August 16, 2011

A Couple of Things You Should Know About Authorizations

First, we’ll talk about the “A” you see occasionally in your transactions view when using DOLLARS ON THE NET®. We’ll explain what it means and why it’s there in the first place. Then, we will address a question Shift4 receives almost every day, “Can Shift4 help me release an authorization from a customer’s card?”
What’s that “A” mean?
Have you ever noticed a transaction marked with an “A” on your “view transactions” screen? Many of our customers audit their batches and submit daily, but there are still these pesky transactions sitting in the view transactions screen that remain unsettled. What are they? What should you do with them? Why are they there?

Well, simply put, that “A” marks a transaction as authorized – authorized but not yet sold (and therefore not yet settled). Typically, only hospitality and sit-down food and beverage clients will see this message, as they are the major merchant types that authorize a transaction before completing it. (F&B does this to allow for added tip, while Hospitality will use these authorizations to validate reservations or check-ins – waiting for final checkout to complete the transaction.)

It’s helpful to occasionally review these “A” transactions, as sometimes computer and/or network issues can cause final authorization signals to not come through. This means even though the transaction may have gone through, you have not closed it out in a batch and therefore will not have received funding for the transaction. Blindly closing without looking for these transactions that could be in limbo can cost you revenue!

The “A” is turned off by default for most users (since many of our clients don’t ever need it), but if you would like to turn it on, you may do so by selecting Tools>View Options>General Filters, then check “Auth Only” and click apply.

If you find that there are transactions that should have processed to “sold” but haven’t, you can convert these to “sold” in DOLLARS ON THE NET, allowing you to process and get paid for the transaction. Be careful not to wildly select all of these transactions and try to process them. Some of these could have been errant and/or duplicate transactions that should be voided, not processed.

You will need the reports from your POS/PMS to audit and verify which (if any) transactions should have funded but didn’t. Once you identify them, the process is quick and easy. Enter the transaction, click “Online Edit,” validate the amounts, uncheck “Auth Only,” and finally, click “Submit.” Done. Now all you have to do is close the batch. The transaction will then be settled, the “A” will go away, and you will be paid!

Releasing Authorizations
Sometimes we need to get rid of these “A” transactions in another way. When a customer cancels their stay, decides to pay with a card other than the one initially presented, or for a myriad of other reasons, it is sometimes necessary for a business to release an authorization they have previously placed on a credit card.

We are regularly asked if we can assist with this and the short answer is, no; unfortunately, we are unable to release authorizations that have been processed.

Shift4, as a payment gateway, does not request (initiate), authorize, or process transactions. Our responsibility is to act as a go-between and ensure that the data is securely and reliable transmitted from the merchant to the processor and back (and to secure it with tokenization before returning it to the merchant).

The authorization comes to Shift4 from the processor after the processor has verified with the consumer’s bank that they have enough credit available to cover the charge. So it is the consumer’s bank (the issuing bank, as we say in the industry) that is uniquely able to remove any authorizations from the card.

So, as much as we’d love to help you remove authorizations, we can’t. It’s beyond our control. Your best bet is to call the 800-number listed on the back of your client’s card and ask them for assistance.

If they are unwilling to help you, you have one more option, which is to process the transaction for one dollar, and then immediately issue a one dollar credit. As soon as the purchase processes, the authorization hold will be cleared from your customer’s account. However, customers should be warned that the one dollar credit may take a week or more to appear. (Banks like taking money much more than giving it back.)

Now you know a little more about authorizations. We hope this helps you be more effective and more productive in your business. If you have any questions, or would like further clarification, you are welcome to contact Shift4 Support.