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Authorize.net-Authorize, Capture later


Guest Mark Weigl

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Guest Mark Weigl

We are planning to use Authorize.net as our payment system and have looked at simply charging cards as soon as an item is ordered.

Since some items may be pre-orders or not shipped for a couple days we figured it was fair to authorize the card and then capture the number at shipping time, just before we ship. We also hope since often there is at least some minimal time frame before we ship it may even cut out a few fraudulent cards. I know how if a card is stolen and sold sometimes people act fast on charges and it has been cancelled within hours. We have a couple questions about this first though:

1. Are there additional fees for this transaction from the merchant? I know approximately what rates are but if it involves an authorization, then capture at a later date is there any additional fees or is it even charged twice? I hope not but want to check on this.

2. How is this set up? Can we set up to somehow charge when we ship or do we simply have to go into the order at order time, select to capture, then go to the screen to ship?

Thank you for your help with these questions.

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I'll leave the responses to your questions to those who have more knowledge than I have. But there is an issue that needs attention.

You have not said where you are located. If you are in the USA there are Federal laws that limit how long you may hold the funds covering a back-order and what notice you must give a customer. Since I've never dealt in back orders, I've not been interested in the rules.

I suspect you might Google up something on that or perhaps find advice on the FTC web site.

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You can set your Authorize.net account to simply authorize a transaction without actually capturing it for payment. Then, you can go in later to complete the payment. I've not done this, so I'm not sure of the specific details. You can get those details directly from the Authorize.net site.

Regarding the pre-payment of orders -- Generally, as long as you ship within 30 days of charging the card, you're okay. If it's going to be a while (more than a couple of days), it's always a good idea to inform your customer, and if it's going to be longer than 30 days, you are required by law to notify them and give them the option to back out at any point prior to shipment.

The card companies generally have rules that say you have to wait until you actually ship before charging a customer's card, yet for most of us online, this isn't practical.

As a recent example, I held a Pre-Publication Special for my new book which was being printed in April. On March 31st, I started taking pre-orders, informing my customers that the books would probably ship out before the end of April. Orders and payments were handled normally (cards were charged at the time of order, not the time of shipment), and the whole financial end of things went very smoothly. Books were shipped out the last few days of April, and everyone was happy.

A couple of days is not a problem for anyone as long as you let your customers know about it.

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Guest Mark Weigl

I appreciate the above responses and it seems what is likely important is communication.

We don't do a lot of pre-orders. I am in the US and have heard about the 30 day law. Our current policy is we do our best to ship all items within 2 business days. Often this works well and 95% of the time it's within 2 business days and if it goes over often only one additional day.

We currently use Paypal though as a payment system and have had issues of an item being ordered Saturday and by Sunday a dispute being filed because the person has not received a tracking number yet even though our website lists our business hours. I'm sure some people can be exceptions but the part about communication sounds great.

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