Thread: Authorize vs. Authorize and Capture

Hello,

Just wanted to find out if there's a way to configure ML to do "authorize" CC requests first before doing "authorize and capture".

Payment gateway - Authorize.NET

Main reason - once in a while we have customers who enter wrong address or other information several times. Transactions will be declined by Authorize.NET, yet customer's bank will put a hold on the amount as many times as there are declines.

We've had customers lock themselves out of thousands of dollars for several days - not great for our reputation.

What other solutions would you suggest, if not the one above?

[edit]we are on ML 6.0 platform[/edit]

Look at app config : TransactionMode

Shawn, thank you I've seen these, but we don't want to manually process transactions either. I want an "Authorize" request, then if it went ok, an immediate "Authorize and Capture".

or some other method of validating the card prior to actual transaction

We had a customer who wanted to buy a $500 widget get an AVS mistmatch denial 6 times. Typically person recognizes it and calls after 2nd or 3rd try, but this lady just locked herself our of $3000 for a holiday weekend.

I'm not following this at all. What does an AVS decline have to do with auth vs auth+capture

That sounds like something to speak with your gateway about, all of that is done on their end. AUTH and AUTH CAPTURE are the only 2 options available out of the box.

I suspect your customer was using a debit card instead of a credit card. In that case, your proposed solution will not help. Authorize puts the hold on the funds. If you did an Authorize and then an Authorize+Capture, you would end up holding twice the required funds every time.

One option is to accept the order with the AVS error, but flag it for special processing. Then contact the customer and find out the correct address.

I still don't quite understand the fundamental question being posed here...

I think the fundamental question is, "how can I avoid putting a hold on funds in my customers account when they use the wrong address?"

The OP has turned on address verification in Authorize.Net. What's happening is that some of the OP's customers are entering an invalid billing address. Each time an invalid address is submitted to Authorize.Net, the customers bank is placing a hold on funds equal to the amount of the order. For example, if the customer tries 3 times, then the bank ends up placing a hold on 3 x the order total.

My experience is that only debit cards act this way. I believe if the customer used a credit card, no hold would be placed on the funds.

One way to avoid the problem with debit cards is to always accept the first checkout attempt, and record the results of the address verification. If the verification fails, then contact the customer and ask for the correct address.

no, it puts a hold even when using cc's. The gateways/banks do this, it's completely out of our control. we've asked many times how to avoid this, and it's not possible.

afm, correct, that was the original question. Every time a customer enters invalid address, bank puts a hold on her funds for the amount of purchase ($500 in our case). So when she tried 6 times, she's got 6x$500=$3000 locked. This was a CC issued by her local bank.

This happens on debit and on CCs as well. Usually, CCs are much quicker with releasing funds. Some banks however may lock funds for days.

My original thought was that AUTHORIZE will not lock funds. I know for sure that Verisign has a transaction to just validate card and not lock funds. I'd assumed that for Authorize.NET "AUTHORIZE" is doing the same, otherwise I see no difference between AUTH and AUTH+CAPTURE. Hence my original question, whether it is possible to issue an AUTH (not to lock funds, but just validate card), and if it is good then immediately issue AUTH+CAPTURE.

Hope this is more clear

You should call/chat with Authorize.Net. My understanding is that AUTHORIZE will verify that the funds are available and place a hold on the funds. You can later submit a CAPTURE using the AUTHORIZE transaction ID to transfer the funds. AUTHORIZE+CAPTURE combines the 2 transactions.

Some merchants will only AUTHORIZE when the order is placed, and then CAPTURE when the order is shipped. Some merchants do both at the same time.

As far as I know, Authorize.Net does not have a transaction that only verifies the address...but I don't know much.

We've had the same problem for years. It's gotten so bad that we actually have turned AVS off and take the fraud liability on ourselves. Our product is a high end piece of electronics and our typical customer is very well off with several homes. Trying to figure out which home they listed as the billing address is apparently hard because we had a 70% failure rate on AVS with both our previous custom cart and ADNSF. We run about a 1% failure rate with just CC# and CVV. Everyone in the industry we've talked to say it's part of doing business in the CC field.

It's a real problem but it's cheaper for use to eat thousands of dollars in fraud than to spend even more thousands in support calls wanting to know why we've "taken" $7K of their money. It's hard to convince them that we don't have their money but that neither do they for the next 14 days.

Maybe we shouldn't disclose this, but here it is:

We have also had AVS turned off for 9+ months. It's almost useless IMHO.

We rely on MaxMind almost exclusively to detect fraud, and yese, it has cut fraud by 99.9%. We have not had a chargeback now in 6 months....and we are in the most risky of businesses (software downloads). no physical shipping address required.

I just cannot stress more that you have to all use MaxMind. I've made this point a dozen times now.

Why the gateways themselves do not incorporate MaxMind type of screening I have no clue...

Did we get closure on this - we're in the same boat - wondering if using AUTH only will just do a CC validation - not a funds hold.