When the merchant submits the transaction to their credit card processor, depending on the processor, they can have the option of sending a list of items. I'm not sure why anyone does (maybe it'd be required for sales tax purposes, or for more complicated rate calculations), but for example PayPal Pro [1] offers the ability to send a list of items.

[1]: https://developer.paypal.com/webapps/developer/docs/api/#ite...