CREDIT CARD 101

Do you report more authorizations than settlements on your monthly invoice? You are not alone. In fact, almost every single business shows the exact same thing. Some of the reasons include:

Declined Cards – A card that is declined will never be settled, of course.

Dual Cards – Occasions where the customer changes cards in mid-purchase (perhaps a different person wanted to pay). While fairly rare, this would cause two authorizations and only one settle.

Incorrect Business Practices – Swiping the card more than once (this can happen frequently when a processor "slows down" and the authorization isn't sent back quickly). This will add an authorization every time the card is swiped. Some clerks will do this when the card comes back as "declined" or "referral". Those cards should never be swiped more than once.

Address Verification – Shift4 uses a "two pass" system to do Address Verification - the first pass is the address check, if that succeeds the second pass is the authorization for the entire amount. Utilizing "two pass" Address Verification will automatically make the authorization total double.

Incremental Authorizations – Any time a customer adds something to their total after the initial authorization you run the chance of requiring an incremental authorization. A few examples of this would include adding on dessert, additional drinks, a large tip, etc. Furthermore, in a hotel environment, incremental authorizations are caused by things like room service, additional nights stay, etc.

While you will probably never see a bill where your authorization count matches your settled count exactly, making sure that your staff is trained in best practices could lower the difference between the two. As a reminder, never swipe a card more than once, if possible. Also, make sure that your staff doesn't run the card until your customers are truly done ordering merchandise.

Overall, it is up to you and your staff to work together to understand the credit card process