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).

We have written about credit card receipts in multiple articles on this blog in the past, however a recent episode involving one of our merchants has reminded us of the importance of the subject and prompted us to re-open the topic.

The Story

The merchant at issue, who will have to remain anonymous, had just signed up with us, switching from a competitor. It is a small furniture retailer, doing about $150,000 in revenues per month from brick-and-mortar operations. The merchant’s average sales amount was about $650, so they had about 230 sales transactions per month.

The first month they had two disputes from customers who claimed that the merchant had not honored their return policy and had not issued a credit. One of the disputes resulted in a chargeback. The second month there were five disputes, again involving refund issues and this time three of them resulted in chargebacks. This is when the merchant’s problems began.

The Issue

Merchants with a higher average ticket amount fall into a special risk category, even if they accept payments in a face-to-face setting. The reason is that their transaction count is typically fairly low and even a small number of chargebacks can quickly get them into trouble with their processor. This is exactly what happened with our merchant.

Visa and MasterCard require processors to ensure that merchants keep their chargeback rates at below one percent. Processors are very strict in enforcing this requirement, because they get penalized when merchants exceed that threshold. So strict, in fact, that often merchant accounts get suspended when the chargeback rate reaches one half of one percent.

In the case of our merchant, their chargeback rate for the second month was 1.3%. This was an unacceptably high level, even though they only had three chargebacks.

The Cause

We initiated a review of our merchant’s sales and payment processing procedures and didn’t see anything out of the ordinary, until we reviewed their sales receipts. They had provided all the required information on the front of the receipts and the return policy was on the back of it, which is perfectly fine. However, there were two issues that we identified:

• The main problem was that the merchant had recently changed their return policy from unconditional credit (refund) to store credit and had failed to update the policy printed on the back of the transaction receipts.
• The other issue was that the merchant did not require customers to accept the terms of the credit policy by signing, or at least initialing, the back of the receipt.

Customers were right when they were requesting a full refund for returns, rather than a store credit, even though the latter was the merchant’s current policy.

The Credit Card Processing Takeaway

The merchant updated their receipts to reflect the current refund policy and customers are now required to acknowledge acceptance of the policy’s terms by initialing the back of the receipt. It’s been three months since then and they’ve only had one chargeback, caused by an unrelated issue.

So the problem was resolved, even though the merchant chose to ignore our suggestion and reinstate their unconditional credit policy, which we believe is the most customer-friendly one.

Take a look at your own policies and make sure they are up to date everywhere they are displayed. Then make sure that you require customers to agree to your policies, before completing a transaction. You just may spare yourself a headache down the road.

Accept card payments quickly and safely

Accept credit and debit card payments at the lowest processing costs. You will get:

• Free merchant account set-up.
• No fixed monthly fees.
• 24 / 7 customer support.

MasterCard has established specific requirements regulating the type of information that can and cannot be included in transaction information documents (TIDs) that are used to document transactions involving their cards.

TIDs can be one of several types:

• Retail sale.
• Credit.
• Cash disbursement.
• Information.

If the merchant uses a manual imprinter to produce a TID, it is called a formset or slip. If the merchant uses an electronic point-of-sale (POS) terminal, the merchant can substitute a terminal receipt for a formset.

TIDs must not include the following information:

• The PIN or any fill characters representing it.
• The CVC 2, which is the three-digit code located on the back of the card, to the right of the signature panel.

Formsets need to contain the following:

• Retail sale and credit slips need to provide a space for the description of the products or services sold by the merchant to the customer and their cost.
• Adequate spaces for:
  • Customer’s signature.
  • Card imprint.
  • Date of the transaction.
  • Authorization number (except on credit slips).
  • Sales clerk’s initials or department number.
  • Currency conversion field.
  • Merchant’s signature on credit slips.
  • Description of the identification document provided by the cardholder on cash disbursements and retail sale slips for certain unique transactions.
• Identification of the slip as a retail sale, credit, or cash disbursement and of the receiving party of each copy.
• The customer copy of the formset should have the following message printed out: “IMPORTANT-retain this copy for your records,” or words to similar effect.

Terminal receipts need to identify the transaction as a retail sale, credit, or cash disbursement and contain the following information:

• “Doing Business As” (DBA) merchant name, city and state, country, or the point of banking location.
• Transaction date.
• Card account number.
• Transaction amount in the original transaction currency.
• Adequate space for the customer’s signature (required on merchant copy only).
• Authorization approval code (except on credit receipts).
• Merchant’s signature on credit receipts only.

Account number truncation and expiration date omission requirements. The cardholder receipt generated by all electronic POS terminals, including ATM receipts, must reflect only the last four digits of the account number. All preceding digits must be replaced with fill characters, such as “X,” “*,” or “#,” not with blank spaces or numeric characters. It is recommended that the merchant copy is also produced in the same way. Additionally, all cardholder and merchant receipts, generated by electronic POS terminals, must not show the card expiration date.

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).

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).

Visa uses Reason Code 60 to designate chargebacks resulting when a copy of a sales receipt, requested by the card issuer, is illegible, incomplete or something other than the requested item. MasterCard does not have a reason code that exactly matches Visa’s 60.

What causes these chargebacks? Chargeback Reason Code 60 may be caused by one of the following issues:

• The terminal’s printer ribbon was worn and the ink was too light.
• The printer’s paper roll was nearing its end, and the colored streak indicating this made some of the payment information illegible.
• The copy was on hard-to-read colored paper.
• The carbonless paper of the original sales receipt was mishandled, causing black blotches and making copies illegible.
• The original sales receipt was copied at a reduced size, resulting in illegible copies.
• The document submitted was not a copy of the sales receipt at issue.

How to manage such chargebacks? The time frame to respond to a chargeback Reason Code 60 is 7 days for U.S. transactions and 120 days for international ones. Your response will depend on the particular transaction circumstances and the actions you have taken (or not) so far:

• Legible or complete copy is available. Resubmit the copy, if possible, and make sure it is legible.
• The sales receipt is incomplete. If you don’t have or cannot produce a legible copy, accept the chargeback. Do not issue a credit at this time, as the chargeback has already performed this function.
• The sales receipt is incomplete and the transaction is fraudulent. In such cases, you have no re-presentment rights, as the cardholder cannot be expected to accept a fraudulent charge. You should accept the chargeback.

How to prevent chargeback Reason Codes 60? Most of these chargebacks can be prevented by implementing the following measures:

• Copying sales receipts. Make sure the copies you make of sales receipts are the same size as the originals. Reduced size can produce images that are hard to read.
• Change the ribbon of your point-of-sale (POS) printer. Regularly changing the printer’s ribbon will eliminate faded, hard-to-read sales receipts.
• Change the paper of your POS Printer. Changing the printer’s paper roll when the colored streak first appears increases the legibility of sales receipt.
• Keep the white copy of the sales receipt. Keeping the white copy of the sales receipt ensures better quality copies in the future. Give the colored copy to the customer.
• Handling carbonless and carbon-back paper used for sales receipts. Handle carbonless paper and carbon-back paper carefully. Carbon-back paper appears black when copied. Any pressure on carbonless and carbon-back paper during handling and storage causes black blotches, making copies illegible. Always keep the top copy.
• Placing company’s logo on sales receipts. Make sure your company’s logo is printed on sales receipts in a way that does not interfere with the transaction information.

As you see, preventing this type of chargebacks largely depends on the way you handle sales receipts. A rule of thumb that can be used here is that if you can read the copies of your sales receipts, issuers will also be able to read them and you will never see a Reason Code 60.

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).