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  1. #1

    * Innovative solution for Online Payments


    I'm searching for a creative solution to avoid refunds due to our business model.

    We will sell products prepared and distributed entirely by our affiliated companies. We don't have stock and sometimes our affiliated companies don't announce us effectively and at the right time when a product is out of stock.

    What if some costumer pay with his credit card for a product that is out of stock? We don't want to pay a chargeback every time this occurs, it's untenable.

    We cannot prevent 100% this and, due to our business model, It could happen everyday.

    We work with GPRS printers that uses SIM Card to transmit the orders, in real time, to our affiliated companies. The costumer can view in real time at the website when the company accepts or rejects the order.

    Here's the thing: With the normal business process of any E-commerce Website the costumer already paid with his credit card whether the product is in stock or not.

    Does anyone can help me to resolve this with a solution where my business avoid chargebacks and refunds everyday?

    3 ideas:

    1) The payment gateway will process the payment ONLY if the company accepts the order at the GPRS printer. Does anyone knows if any payment gateway can be configured to work just like that? In that case, a message from the GPRS printer will be sent to the webserver and this will process it as the OK to continue with the payment processing. I don't know if it makes sense at all.

    2) My website will not ask for the credit card details until the company accepts the order...when the order is accepted then the costumer enter the credit card details (this is not the nature of the business process for a E-commerce, but can help). A message through the GPRS printer will be sent when the payment is processed and the order can carry on for distribution.

    3) Did you know if any payment gateway allow a lot of refunds? My company will communicate with the costumer and will inform them that his money will be refunded to his credit card as soon as possible, but this is technically a chargeback.

    Thanks for your patience with my english and your help, dani1091

  2. #2
    Hello Dani,

    100%, the answer to your question is to run a pre-authorization. This is where you have billed the card, but not actually "sucked" the funds off of the customers account. You have a week in which to capture the funds, but the customer can't spend their money in the meantime.

    Yes, every credit card processor would have refund thresholds, and also - if you pre-auth you won't get his by the discount rate. Doing full authorizations and refunds would get expensive!

    How long do you need in order to determine inventory availability>
    David Goodale
    Canada's merchant account provider.
    Toll free: (888) 414-7111 ext. 5 | Direct: (905) 901-2254

  3. #3
    Hi dgoodale, thanks for your response. That is what I'm looking for!!.

    Did you know about payment gateways that allows Pre-Authorization method?

    I just need 2 minutes or less to determine inventory availability because they give a response on real time to the buyer to confirm if they have or not the product in stock. The Administration Panel will advise us about a rejected order and I'll contact both buyer and my affiliated company immediatly.

    We'll do our best to make sure that every product shown in our Website is available and in stock, but everything can Fail and We've to be ready for that special cases.

    Some Payment gateway sellers told me about Void trasaction type in which I can cancel an original transaction that is not yet settled and prevents it from being sent for settlement.

    PayU Latam told me that I can do it before 9pm within the same day of the transaction with no charges and If I want to void after this period of time, I've to pay $10.00.

    InstaBill: My company pays the transactional fee ($0.40)for every void transaction within the same day and If I want to void it later: $1.50 per void transaction.

    Thanks for further advice, Dani.
    Last edited by dani1091; 11-12-2013 at 01:16 AM.

  4. #4
    I think this can be done with 2checkout, you can refund a sale without any fees.
    NMSERVERS - managed hosting, administration, performance analysis and system security services

  5. #5
    Hi Dani,

    You are getting some bad advice here. A void will work, but what you are doing is fully authorizing the card and creating a race condition where you have to void it before the file gets settled to the card networks.

    Visa's recommended best practices for merchants specify that a merchant in your situation should be using pre-authorizations.

    To give you some confidence, just about *ANY* payment gateway can support pre-authorizations. It would be harder to find one that couldn't support it!

    If you want to call me and talk about the cart you are considering, how your integration works, etc, I can probably help you figure out a good gateway. Best of luck.

    P.S As an interesting side note, your question made me realize that many merchants are not aware of pre-authorizations or really how to use them effectively. They reduce costs, eliminate fraud, prevent chargebacks, improve customer satisfaction -- tons of benefits, but people just don't understand. Thanks for the question - I'm actually going to address this in a future article on our blog.
    David Goodale
    Canada's merchant account provider.
    Toll free: (888) 414-7111 ext. 5 | Direct: (905) 901-2254

  6. #6
    Go with Bitcoin, it doesn't have refund or chargeback
    Cheap Windows VPS | Linux VPS | Dedicated Servers Within Your budget
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  7. #7
    Hello everyone, thanks for your willing to help me.

    dgoodale: thanks for your comments. I'll be calling you to the numbers of your signature for further help if you don't mind. You are totally right, look I've talked with 3 representatives of 3 different payment gateways in the last 2 days and no one told me or at least suggest me about Pre-Authorization. Maybe they are just low payment gateways or bad sellers. If you want to, please add me to Skype: danielelias1091

    I will also look at 2checkout and bitcoin. Thanks for the recommendations guys.

  8. #8
    Hi Dani,

    I don't mind at all if you call me. Happy to help.

    I don't think the advice you've received from other processors was intentionally bad. It's just that many processors use a call center and you may have been unfortunate to get a junior salesperson that didn't explore your needs quite thoroughly enough. In any case, your current processor can probably support pre-auths already if you explicitly ask for it.

    I don't have Skype, but feel free to email or call any time. I'm in the Eastern time zone (Toronto area). Best of luck with it!
    David Goodale
    Canada's merchant account provider.
    Toll free: (888) 414-7111 ext. 5 | Direct: (905) 901-2254

  9. #9
    it won't work.

  10. #10
    Join Date
    Oct 2004
    dani1091, did you get the full answer you were looking for?

  11. #11
    Join Date
    Mar 2013
    Quote Originally Posted by buythiscomputer View Post
    it won't work.
    Care to explain what won't work?

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