There’s an old saying that into every life a little rain must fall. For merchants, that rain may start with a retrieval request, which often escalates to a full-blown chargeback storm. All businesses are likely to experience retrievals and chargebacks, and frankly there’s not a lot you can do to eliminate them completely. But it’s always a good idea to understand what you’re dealing with. We’ll begin by answering the question, “What is a retrieval fee?”
A retrieval request is the first step in the process used by a card-issuing bank to dispute a credit or debit card transaction charged by a merchant against a cardholder’s account. It is a formal request by the issuer to the business’s merchant services provider for a copy of the physical sales ticket for the transaction in question. When the provider receives a retrieval request, it typically assesses a charge to the merchant’s account, known as a retrieval fee.
A retrieval request sometimes leads to a chargeback. which is a credit card authorization that is reversed or disputed to the merchant services provider by the issuing bank or the cardholder. It is most often initiated by a cardholder by contacting the bank that issued their credit card to question a charge on their account.
There are many possible reasons for a chargeback, including dissatisfaction with the goods or services,
non-delivery of goods, fraud or a charge that the cardholder doesn’t recognize. If the issuer considers the claim to be valid, a chargeback leads to funds being returned to the cardholder. Technically, a chargeback is different from a refund, which is issued by the merchant directly to the customer.
Visa ® and MasterCard ® hold the merchant services provider completely responsible for all transactions that their clients perform, which leaves the provider liable for potentially huge financial losses if its member merchants operate improperly and generate a lot of chargebacks. Consequently, providers pass along the cost of retrievals and chargebacks to the merchant.
This is why merchant services providers carefully review and research each merchant account application to ensure that the applicant operates legally and without undue risk. All retrieval and chargeback terms and fees should be clearly outlined in the contract you sign with your merchant services provider. If incurred, they will appear on your monthly statement. A chargeback will generally cost a merchant the chargeback fee ($15–$30) plus the cost of the transaction and the transaction amount that was processed.
By working with a reputable merchant services provider like TransFirst ®. you can learn ways to keep retrievals and chargebacks to a minimum. Like you, we want to keep credit card processing as simple, secure and error free as possible.