Payment Preauthorizations and Failed Transactions

[Pigeon]

Hi,

I'm using Website Payments Pro from Paypal. I have customers who enter an invalid CVV number (Error Code 15004) and a pre-authorization (payment pending amount) gets posted on their credit/debit card. The customer right away assumes that this some kind of credit card fraud on my part. And all the while I'm wondering why does the pre-auth go through at all? Doesn't make sense. Second, I'm powerless to take the pre-auth off from the card, because usually the customer service dept of the bank won't allow the Merchant to make this kind of cancellation request. It has to be from the cardholder him/herself.

Is this an industry norm or it really depends on which merchant account and payment gateway you use? Anyone encounter the same issues? And it doesn't just occur just with bad CVV verification. Any type of transaction failure causes the payment pre-authorization to be generated. Each failure draws down the balance of the customer's card. They get piping mad about it.

-KC

[sanitystyle]

This has happened to me with my merchant account also. I believe this is normal. I just assure the customer that its standard and its not an actual charge just a hold and it will be released within a few days.

[Brtp4]

It is a good question, here is what I have done:

- I explain to the customer that there are three entities involved, you bank, their bank, and the processor (in my case autho.net). I explain to them clearly that the hold occurs in their bank, but does not cross thru autho.net or on to my bank. I do not "blame" their bank, just merely explain that the payment does not actually arrive you you. This makes them understand the process, which prevents them from thinking you are doing something improper.

- I explain that it is a hold, but not actually a payment, and will usually drop off in 3 business days. This eliminates the feeling that you have took their money - the key issue.

- I explain that I can help remove it (you can) but that it is not easy and often does not save any time. It involves calling their bank, and their bank prefers to deal only with the account holder. This shows that I am willing to assist them, but also points out that it is mostly beyond my control and thus impractical.

- I let them know that it would **** me off too (it would). This makes them feel I have the same sense of right/wrong.

Usually by this time they no longer suspect anything improper, in fact feel a little more confident in our customer service.

Hope that helps.

BP

[Pigeon]

Thanks for the advice! Brtp4, how do you like Authorize.net? From some research, it looks like the error codes used in failed transactions are much more easier to understand than the ones used by Paypal's WPP.

-KC

[Brtp4]

Hi, very sorry for not seeing this and replying earlier.

Autho.net is an excellent CC provider. They have good support, reliable notification, and are easy to use. I am not real hip on the EBay philosophy of making you use their stuff for everything, so I did not want to use WPP, but perhaps it is good.

One thing to consider is that - I think - WPP allows better integration with Paypal payments. The info on here is not very precise but it is worth looking into.

BP

[disco101]

"Pigeon"

I know this Thread is a Month old, but I just wanted to weigh-in with my views...in case someone else stumbles upon this Thread.

"Brtp4" has some great ideas of what to say to people when this happens. I myself get this all the time and tell people that it is just a "hold" on their card. And if they are not sure, they can call the Credit Card company with the number on the back of their card. OR, they can look at their online statement. Seems like every time I tell the customer this, they are pretty happy with that, and do their "due diligence".

OTHER INFO:

I too use Authorize.net (just started last month) and before that I used Paypal Standard payments.

I do like Authorize.net but I don't like the fact that it doesn't tell me what the customer actually purchased. I have to run a report in ProStores and it will give me the SKU that they purchased. I redid all my SKU's to make sure I knew exactly what they bought (because I have different sizes for costumes). That was kind of a pain.

With Paypal, I know that the integration is better, because when I get an eMail that something sold, it tells me exactly what they bought. Although, Paypal Pro is 2 to 3 times as much as Authorize.net.

So, needless to say, I am going to stay with Authorize.net and suffer through the bad things. And find ways for it to work better for me.

[Pigeon]

Thanks for the feedback!