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What do you think? Charge customers' CC immediately for eCommerce orders? Or just before shipment?

by ShawnP
11 replies
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Hi fellow Warriors. I've been hired as a consultant for a company looking to boost their web sales for their bedding and bath products website. They have 12 retail stores and have neglected the web side of things, so they hired me.

What is extremely puzzling to me is that they do not do real time CC processing. They have a girl manually process each and every web order only AFTER she spends time and effort tracing down the items.

Huh?

As an IMer having always worked with digital products, this is new to me. This company is dead set on NOT charging the customers' CC until AFTER they find the stock, bring it in (if it's in another location) and prep it for delivery. THEN, and only then, do they charge the customer's card, which causes a whole slew of issues in the meantime...declines, cancellations, changes to the order.

It's a nightmare for the poor girl that fulfills these orders.

I asked why we don't charge the card right away when they order to nip a lot of these issues in the bud and she said they (the owners) don't think that is the right way to handle things. I then spoke with the owner and she could not conceive of charging them immediately via the web. She even asked me if it was legal!

So, my question to you all is...have you purchased physical products online from an eCommerce site where they DIDN'T charge your card until your order was physically ready to ship? If so, which company does this?

I bet there are some out there, but they've got to be the exceptions. It can't be just digital product vendors that charge credit cards in real time.

Thanks for any input on this topic,

Shawn
#charge #customers #ecommerce #immediately #orders #shipment
  • Profile picture of the author cassidywilliams
    Amazon does not charge your card immediately. Many companies do not charge before shipping.

    How often does it happen that when they do get around to charging the card, they discover that it gets declined? That could be an argument to convince them.
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  • Profile picture of the author dvduval
    Sounds to me like they need to automate the inventory process. One product I used that was good is Mail Order Manager. Until they know what they have by looking on the screen, it would be too messy to charge until they ship it. Even then, sometimes things can be back ordered for a long time.
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  • Profile picture of the author ShawnP
    Thanks for the feedback. If the company states to expect 1-2 weeks for processing, why not charge the card immediately when the order is placed?

    Plus, customers in other countries with different currencies often order on a specific day to get the best exchange rate, and if the card isn't processed immediately then the exchange rate could have greatly fluctuated by the time the card is actually charged. Another customer complaint.
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  • Profile picture of the author KirkMcD
    Most companies don't charge the card until the item ships.
    But many companies will put a hold on the funds on your card so that you can't use it for the amount of the order elsewhere.

    Now, we charge immediately, because we know we'll be shipping within 1 to 2 business days.
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    • Profile picture of the author ShawnP
      Originally Posted by KirkMcD View Post

      Most companies don't charge the card until the item ships.
      But many companies will put a hold on the funds on your card so that you can't use it for the amount of the order elsewhere.

      Now, we charge immediately, because we know we'll be shipping within 1 to 2 business days.
      So, a pre-authorization in real-time, but not an actual charge until the order is ready to ship. We talked about this too, and it may be the best approach given the feedback I'm getting here so far.

      Thanks. Glad I asked.
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  • Profile picture of the author Alexa Smith
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    Originally Posted by ShawnP View Post

    She even asked me if it was legal!
    I don't blame her.

    I would also have asked you that.

    As a customer, I wouldn't knowingly buy anything online from someone who's going to charge my card first and only then start addressing the issue of whether they have (or can get) the item to send to me. I think they're quite right to be concerned about doing that, and I think that most companies in that position don't do that.

    To be fair, the only place from which I routinely buy physical products online, myself, is Amazon, and they charge my card on dispatch, of course.
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    • Profile picture of the author ShawnP
      Originally Posted by Alexa Smith View Post

      I don't blame her.

      I would also have asked you that.

      As a customer, I wouldn't knowingly buy anything online from someone who's going to charge my card first and only then start addressing the issue of whether they have (or can get) the item to send to me. I think they're quite right to be concerned about doing that, and I think that most companies in that position don't do that.

      To be fair, the only place from which I routinely buy physical products online. myself, is Amazon, and they charge my card on dispatch, of course.
      Really?? Honestly, I've bought a lot of things online from a bunch of sites over the years and always assumed they would charge my card right away. I am buying today, I understand being charged today even if they can't get it to me for a couple weeks.

      That's what all the "allow x weeks for processing" is all about.

      But thank you for your input. Definitely gives me another perspective.
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  • Profile picture of the author Steven Carl Kelly
    According to the FTC, a merchant should provide a stated time frame for when an order will be shipped, but if a specific time is NOT stated, then the FTC tells consumers that they should expect their order shipped within 30 days. The shipment "clock" begins for credit card orders when the merchant gets the authorization, whether the card is actually debited at that time or not.
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    • Profile picture of the author ShawnP
      Originally Posted by Steven Carl Kelly View Post

      According to the FTC, a merchant should provide a stated time frame for when an order will be shipped, but if a specific time is NOT stated, then the FTC tells consumers that they should expect their order shipped within 30 days. The shipment "clock" begins for credit card orders when the merchant gets the authorization, whether the card is actually debited at that time or not.
      So, you're saying as long as it is clearly stated that the item will ship in x days then the card can be charged immediately? According to what you just posted there wouldn't be a difference in a pre-auth vs. an actual charge, so why not charge them right away. Hmm.
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      • Profile picture of the author Steven Carl Kelly
        Originally Posted by ShawnP View Post

        So, you're saying as long as it is clearly stated that the item will ship in x days then the card can be charged immediately? According to what you just posted there wouldn't be a difference in a pre-auth vs. an actual charge, so why not charge them right away. Hmm.
        The merchant card processor may have rules regarding this, the merchant should check with the card processor to be certain.
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  • Profile picture of the author Don Schenk
    Originally Posted by ShawnP View Post

    This company is dead set on NOT charging the customers' CC until AFTER they find the stock, bring it in (if it's in another location) and prep it for delivery. THEN, and only then, do they charge the customer's card, which causes a whole slew of issues in the meantime...declines, cancellations, changes to the order.ly ready to ship? If so, which company does this?
    My retail business first acquired merchant statis back around the mid 1970s. They were called Master Charge and BankAmerica cards - and became Mastercard and Visa.

    At that time the entire process was soooo new to businesses, there were few rules attached to it by the chargecard companies.

    Today, I have 2 seperate merchants' accounts, and with each one there is a set of rules I (and other merchants) must abide by. One of those "rules" prohibits charging the card until the time the item ships.

    It is probably a merchant account rule, and you won't be able to get around it without jeopardizing the company's merchant statis.

    What you need to do is get your hands on their merchant agreement and read it first.

    :-Don
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