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Credit Card Billing Process

Some of customers have contacted us as to why they have had their credit cards debited before our products have shipped. Here is a brief explanation of what is happening. There are 2 methods of handling automated credit card processing which merchants have. Method 1 is “authorize & capture”. Method 2 is “authorize”, “hold” for a maximum of 21 days, and then “release” to the merchant if the product ships within 21 days. If it doesn’t ship within 21 days, the” hold” is cancelled effectively cancelling the order.  Note that the “hold” is almost like a “debit” as the charge on “hold” is no longer available to the credit card holder for the 21 day period.

 We are subject to the rules and method our credit card processing providers impose on us. Our current implementation is using method 1. When you add an item to your cart, we pop up a message to give you the opportunity accept our delivery schedule and continue with your order or to cancel adding the selection to your cart.

Here is a definition of the terms for the methods:

Authorize – Validate the credit card and funds to cover the charge (method 1&2);

Capture – At checkout, debit the credit card with the purchase (method 1);

Hold – Freeze the credit card purchase amount on your credit card for a maximum of 21 days (method 2);

Release – Update the credit card “hold” and “debit” the credit card (method 2) crediting the merchant.

Later this year, when we reach the point where we ship from stock, we will be changing to method 2 since we will be shipping from stock well within the 21 day hold period. Currently, we are shipping from production runs, not stock, which must be shipped to our Louisville distribution facility before shipping to our customers. If we were to implement method 2 now, if the time between your placing an order and our being able to ship our product exceeded 21 days, your order would be automatically cancelled since the “hold” would have expired. You would be then notified your order was cancelled and then have to reorder.  We taken the time to give you this explanation to assure you that we’re conducting our business in good faith and explain the credit card processing company’s rules applied to us, the merchants. As an aside, our current credit card processing vendor’s solution only offers method #1 and does not release all of the captured funds to us for a long as 180 days whether or not our customers have received their order so we too are being disadvantaged. We are currently addressing this as well.

 

 

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