How to Select a Payment Processor
2. Stale authorizations. VISA’s authorizations expire after seven days; MasterCard’s after 30. If it takes you longer than that to ship an order or a back order, get a second authorization. Does your service or system do this automatically?
By the way, back-order processing assumes that you charge or deposit the customer’s funds upon shipment. While this is the safest method (and the one used by most direct-commerce merchants for safety’s sake), it’s not technically required, so long as you process and ship orders in a timely fashion (i.e., within 24, 36 or 72 hours).
Of course, if a back order occurs, the Federal Trade Commission requires that you inform the customer and issue prompt refunds when necessary. Companies selling crops (fruit, vegetables) or anything that’s personalized can charge when the order is entered, just like theaters do when selling seats for a future performance.
3. Soft declines. If the Interchange can’t stand in for a charge, and the issuing bank’s system is unavailable, the Interchange will respond to an authorization attempt with a soft decline, which means the transaction is probably good but can’t be accepted right now. A robust solution or service automatically will recycle these authorization requests at reasonable intervals to seek the authorization. Others will pass them back to you as unauthorized.
Ernie Schell is president of Marketing Systems Analysis and author of the “Guide to Catalog Management Software.” He can be reached at (215) 396-0660 or firstname.lastname@example.org.