As a company you must keep certain types of paperwork on file, like employment records and invoices, for both business and legal reasons. In some cases a merchant must also keep copies of credit card receipts on hand for a period of time. Learn when it’s safe to toss these receipts in the course of business.
Credit Card Receipts
After a customer purchases a product or service from your company using her credit card, you usually must provide her with a printed receipt for her records — particularly in the case of a face-to-face transaction. The receipt contains the amount of the transaction, the approval code, name of credit card holder and a place for the customer’s signature. You also retain a copy of the signed receipt for your records.
Why Keep Them?
If a case arises where the customer disputes the credit card charge from your company, you are responsible, as the merchant, for proving that it is valid. One of the first items the customer’s bank will request is a copy of the credit card receipt related to the transaction. The merchant service provider also needs to see the signed receipt in order to investigate the dispute on your behalf. If the customer’s dispute is approved because you can’t provide a copy of the signed sales receipt, you’ll have to pay expensive charge-back fees and also lose the amount of the sale as well as the product or service you sold.
When to Toss
Due to the possibility of disputes from customers it is not wise to throw out a credit card sales receipt just because the transaction has cleared your merchant account — even if you have already received the funds from the sale. Banks usually give customers about 60 days to dispute a charge per the Fair Credit Billing Act. It is a safe bet to keep the credit card receipt for at least three months. If you need the sales receipts specifically for business income tax reporting reasons, keep them on hand for at least six years.
If you must keep these sales receipts, store them in a secure, locked location since they contain sensitive customer information. Keep this sensitive data out of the reach of unauthorized employees and outside individuals to avoid issues with credit card related fraud or identify theft. Your merchant services agreement may outline specific rules for how to manage and store sensitive credit card data for customers according to Payment Card Industry’s Data Security Standard guidelines. PCI DSS is an organization that provides guidance regarding the management of customer credit card data.
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