Currently, when you have a credit card customer with multiple ship-to addresses, the order will preauth at the time of order entry. Then, when the first shipment is committed, it will capture the card, and preauth again for the remaining balance. Repeat per ship-to address. So, when you have an order with 20 items at $10/each, it will preauth for the full order of $200. Then, one item will ship and capture. It will then preauth the balance of $190. Next item captures, and the order will preauth for the balance of $180. The preauths add up against the customer's available credit on the card, and if their credit limit can't support the barrage of preauths, the card will start to decline. Not only for future ships on this order, but the customer's credit is locked up for ANY purchase. This does not make for very happy customers.
by: Holly S. | over a year ago | 1 - Financial Management
Comments
This is a major deficiency in payment management. Not only is the customer unhappy but the rapid, multiple auths trigger anit-fraud alarms with the customer's issuing bank. The potential fraud alarm causes the card to decline and you begin to receive calls from the fraud division of the customer's issuing bank. The only workaround is to force a prepayment for the full amount at the time of order. If the scheduled shipment date is weeks or months in advance of the ship date, the customer is charged long before the product is shipped. This approach presents customer service issues as well and may violate some merchant agreements with credit card processors and the Fair Trade Act. This is a serious flaw that produces significant business consequences.