Perhaps you spent a restless night, and awoke with a glimmer of the nightmare that kept restful slumber at bay. That lingering memory nagged repeatedly at the edges of every waking thought today.

Is that why you stumbled a bit when delivering the new training session during your employee meeting this afternoon? A word hovered just out of reach… On the tip of your tongue… Until zing, there it was.

You retrieved the word just in time and pulled it off. Not another hitch in your delivery — every speaker’s nightmare averted. Congrats!

If only transaction information was as simple to retrieve, not scattered around your office or floating somewhere in the Cloud. Easier access to the online orders processed last month, the confirmation emails sent, and the shipping notices you’re sure went out, but can’t seem to find…

…Would make answering the retrieval request received this morning so much simpler. You’ve never gotten one before, and aren’t sure what it means or why it’s important to respond so quickly.

If you can’t explain retrieval request vs. chargeback to yourself, much less to your team, keep reading. Then, work on getting your data ducks in a row.

Retrieval Request vs. Chargeback — How They Differ

When payment card statements arrive each month, cardholders sometimes don’t recognize charges. What’s the cardholder to do? Often, they ring the issuing bank to say they don’t recognize a charge… Setting in motion a request by the bank for information in support of the transaction.

A retrieval request is simply a request by the bank for information to support the transaction. The bank wants to see legible copies of the actual sales ticket (or online order), and the transaction authorization.

(American Express calls these requests “inquiries” while Visa, MasterCard, and Discover use the label “retrieval.” Some banks call them “soft chargebacks” — your first clue to why retrieval requests matter.)

Of course, the transaction may be legitimate, but the cardholder doesn’t recognize it. Other possibilities include a processing error, incomplete or inaccurate transaction information, or the worst: potential fraud.

Merchants reply to retrieval requests by providing the requested information to the bank. Also useful is to reach out to the customer by email or phone to discuss their issue. Doing so may help to resolve it, and avoid a chargeback.

Chargebacks occur when a cardholder requests a refund for a transaction directly from their issuing bank. The customer may declare the transaction illegitimate, because the goods weren’t delivered — weren’t as advertised — or arrived damaged — and she demands her money back.

The issuing bank supports the cardholder and contacts the merchant’s bank to put a hold on transaction funds. The cardholder receives a refund, and the merchant receives a penalty in the form of a chargeback fee.

Merchants can dispute chargebacks by providing transaction records, shipment records, proof of delivery, copies of any correspondence with the customer, and proof of money transfer — if the merchant already refunded the purchase.

Specific and limited timeframes for response vary, and must be honored.

If the documentation he provides supports the merchant’s dispute, a chargeback reversal occurs.

Is it any wonder that good record keeping is important? Responding to retrieval requests or disputing chargebacks efficiently and timely become more difficult when your data ducks aren’t organized into nice, neat rows.

Managing chargebacks well improves your online business success. Read more chargeback basics here, including steps to take with your website, business processes, and data to help prevent fraud-related chargebacks.

Why You Should Care

The good news about retrieval requests is that no money changes hands — yet. A retrieval request simply means that a cardholder or the issuing bank needs more information about a transaction.

But the bad news is that a retrieval request denotes the first step in the chargeback process. If you don’t respond to a retrieval request within the timeframe (usually 10 to 20 days), a chargeback occurs.

Retrieval request vs. chargeback important considerations include:

• No money changes hands due to a retrieval request — yet. Merchants retain the money made from the sale during the inquiry. Once a chargeback occurs, merchants lose the money from the sale (it’s refunded to the customer) and also pay chargeback fees.
• Plan to resolve the inquiry in a timely and efficient manner. No response from a merchant means that a chargeback is issued with the reason, “requested item not received.” Should that occur, the merchant loses reversal rights for the transaction too.
• Merchants may issue customer refunds during the investigation period without penalty. Contacting the customer via phone or email to address their questions and seek a solution might satisfy both parties. If the customer doesn’t respond, issuing a refund directly may solve the problem and avoid a chargeback.

Remember that credit card brands set and enforce these rules. Keeping your online business viable is at stake, so if you’ve been ignoring the issue of retrieval request vs. chargeback, it’s time to pay attention!

Let PayArc Help

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Merchants everywhere prepare this time of year for shops abuzz with gift givers and gift recipients bringing stuff back to a store — more elegantly called “returning goods.”

At the same time, folks who shopped online (or whose relatives and friends did) try to figure out how to return items: Clothing that doesn’t fit, goods damaged in shipping, or the book they’ve already read.

Dealing with holiday returns requires a lot of merchant focus and energy too. But what else fills merchant minds this time of year?

While celebrating a successful 2017 holiday season, merchants want to avoid chargebacks when they can — and experience a successful start to this retail year by attracting new and return customers.

There’s a way to accomplish it all in one go. Let’s take a look.

Holiday Season — Return Season — Chargeback Season

One follows the other, meaning there’s no rest for the weary eCommerce merchant. The months following annual winter holidays, dubbed “chargeback season” or “Returnuary” by clever merchants can indeed cost them dearly.

Yes, chargebacks may be a cost of doing business. But every merchant’s goal should be to avoid chargebacks and associated fees whenever possible.

Which is why helpful and clear return policies and well-trained staffs make a huge difference to your success. When returns are too difficult or time consuming, customers become frustrated. Inevitably, some will opt to file chargebacks so they can get their money back…

…And that means taking the money from you. Ouch.

Negative chargeback consequences include:

• Lost revenue;
• Lost operating costs (making sales and shipping products);
• Fines, fees, and penalties added by banks and card brands;
• Lost merchandise when either true or friendly fraudsters strike;
• Management challenges associated with lag time between purchases and refunds that skews revenue reporting.

Of course the worst penalty for an eCommerce merchant would be termination by the acquiring bank of a merchant account, needed to accept payment cards in the first place.

Cancellation occurs if a merchant’s chargeback rate is too high (greater than 3%). Card sales finished — the end of many an online business. So eCommerce merchants try to avoid chargebacks all the time, not least during holiday return seasons.

Procrastination Pushes Chargeback Season to Mid-Year

Online merchants can be forgiven for believing their 2017 holiday shopping season is done and dusted. But believe it or not, 5% of U.S. gift givers are still shopping, taking advantage of sales and gift cards they received.

Said Matthew Shay, NRF President and CEO, “Even though many consumers got a head start with holiday shopping early in the season, millions more are leaving their gift buying to the last minute and beyond.” The good news? Procrastinators represent more customers.

So it’s not too late to avoid chargebacks from first quarter sales — even if you need to replace the return policies in place prior to year-end. Just get to it! Update your website following best practices below.

For ideas, check out the U.S. News & World Report guide to standard and extended holiday return deadlines (and other details) for top retailers during the 2016-2017 holiday season. Benefit from seeing how the big guys do it. Who knows? Good ideas from others may help you avoid chargebacks too.

And be sure to continue monitoring new sales for potential fraud. Just because the holidays are over, bad guys haven’t stopped being bad.

Savvy Merchants Know Returns Present Opportunities — Delight Your Customers and Avoid Chargebacks

Be Prepared — good advice that isn’t just for Boy Scouts. Local retail stores and eCommerce businesses do best when they’re poised to process returns in ways that delight customers.

Be sure to have adequate numbers of trained staff on hand, specifically assigned to handle returns.

Publish a clear return policy. If certain items are excluded (like sale items), say so. Publish the policy and place it prominently throughout a store and near cash register(s). Print information on store receipts.

Publish the policy on your website. Include a page in the main navigation, repeated on product pages and throughout the checkout process. Consider requiring customer acknowledgement via a pop up checkbox before a transaction completes.

Include in the policy:

• Items that can (and cannot) be returned or exchanged
• Deadline for returns or exchanges (after purchase)
• The required condition, including original packaging (or not)
• How and when customers can make returns or exchanges
• Whether a receipt is required (or not)
• Who pays for return shipping (if applicable)
• How refunds will be issued (cash, payment card credit, store credit, and the like)

Creating a special holiday return policy helps customers who buy gifts several weeks before a holiday. By allowing returns for an extended period, everyone is covered — including gift recipients.

For example, allow returns up to 90 days from date of purchase, or by January 31st — whichever comes first. Be flexible, but clear; include information about what customers can expect.

If you wait to receive returned items, refunds may take some time. Say so up front. Above all, make returns easy for customers. Good advice at all times, it helps merchants avoid chargebacks year round.

Generate printable packing slips with return instructions, and anything else you believe will streamline the process for customers. Have them fill out a special form including email address. Promise to tell them when you receive their return, and when it will be processed.

Customers appreciate the courtesy — and you can piggyback new sales or discount opportunities in the email message you’ll send when their return arrives. Then stay in touch unless they opt out.

Wouldn’t it be great to convert every return into a new sale, and every gift recipient into a new customer?

Conclusion

When you’re in search of the eCommerce solution that both saves your money and gives you peace of mind, look no further than PayArc.

PayArc’s industry leading payment processing solution gives you all the tools you need to accept payments online, while lowering your risk to fraud and giving you some of the lowest rates in the industry.

We provide all-in-one eCommerce solutions including dozens of shopping cart integrations to choose from — fraud and risk tools — robust reporting tools — and PCI-DSS Level 1 protection.

PayArc helps take the headache out of credit card processing — so you can process with confidence. We want to act as your payments advisor and consultant, not only your processor.

You have a business to run. Our business is to help you run it better. Give us a shout today.

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