I was told that they are going by an "honor policy" where a retake lower in credit can substitute an original course that was slightly higher, as long as the classes are similar in name/description.
Ex: Gen Chem 1 w Lab, 5 credits at school A
Retake Gen Chem 1 w Lab, 4 credits at school B.
Since the courses are the same, and only differ in a credit, the retake should count based on their policy. The key here is that the classes have to obviously be the same, as credit's for classes do vary between universities. General Chem/Bio, for example, are usually 4 credit courses a piece, but every now and then you run into schools that have them higher, such as 5 in the example case.
Also, for grade retakes at the SAME university, this does not apply. This applies only if your re-take is at a different university than the original one where the course was taken. If you are re-taking a course in the same university, I believe the course has to be EXACTLY the same. Same credits, same name, same description, even same Prefix.