If you’re a small business considering issuing electronic-only receipts, start by checking what local and state laws dictate. But you should also consider any possible privacy and liability concerns.
Dear Your Business Credit,
As a retail store, do I have to offer a printed receipt or can I offer only digital?
We are located in New York City. – Jon
Dear Jon,Great question. The short answer is that New York City law does not address digital receipts. That may be why you are having trouble finding an answer to your questions.
Christine Gianakis, press secretary at the New York City Department of Consumer Affairs, researched the issue for me.
“In New York City, a business must give you a receipt for purchases over $20 automatically, and upon request for purchases between $5 and $20,” Gianakis wrote in an email response to questions. “A receipt may not show a credit card’s expiration date or more than its last five digits,”
However, Gianakis added, the receipt must show:
- Business name and address and, if licensed by the Department of Consumer Affairs (DCA), license number.
- Amount of money paid for each item.
- Total amount paid, including a separate line for any tax.
- Date of the purchase.
- Make and model of any electronic purchase that costs more than $100.
In answer to your specific question, she wrote, “There is no NYC law that expressly mandates the receipt must be paper.” If you want to learn more, you can read this document issued by the DCA in New York.
Given that you are in New York state, I looked up the state laws as well.
On the New York State Attorney General’s site, Section 520-A of the General Business Laws of New York offers a set of guidelines as to what information may be included on credit card and debit card receipts, but does not specifically address e-receipts.
What to consider when issuing electronic receipts
There are other considerations if you are thinking about issuing e-receipts.
- They are convenient and greener than paper receipts.
- However, they can be used in return fraud. Among retailers, 19 percent reported return fraud associated with the use of e-receipts in 2017, according to the National Retail Federation.
- The receipts can be printed out from someone’s email and altered, facilitating the return of stolen merchandise.
Privacy, liability concerns around e-receipts
There are also privacy concerns with e-receipts, given that many retailers view e-receipts as a way to get access to consumers’ email addresses and market to them.
Privacy advocates have cautioned consumers not to give away personal information too freely.
That begs a lot of questions in the minds of consumers that could potentially lead to class-action lawsuits in the future.
“How is the merchant holding your information?” asks Jeffrey Steiner, counsel at Gibson Dunn in Washington, D.C., who has expertise in the financial technology space. “Are they giving it to a third party? There is obviously a lot of value in your purchase history to a number of third parties. Are they selling it or asking your permission before they sell it?”
There are also potential issues if the merchant accidentally sends the customer’s transaction information to another person.
“I have an email from another Jeff Steiner,” Steiner notes. “It was the receipt from a guy who purchased a new grill. I got the receipt at my email address. Now I’m getting information about someone else. It has the guy’s home address.”
“Unless you have really good controls around it,” Steinter asks, “do you really want to take on that risk and what that liability is?”
- Because of the potential for situations like this, all merchants who use e-receipts should get good legal help to put the right disclosures in place when customers sign up for them.
- The site Marketing Land has put together a helpful guide on electronic receipts that covers disclosures.
If you don’t have the budget for it, I’d hold off issuing e-receipts until there’s more clarity in the law about what is and isn’t allowed. Good luck!