A referral is a response received on a credit card terminal after a credit card is swiped for authorization. The response does not mean the credit card has been declined, although the merchant may choose to decline it.
When a credit card is swiped, the response on the terminal can be: approved, declined, referral, pick up or no match. A referral indicates that the merchant should call the authorization center because more information is needed regarding the cardholder.
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The response on the merchant terminal may also say "Call" or "Call Center," also indicating that the merchant should call the authorization center.
The authorization center representative may ask the merchant to check the cardholder's identification. She may ask to speak to the cardholder directly. In most cases, the authorization will be approved.
If a Referral is Disregarded
A merchant may choose not to call the authorization center and process the transaction. This may subject the merchant to chargeback liability. When a transaction is improperly authorized, and the cardholder fails to pay the credit card, the transaction will be charged back to the merchant.
A merchant may choose to decline the transaction. In this case, the cardholder may present an alternative form of payment.