 Posted - 03/11/2021 : 15:05:46
18 months ago we changed the Transaction Type in our payment provider screens from "Sale" to "Authorization". As a result we must capture, edit, or void each new order before the customer's payment method is charged.
We made this change because we often get orders that need to be edited or cancelled before shipping, and PayPal stopped refunding the transaction fees for reduced and refunded payments.
We really like the change to "Authorization".
- When we receive an order that needs to be cancelled, we void the transaction on the Cart page and the customer never sees any charge or refund on his statement. This eliminates the service calls we'd get when a customer sees a charge on their statement but not the refund that appears later on.
- When we get an order that's missing an essential item, or there's an item that's not needed, we call the customer, confirm the change, edit the order, and recalculate the shipping fee using the Calculate button that appears when you edit the order. PayPal imposes a limit on any increase of up to a 115% or $75, whichever is less.
- We've had challenging customers who attempt to initiate chargebacks with costly penalties after changing their minds immediately after an order. We can spot most problem orders before capturing funds, and contact the customer before there's an opportunity for a chargeback. We can also usually spot return fraudsters who attempt to buy unusual quantities, and void those authorizations so there's never a charge to dispute.
- We capture the funds only when the item is ready to ship, so our PayPal balance shows the true revenue received.
If your store frequently needs to edit or refund orders, consider changing your Transaction Type from "Sale" to "Authorization".
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Advantages to "Authorization" Instead of "Sale"