase – a CB is filed. The following information should be provided when responding to a RR:
- Legible invoice/receipt
- Company and product information
- Service/product delivery information
- Transaction Information – Date, amount and ARN (Acquirer Reference Number)
- Authentication of transaction (phone, email, fraud screen, etc.)
- Refund info
- Notification if proactive refund was issued
- Prove refund was already issued
- Always include the ARN for both transaction and refund
- Always request that no further action be taken!
When contacting your customer, ensure you understand your customer’s needs and issue refund if possible to resolve issues. Merchants can send an email prior to calling their customer and send a follow up email once the issue is resolved.
Do I Need to Worry About RR Ratios?
Merchants are not affected by RRs and, more importantly, they do not count against your CB ratio. So, while merchants need to monitor their CB ratio very closely they do not need to worry about RR rates!
What is a retrieval fee for a credit card?