e-Receipts: What they are and why should you use them?

When was the last time you used a physical receipt to return something you bought from a store?

Chances are, the last time you wanted to, you either couldn’t find it or relied on the copy they emailed you.

That is, you used an e-Receipt.

e-Receipts are a much more efficient, safer, and more cost-effective alternative to the traditional physical receipt.

In this article we’ll explore what e-Receipts are, how they work, and why they’re better than paper receipts in almost all cases.

What is an e-receipt? 

e-Receipt stands for electronic receipt. It’s a digital version of a receipt, which is issued to acknowledge your purchase of goods or services.

They are most commonly sent via email, though any other digital medium — such as SMS, a smartphone app, or even social media messaging — is a valid way to send an e-receipt.

The details that are found on an e-receipt, what they are used for, and when they are issued are all the same as for physical receipts.

The only difference is that an e-receipt is digital.

How do e-receipts work? 

Just like a traditional receipt, e-receipts are sent as soon as a purchase is made.

In the case of online purchases, they are sent automatically, usually via email. 

For in-person purchases, customers are typically given the choice to receive a paper or electronic receipt. In this case, the seller takes the customer's email address or phone number to send the e-receipt.

The customer can then use that electronic receipt for refunds or exchanges at a later point, just like a paper receipt.

Why are e-receipts better for business? 

In almost all cases, e-receipts are a better option for businesses than traditional paper receipts. Here’s why.

They save time 

e-Receipts arrive in the customer’s inbox immediately. While this is only marginally faster than printing a physical receipt, the real time savings comes when customers have a return, and are able to quickly access an e-receipt on their phone.

They have a smaller environmental impact

e-Receipts don’t use paper or ink. Since most receipts just end up in the trash anyway, using electronic receipts reduces your company’s overall impact on the environment.

They save money 

Using e-receipts means you don’t have to shell out for paper and ink or receipt-specific printers.

They’re easier to find

Let’s face it. Traditional receipts always get lost. And when they don’t, by the time we need them again, they’re faded and hard to read.

An e-receipt is easier for a customer to find when they need it. It’s also easier for a customer service rep to locate if required, as there is a digital “paper” trail.

They help you capture email addresses 

Asking in-store customers whether they’d like to receive their receipts electronically also provides an opportunity to collect an email address, which can be used for later marketing efforts.

Of course, you’ll need to also capture consent to receive those emails via an opt-in box, but just offering the option will attract at least some new email addresses.

What is the difference between e-receipt and invoice? 

e-Receipts and invoices are two related but very different documents.

An e-receipt, primarily used by consumers, verifies an existing purchase and acts as proof of purchase when facilitating refunds or exchanges.

Invoices, more commonly used in business-to-business circles, though sometimes issued by businesses to consumers, are used to request payment for goods or services that have just been or are about to be delivered.

Some critical differences between e-receipts and invoices include:

• Purpose: An e-receipt serves as proof of purchase for a completed transaction. An invoice is used to request payment.
• Timing. e-Receipts are issued right after payments are made. Invoices are issued before or after the goods or services are delivered, depending on the agreement between the buyer and the seller.
• Details. An e-receipt typically only includes completed transaction details. Invoices are more detailed and also include payment terms, due dates, and billing information.
• Use. e-Receipts are primarily for customers to confirm a purchase they’ve made. Invoices are used by both buyers and sellers to manage payments and financial records.

Are e-receipts safe? 

Yes, e-receipts are safe.

They are more safe than physical receipts in that they can’t be lost or damaged. While there is the consideration of the security of the customer’s email inbox and physical device, it’s important to note that e-receipts can also be encrypted and protected using passwords.

This makes them even more secure and helps reduce unauthorized access.

How to create an electronic receipt? 

Thinking about replacing paper receipts with electronic ones?
Here’s a quick guide on how to go about it:

1. Choose a format. Decide whether to send a PDF or HTML receipt or whether to just send the details in an email. PDF is the most common and professional option.
2. Gather the necessary information. You’ll need to add your own business details, the customer information such as their name, and transaction data such as the date and time of the purchase, the payment method use, and what items were purchased along with pricing details.
3. Choose an e-Receipt template or software tool. You can use a pre-made template in a word processor like Google Docs, an online service like Wave or PayPal, or a dedicated point-of-sale software tool like Square or Stripe to send e-receipts. The latter is usually the best move, as it is automatic and integrated with your accounting and other financial management software platforms.
4. Generate and send the receipt. Input all of the necessary data, along with any personalized messages (like a thank you note), and send the receipt off to the customer.
5. Save and store it. Make sure you’ve got a system on your end for storing e-receipts, such as a Google Drive folder. If you’re using a dedicated software tool for e-receipt generation, it likely already has a built-in storage solution.

How long does an e-receipt take? 

The length of time it takes for an e-receipt to reach the customer depends a little on the setting and industry.

In the case of most online purchases and retail transactions, e-receipts are delivered instantly, subject, of course, to an email server processing times.

Subscription services, as well as restaurants and hospitality settings (like hotels and event venues), often have additional steps that take place after the purchase, such as the application of loyalty points, which means their e-receipts generally take a few minutes to arrive.

In some cases, it can take a few hours for an e-receipt to arrive. This is more common when dealing with financial institutions and certain business-to-business transactions, which sometimes require approvals, verifications, and additional processing before the e-receipt can be issued.

In rare situations where the transaction is large and/or complex, such as large business transactions or the purchase of real estate, it can take as long as 24 hours for an electronic receipt to be received.

How to store e-receipts 

You’ve basically got two options for storing e-receipts.

You can take the DIY approach, storing them on your desktop or in a Google Drive folder. Most consumers will just keep them in their email inbox. This is not advisable for business purposes, however, as your financial record-keeping will require easy access to business receipts.

The second option is to integrate your e-receipts with your expense management software.

Integrate e-receipts with your expense management solution 

Moving from traditional paper receipts to their electronic counterparts is an important step in modernizing and streamlining your business.

When implementing e-receipts, though, it’s important that you also find a suitable way to integrate these receipts with existing business systems.

For starters, you’ll want to be able to find the receipt if the customer wants to initiate a return and can’t find it in their messy inbox.

More importantly, integrating e-receipts — both those that you generate as well as those you receive from your own suppliers — with your existing software stack helps improve visibility over company financials.

For example, by importing the e-receipts you receive from vendors directly into your expense management system, you’ll obtain real-time visibility into spending behaviors and be able to create more accurate financial forecasts.

BILL Spend & Expense, part of our financial operations platform, offers a variety of integrations with popular finance tools and a dedicated API for setting up your own connections where required.

Improve spend visibility and create more accurate forecasts today. Try BILL for free.