Do you preauthorize self serve credit cards? If so BEWARE

[ScottV]

I have a Mercury Payment System with my Carolina Pride Self Service equipment in two of my wash locations. We accept credit cards in the SS bays, and have always preauthorized credit cards, before turning on the equipment. When we first setup our wash sites, we decided on $12 as the preauthorized amount, thinking that it would what the average customer would spend.

We were always flooded with phone calls from people who didn't understand how banks put "holds" on preauthorized amounts. They would use the bay and log onto their bank account and think the $12 was going to be the amount charged. I have called hundreds of customers to explain that it's only a "hold" amount and the actual charge would come through in a day or so.

Well, today I received a chargeback notice from my credit card clearing company in the amount of $8.25. After looking into the details of this charge, I found that the customer used the bay for the maximum amount of time (30mins) and was charged $18.75 + $1.50 sales tax for a total of $20.25. The charge was batched and processed on 10/21/14 and a month later I get a notice from the credit card company saying the charge was in excess of the preauthorized amount. So they credited me with the $8.25.

I've never had this happen in 6 years of taking credit cards in SS bays. I'm wondering if any of you have? I guess I have a couple of options. 1.) I can increase my preauthorization amount to the maximum amount we would charge ($21.00) but that will cause even more people to call and ask why they were charged so much when they see the "hold" amount. 2.) I could lower our maximum time allowed from 30mins to the amount that our preauthorization would cover.

I'm surprised that this has never come up before, and I'm wondering if any of you have experienced anything like this with credit card clearing house chargebacks??

ScottV

 

[chaz]

My pre-auth is $15.00 same as max per swipe. Rarely do I get folks spending 15$, usually c/c sales are about 11$

 

[BBE]

We've done a pre auth in the self serves for a little over 3 years now. Just like chaz, we set the pre auth amount to be the same as the max per swipe amount. This way there is no chance of us getting shorted, or the customer getting hit with an overdraft fee. And yes, we got multiple calls a week about it. We finally put a little message about it on our machine, and that seemed to mostly take care of the problem.

By having it set lower than your max charge, you run the risk of having someone have enough money in their account to pass the pre auth, but end up spending more than they have. Conversely, the higher you set the pre auth amount to be, the more chance you have of a persons card getting declined. For instance, let's say your pre auth is set at 15 dollars. Customer has 14 dollars in her account, but was only planning on spending 4 or 5 anyways. Her card will get declined, and you will lose the 4 or 5 dollars she was going to spend.

Following a time per coin decrease in our bays a few months ago, I raised our pre auth amount from 15 dollars to 20 dollars. I had left it alone at first, and noticed that quite a few people were hitting the max amount limit on their cards because they were now getting less time for their 15 dollars. So I raised it up to 20.

 

[chaz]

Hi BBE,

What are your cash and credit problems pricing on s/s?

I am at $3 for first 4 minutes cash or credit. Credit is count up with $15 max per swipe

 

[BBE]

We are still at $1.00 to start. Each dollar gives you 1 minute 32 seconds. CC is count up with a minimum of $3.00 per swipe, and a max limit of $20.00.

 

[Jeff_L]

From your description it sounds as if the chargeback was a one off incident. However, like the others who replied, my max per swipe is the same as my pre-Auth amount. I didn't know you could change the pre-auth amount. However, I use Washgear and not MPS with Carolina Pride and perhaps I don't have that option.

I don't see how your processor could reverse the pre-Auth overage. How do gas stations get away with a pre-auth of $1? I think there's more to the story that hasn't been told to you. Perhaps the customer saw the hold of $12, then when it changed to a higher amount (the real charge) they complained to their bank who reversed the presumed overage? I usually get a notice from my processor that a charge has been asked to be reversed, and they ask for my side of the story. I've fought these successfully every time by providing the processor a receipt.

 

[Earl Weiss]

A while back got some but most who have used their cards for "Pay At The Pump" are familiar with how the system works.

Chargebacks are BS by the CC companies. They just stick it to the merchant whenever they can. Absent outright merchant frausd the CC companies should eat it. there ought to be a law.....

 

[KleanKars]

Had Mercury Payment System years ago, only one offered when I bought from Unitec. They were horrible with all their fees, increased monthly. Would call to see why I had so many fees and they had to find out why as the rep had no idea. After complaining to Unitec for years, they finally offered another device to change CC processors. Think it was around $1500 to change. Best move I ever did. Now use my bank's cc processor. Anyone using Mercury, look at the fees and be aware it's $350 cancellation fee, and before I changed think it was over $200 PCI fee!