What Is a Sales Draft?
Sales draft is an agreement which is generated at the end of the successful transaction made by a cardholder to indicate that the given purchase was completed. Sales draft, also known as the sales agreement, is a legal binding document between the business entity and the cardholder for the goods and services availed from the entity.
Understanding the Sales Draft
Once a cardholder swipes his/her credit card for a particular or service offered by an organisation, bank, or financial institution, which owns the credit card account is informed of the transaction request. Once the request is verified and approved with respect to the cardholder’s eligibility to purchase the goods or services, the transaction is then processed by the financial institution.
The transaction is generally processed in an instant after which a digital or physical copy of the sales draft is issued by the financial institution for the cardholder to sign and verify that the cardholder will pay for the amount indicated in the receipt.
Why is the Sales Draft Retained?
Once the sales draft is issued, a copy of the signed document is retained by the merchant. The document will serve as a reference if a chargeback is initiated or the transaction is questioned by the cardholder.
However, a retrieval fee is levied by the credit card processor in case the cardholder requests a copy of the sales draft to verify the transaction. This fee is taken up by the cardholder’s issuing bank and is not included in the chargeback.
A cardholder can request for retrieval of the sales agreement if there is a dispute in the charge to their credit card account, or if there is a suspicion of fraudulent charges outside the cardholder’s usual purchase behaviour.
