Keep Your Receipts When You Pay With a Credit Card: A Cautionary Tale

Over last year’s holiday break from school, my husband and I took our kids on a cruise. We planned our trip diligently for more than six months prior, shopped around for a good deal, and thought up all kinds of ways to save. Ultimately, that meant booking an inside cabin and cruising with MSC Cruises, one of the most affordable cruise lines for families.

We also saved money by avoiding the more pricey cruise excursions and coming up with day trips we could do on our own. With beach stops in the Caribbean, it’s pretty easy to create your own beach day with a quick taxi ride. We also spent our day in Guadeloupe on the ship to save even more, since it was one of the most expensive islands we visited.

For our cruise stop in Antigua, I looked ahead for beach options that would be fun for the kids and somewhat affordable. Ultimately, that led me to Darkwood Beach — a family-friendly beachfront with an on-site restaurant, chairs and umbrellas you can rent, and a floating obstacle course for the kids. Based on my accounting, I figured we could get away with spending $150 for the day — $40 round-trip for a taxi and $110 on food, the obstacle course, and chair rentals. That’s a lot by some standards, but considerably less than we would pay for a cruise ship excursion for four people. After all, most organized excursions on our ship were $80 per person or more.

Why You Should Save Your Credit Card Receipts

We did go to Darkwood Beach, and we had a great time! We paid $15 each for the kids to play on the floating obstacle course for an hour, and we were happy to find they charged only $15 for two chairs and a shade umbrella. Unfortunately, we went slightly over our food budget at the restaurant. One big lunch and a couple of buckets of beer later, we owed $122.

I paid with a credit card as I always do, mostly because it’s convenient and I love earning credit card rewards. Our waiter changed the currency on our bill to around $329 in Eastern Caribbean currency, which was fine and correct due to the exchange rate. I added $60 in the local currency and totaled my bill to $389 EC. I didn’t think about it again.

Related: My Favorite Ways to Save Money on Travel

Unfortunately, I quickly realized that something was wrong when, a few days later, one of the friends we were cruising with pointed out that his credit card had been overcharged. I checked my account and, sure enough, my credit card was overcharged by around $38 USD.

I immediately sent Darkwood Beach Bar and Restaurant a message on Facebook, and it didn’t take long to figure out what happened. They told me via text that they changed my tip to $60 USD, despite the fact that my card was charged in Eastern Caribbean and I totaled up the bill plus tip in the local currency. I asked them to change it because I did not tip over $60 USD on a $122 USD bill, but they wouldn’t.

Filing a Dispute with Chase

Fortunately, I had paid with my Chase Sapphire Reserve card, meaning I could easily dispute the charge. The next time we were near land, I called the number on the back of my credit card to file a dispute.

I explained what happened to the Chase agent, and she was able to immediately refund the disputed amount of around $38. She told me that the restaurant would have around 90 days to respond to the disputed amount. If they didn’t respond, I would automatically win and keep the refund made to my account. If they responded and stated I was wrong, I would have to submit proof that they overcharged my account.

This is why I always keep my receipts — at least until charges post to my account. If you don’t keep receipts for restaurants and other charges made to your credit card, you’re at the mercy of the retailer to treat you fairly and be honest. By keeping receipts until the charges post, on the other hand, you’ll have proof if someone tries to increase their tip or overcharge you in some other way.

Zero Fraud Liability to the Rescue

One of the main reasons I love using credit so much is the fact I get so many consumer protections, including zero fraud liability and the ability to dispute charges. This is actually the second time I’ve had to dispute a charge on my credit card — the first time was with a moving company that overcharged my credit card by $100 and wouldn’t refund it. When that happened several years ago, Chase immediately refunded the overcharge until the moving company could prove the charge was valid. They obviously couldn’t, so I rightfully kept the disputed amount.

A lot of people don’t know this, but you can dispute charges for several different reasons, including an overcharge or dissatisfaction with the product or service. The Fair Credit Billing Act not only protects you against unauthorized charges if you report them within 60 days, but also math errors, charges for services that weren’t delivered as agreed, and plenty of other scenarios that are actually rather commonplace.

Imagine if I had been similarly overcharged, but I had paid in cash instead before realizing the mistake. I would have had to get them to physically refund me the money somehow — unlikely, considering they refused to refund the $100 overcharge in the first place!

Related: Is It Smarter to Use a Debit Card or Credit Card?

I would have faced similar hassle if I had paid with a debit card. Credit expert John Ulzheimer notes that the Electronic Funds Transfer Act (EFTA) applies to debit card transactions, but with less robust protections overall. Where your liability for fraudulent credit card transactions is limited to just $50, you can be held accountable for up to $500 in unauthorized debit transactions if you wait more than two business days to report the fraud.

“Also, unlike credit card fraud, when unauthorized debit transactions occur, it is your money that’s been stolen. This could lead to a host of other problems if, for example, you don’t have access to the funds that should be in your bank account when rent, bills, or other financial obligations become due,” Ulzheimer says.

The Bottom Line

I always keep the credit card receipt for a purchase until the charge actually hits my account, and this scenario proves why it’s so important. If I hadn’t kept my receipt, I would have no proof to share with Chase if the restaurant decides to argue with the assertion that they changed the tip amount on my bill.

While most retailers, restaurants, and businesses are honest, there are always a few bad apples willing to commit fraud to keep more money for themselves, not to mention accidental overcharges or mistakes. By using a credit card — and keeping your receipt until your sure the charge went through correctly — you can protect yourself and the money you’ve worked so hard to earn.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.