Sales Draft

A sales draft is a record indicating that a cardholder has made a purchase. A sales draft is provided at the end of a transaction made by a payment card, such as a credit card. It is a legally binding agreement between the cardholder and the organization, providing the good or service that the cardholder purchased.

When a payment card is used in the purchase a good or service, the swipe of that card into a terminal sets off a series of processes designed to determine whether the cardholder has the funds available to make the purchase. A card acquirer encrypts the cardholder’s information and sends it to the card processor, who decrypts this information, verifies that the cardholder has sufficient funds, and then sends a confirmation to the card terminal indicating that the transaction is valid. This entire process is typically instantaneous.

Once the card processor has approved a transaction the cardholder indicates that the sale is final by signing a receipt. The receipt is traditionally printed, but for some transactions the receipt may be provided electronically. The cardholder signs the physical receipt or electronic receipt acknowledging that a good or service has been purchased, and that he or she promises to pay the amount indicated on the receipt. The receipt then serves as a record of the transaction.

The sales draft contains specific information about the transaction, including the credit card number (typically the last several digits to ensure security), the transaction authorization number (TAN) provided by the card processing company, the card’s expiration date, the amount of sale, a description of what is purchased, and the signature of the cardholder. Merchants that issue the sales draft are required to keep a copy of the original signed paper for a specific period of time – typically several years – and will use the receipt as a reference if a chargeback is made or if the cardholder questions the transaction.

If a copy of a sales draft is requested in order to authenticate the transaction, there may be a retrieval fee charged by the credit card processor to the cardholder’s issuing bank. That fee is not part of a potential chargeback. A retrieval of a sales draft may occur if the cardholder sees charges they do not recognize and want more information, if the cardholder is disputing charges to their account, or if the credit card issuer suspects fraud because the charge seems outside the standard purchase behavior of the cardholder.