March 30, 2025

 

 

The word "transaction" has several usages, but confusion can happen in instances when a transaction involves a purchase. In those cases, is "transaction" synonymous with "purchase"? No.

 

In this context, a transaction refers to the entire exchange between a seller and buyer: in a single setting, the seller selling one or more things and the buyer making the purchase.

 

But "purchase" has a narrower definition, referring only to the the part of the exchange involving the buyer.

 

"Purchase" can also refer to each item bought; each item bought is itself a purchase. Thus one transaction can contain several purchases if the buyer buys more than one thing.

 

So, of the same transaction, we can speak of one's [entire] purchase or [a] purchase that they made.

 

What is an "item"? An item is a unit for sale as defined by the seller. For example, if the seller is selling 6 packs of soda and you buy one, that is a single item purchased even though you're getting 6 cans or bottles of soda.

 

One of the main sources of the confusion involves credit cards. When we get a credit card statement, for most of us the "transactions" are for purchases made on the credit card. In these cases, the statement provided by the credit card company is for the buyer and therefore each transaction is from the buyer's vantage point. But in reality, each transaction contains both a buyer and seller. In turn, any fees the buyer or seller must pay to companies processing the transaction involve separate transactions.