What is a Retrieval Request? Are They Being Phased Out?
A retrieval request—sometimes called a “soft chargeback”—is a method of obtaining a copy of the paperwork to validate a transaction. The request comes from the credit card issuer or cardholder, and goes to the acquirer or merchant. Most such requests are made to support an investigation into fraud, validate a chargeback, or in response to a customer’s request (such as needing it for their records).
While retrieval requests are not chargebacks, they traditionally precede a chargeback. Merchants should think of a retrieval request as an opportunity to stop a chargeback before it’s filed, either by issuing a refund or by providing enough information to resolve the issue.
At the same time, you can’t depend on retrieval requests as a warning system for chargebacks. That’s especially true now, as the card schemes are slowly phasing out their usage.
Visa® no longer mandates the use of retrieval requests. For their part, Mastercard® doesn’t use them at all, except for transactions involving Maestro® cards. Other card schemes, including Discover® and American Express®, still require retrieval requests, at least at the time of this writing. However, that is liable to change soon.
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Understanding Retrieval Requests
For the networks that do still mandate retrieval requests, the process usually starts with either the cardholder acting through the issuer, or from the issuing bank itself. Cardholders seldom ask for a retrieval request per se; more often than not, they’re simply calling the bank about a charge on their statement. These requests are often based in either misunderstandings or perceived errors. For example, here are four common reasons why customer make transaction inquiries:
- The customer doesn’t remember making a purchase. In this scenario, cardholders may feel the merchant or an identity thief is trying to push through unauthorized charges, so it makes a certain amount of sense that the customer would contact the bank first.
- The amount on the statement doesn’t match the agreed-upon transaction amount. This could reflect an innocent move, such as trying to add a tip to a restaurant bill after the transaction was approved. Then again, the cardholder may feel it is an illegitimate act on the part of the merchant, and therefore call the bank.
- The customer doesn’t recognize transaction details appearing on the statement. This is most often caused by merchants having unclear billing descriptors. For example, a descriptor that refers to a holding company instead of the name of the merchant.
- The customer is engaged in “friendly fraud.” Sometimes, it is cardholders themselves who engage in fraud. Buyers may attempt to get something for free by falsely complaining to the bank that an order was wrong or not received (sometimes called “cyber shoplifting”).
As you can see, customers may be ready to file a chargeback when they call, or they may simply be looking for clarification. In either event, a call to the issuing bank about an unrecognized charge results in a bank representative issuing a voucher, either to you or your acquiring bank, formally requesting information in support of the transaction. There is usually some type of retrieval fee involved.
In some cases, the bank itself may require more information due to a suspected processing error. This can occur when receipts are illegible in some way:
- The ink on the original receipt was too light to read.
- The color of the receipt originally submitted made the information illegible.
- The print on any copies made of the original sales slip was too small to read.
Because the acquiring bank could have all the requested information, the actual merchant may not be involved in—or even aware of—a retrieval request made by the issuer. Theoretically, the entire process could be handled by the banks; this is not, however, how the process normally works.
The Retrieval Request Process
When an issuer makes a retrieval request, the bank is looking for what is called a transaction information document (TID). This term encompasses sales receipts, invoices, tracking numbers, shipment records, and/or other records of transactions. The normal process goes something like this:
Time Restrictions for Retrieval Requests
Retrieval requests are time-sensitive. After you receive a retrieval request from the bank, you have between 10 and 20 days to resolve the issue. The exact timeframe is set by the issuing bank.
There are other time considerations as well. For instance, the cardholder’s bank typically has up to 18 months from the date of sale to file a retrieval request. That means you and/or your acquirer must maintain detailed records of merchant account activity for an extended period, depending on the card scheme regulations.
Mastercard, for example, mandates that an acquirer retain a record of each transaction it receives or sends for a minimum of 13 months. During that time, you must provide a copy of the receipt to the issuer whenever asked. By contrast, Visa tell merchants they must retain transaction receipts for a minimum of 120 calendar days after the processing date (this requirement applies to transactions that required a cardholder signature). In both cases, a longer period of recordkeeping may be required by applicable law or regulation.
There are similar time constraints for images deemed incorrect or illegible, and for fulfilling the retrieval request. Again, while the card networks have set time limitations in place, the issuing banks have the final say and can mandate stricter timeframes. Failing to respond within the timeframe will not only result in a chargeback, it may also revoke the merchant’s right to dispute.
The End of Retrieval Requests?
As we mentioned earlier, retrieval requests may soon be a thing of the past. Visa and Mastercard both recently introduced tools aimed at reducing illegitimate chargebacks before they’re actually filed.
Last year’s Visa Merchant Purchase Inquiry (VMPI) initiative gives merchants a chance to address transaction issues early on in the payment process. In effect, it provides the same basic service as retrieval requests, but does so automatically and in real time.
The optional VMPI system applies to card-not-present transactions, and merchants must enroll in the program through a Visa-certified facilitator. Nevertheless, Visa no longer requires a retrieval request before filing a chargeback. For Mastercard, the option is available (but not required) only for transactions involving the Maestro card.
What This Means for Merchants
It seems likely that more and more card schemes will follow the lead of Visa and Mastercard. Schemes may eliminate their requirements and, at some point, even the option of using retrieval requests. New automated systems promise to be much faster, safer, and more accurate. Still, for now, issuers still have the option.
What probably won’t change is your role in the process as a merchant, which happens before the requests are even made. Almost all the causes behind retrieval requests can be proactively eliminated by the merchant.
You should check how your billing descriptors appear on customers’ credit card statements. Be sure the descriptors point out the name of the store or service as clearly as possible. In addition, you need to work with your acquirers to ensure essential details are captured for each transaction.
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