Credit Card Processing Blog

If you’ve been accepting credit card payments at your hotel long enough, you’ve handled your share of copy requests – customer requests that you prove their participation in a credit card transaction at your establishment or the accurateness of the sale’s amount. Chances are that you’ve also seen a couple of these requests or more deteriorate into chargebacks, causing you to lose the associated sales, as well as any amounts you’ve invested in addressing your customers’ requests.

Your ability to quickly respond to all copy requests and provide sufficient information to prove that the charge to your customer’s card is accurate is critical to avoiding chargebacks. You should develop a process for handling copy requests and in this article I will offer some key points to consider when you do that.

What to Do When Your Customer Wants a Proof of the Transaction

Ideally, when a cardholder doesn’t recognize a charge on his or her credit card statement, they would contact you directly and try to establish the validity of the transaction. In reality, however, the cardholder often contacts the card issuer directly and asks for a proof of the transaction. The issuer then forwards the request to the processing bank which, if unable to provide the requested information, routes the request on to the merchant.

When you receive a copy request, you should do the following:

1. Fulfill all copy requests you receive.
2. Respond as quickly as possible. Each request must be fulfilled within a certain time frame, which will be specified by your processor. If your response is received past the deadline, you will lose the dispute, regardless of its validity.
3. Provide a legible copy of the original sales receipt. To avoid any future disputes, make sure that the copy clearly shows the following information:
   • Cardholder signature (if available).
   • Truncated card account number.
   • Cardholder name.
   • Guest name (If different from the cardholder name).
   • Dates of entire stay.
   • Transaction amount.
   • Authorization number.
   • Your hotel’s name and address.
   • All itemized charges.
4. If you send a fax, be sure to comply with your processor’s requirements.

Your processor will forward the provided information to the card issuer, who will then send it on to the requesting cardholder. At this point the question or issue the cardholder had with the transaction is typically resolved. However, if the information you’ve provided is insufficient to resolve the issue, the transaction will be charged back and you will lose the disputed amount (which can in some cases be smaller than the entire transaction amount).

The Takeaway

All copy requests should be treated with equal attention, regardless of the transaction amount. Remember that you need to keep the number of chargebacks under one percent of the total sales transaction count for any given month. So when it comes to calculating your chargeback ratio, a $50 chargeback counts every bit as much as a $5,000 one.

Beyond chargebacks, you should also have in mind your customer’s satisfaction when responding to a copy request. While there is always a possibility that your customer has no legitimate complaint and is simply trying to game the system, it is far more likely that there is a real issue that needs to be resolved and you should do just that.

Learn how to lower your card acceptance cost

Learn how to accept credit and debit cards at the lowest processing costs. The Payment Card Acceptance kit contains a video and an e-book:

• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).
• E-Book – Payment Card Acceptance Guide (19 pages).

American Express’ chargeback process is simpler than the one for Visa and MasterCard transactions, because American Express is the only financial institution involved in it. American Express, like smaller rival Discover, is a bank that both issues the cards bearing its logo and provides payment processing services for its cards to merchants.

By contrast, Visa and MasterCard are associations of member banks. The associations neither issue cards, nor contract directly with merchants, their members do. When a transaction is charged back, the resolution process involves the bank that issued the card (the issuer) and the bank that provides credit card processing services to the merchant (the processor, also called an acquirer). If the two banks cannot resolve the dispute, Visa or MasterCard steps in to settle it.

When an American Express cardholder disputes a transaction, the bank first reviews the transaction information it has available in house. Based on this review, AmEx takes one of the following actions:

• Informs the cardholder that the charge is valid.
• Issues an immediate chargeback to the merchant’s account.
• If it cannot resolve the dispute without additional information, American Express sends an inquiry to the merchant. The merchant must respond to the inquiry within 20 days.

Most often, American Express contacts the merchant for additional information regarding the disputed transaction. Such inquiries inform the merchant of the reason why the cardholder is disputing the transaction and list the specific information the merchant needs to provide to support the charge, as well as the date by which the response must be received. If the response is received past the due date, the chargeback will not be reversed.

The merchant’s response to the inquiry can take one of the following forms:

• Issuing a credit to the cardholder’s account or stating the date when the credit was previously issued.
• Authorizing a chargeback.
• Issuing a partial credit and providing supporting documentation of the transaction and reason for the partial credit.
• Supporting the validity of the charge with itemized and / or signed supporting documentation.

The merchant may have the chargeback reversed if it was processed in error. If the charge is substantiated, American Express sends the cardholder an explanation or documentation and closes the inquiry.

If a response is not received within the specified time frame (20 days), or the response does not adequately substantiate the charge, the merchant’s account is debited, credit is applied to the cardholder’s account, and the case is closed. Chargebacks that are issued for insufficient reply or no-reply are not reversed.

A chargeback inquiry can be re-opened if a cardholder provides new or additional information, after American Express has reviewed the supporting documentation, provided by the merchant to the original inquiry, and has decided that the charge is valid. A cause for re-opening an inquiry could be, for example, a claim by the cardholder that the charge is fraudulent. In such cases, the merchant will be asked to provide additional information to support the validity of the transaction.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

When an American Express cardholder disputes a transaction, the merchant is asked to either issue a credit or to provide documentation proving that the charge is legitimate.

The following table lists the specific documentation that, depending on the inquiry, will be required to support the merchant’s claim.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Discover’s ticket retrieval process is equivalent to what Visa calls copy requests: requests for information regarding a particular card transaction. These requests are typically initiated by cardholders who contact Discover to dispute or request clarification on a particular charge on their card accounts. Discover then contacts the merchant in writing and requests documentation regarding the transaction.

Once a request is received, the merchant has 20 business days to provide Discover with a copy of the sales receipt or a refund check. Discover can send the request by mail, email or by other electronic means. If the merchant does not respond within 20 business days, Discover may return the transaction to the merchant as a chargeback.

The sales receipt or a copy of it received by Discover is then sent to the cardholder for review or for identification of the card account number. Merchants can also provide a substitute transaction slip for some transactions, which needs to include the following information:

• The card account number.
• The cardholder name.
• The card expiration date.
• The transaction amount.
• The transaction date.
• The authorization code.
• The merchant name and location.
• A description of the merchandise / services.


For Mail Order / Telephone Order (MO / TO):

• The shipping address.


For transaction completed at self service terminals:

• The self service terminal locations code or city and state.


For transactions completed at an automated fuel dispenser:

• The service station identification number.
• The invoice number.

If any of the above items is missing, Discover can file a dispute, which can lead to a chargeback. A dispute can also be filed if the submitted copy of a sales receipt is illegible or incomplete. Such chargebacks are designated with code IC: “Requested Item Illegible Copy” and are equivalent to Visa’s Reason Code 60: “Requested Copy Illegible or Invalid.” Most of these chargebacks can be prevented by implementing the following simple measures:

• Do not reduce the size of the copies. All copies you make of transaction receipts should be the same size as the originals. Reduced size can produce images that are hard to read.
• Place your company’s logo where it will not obstruct the information. Make sure your company’s logo is printed on the sales receipt in a way that does not obstruct the transaction information.
• Change the printer’s ribbon regularly. Replacing the printer’s ribbon regularly will eliminate faded, hard-to-read sales receipts.
• Keep the top copy of the receipt. Keeping the top (white) copy of the sales receipt ensures better quality copies in the future. Give the colored copy to your customer.

For more on managing copy requests, review our previous article on the topic. Although it was written to address specifically Visa and MasterCard requests for information, the same general rules apply to Discover’s ticket retrievals.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Both Visa and MasterCard use special Reason Codes to designate chargebacks resulting when a card issuer receives a complaint from a cardholder stating that a merchant did not issue a refund when a purchased product was returned or services canceled, or a refund was issued but for a reduced amount, without proper disclosure. Visa uses Reason Code 85 and its MasterCard’s equivalent is 4860.

What causes these chargebacks? Chargeback Reason Codes 85 and 4860 may be caused because the merchant:

• Did not issue a credit.
• Issued the credit but did not deposit it with its processing bank in time for it to appear on the cardholder’s next statement.
• Did not issue a credit, because it does not accept returns, but did not properly disclose its return policy.

How to manage such chargebacks? The time frame to respond to Reason Codes 85 and 4860 is 120 days. Your response will depend on the particular transaction circumstances and the actions you have taken (or not) so far:

• Returned product or cancellation was not received. If you never received the returned merchandise or the service was not canceled, contact your processor immediately and explain the situation.
• Product was returned contrary to the disclosed policy. If the merchandise was returned not in the manner described in your return policy, provide your processor with documentation proving that the customer did agree with it and signed it. Keep in mind that, if your return policy is located on the back of the sales receipt, you will have to obtain your customer’s initials there, in addition to the signature on the front. When providing supporting evidence, you must send copies of both the front and the back of the receipt.
• Credit was issued. If you did issue a credit for the returned merchandise at issue, contact your processor and provide them with the date and amount of the credit.
• Credit is not yet issued. If you did not issue a credit for product that was returned according to your return policy, there is no remedy and you should accept the chargeback. Do not process the credit now, as the chargeback has already done that for you.

How to prevent chargeback Reason Codes 85 and 4860? Many of these chargebacks can be prevented by implementing the following best practices:

• Issue credits promptly and as agreed. If merchandise is returned according to your return policy, make sure to promptly issue a credit and to immediately notify your customer that it has been issued.
• Only issue credit to the card used in the sale transaction. Credit for returned merchandise should only be issued to the same card that was used in the original transaction. Ask your customers to retain the credit receipt until they see the credit posted on their accounts.
• Gift returns. If product was returned by a gift recipient and not by the cardholder, the credit to the gift recipient must be in the form of cash, check or a store credit. Be advised that, if the credit is to be issued to a bank card, it can only be issued to the one used in the transaction.
• Return policy disclosure. Make sure that your return policy is posted on the sales receipt. If not and until you do that, present an additional document (an invoice or contract) to your customer to sign. If the return policy is on the back of the receipt, make sure the customer initials it.
• No-return policy disclosure. If your organization does not accept returns, your policy should be clearly posted on the sales receipt and at checkout, for both virtual and physical stores.
• Obtain customer signature. Customer signature should always be obtained on your return policy; a verbal disclosure is not enough.

While it is not likely that you will ever be able to completely eliminate this type of chargebacks, developing a customer-friendly return policy will go a long way toward minimizing them. Customers expect that, if they are not satisfied with their purchase, a return will be accepted and a full refund issued. Otherwise, they will probably file a dispute with their credit card company. You will want to avoid such disputes, even if you believe you will win them, because customers are likely to broadcast them on the internet and damage your reputation. Customer disputes and resulting chargebacks are also closely monitored by processing banks that will promptly freeze your merchant account, if there is any uptick in such activities.

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).