Aloha EDC Authorization Procedures 1

[sinouye]

Can someone give me a brief summary of the steps Aloha EDC goes thru when it obtains authorization on a credit card transaction. The info I just received from Radiant Systems is that EDC obtains authorization when it batches at night. Is that true?

 

[brewman52]

EDC authorizes every original transaction as they are requested. If you have tip assumption set it will authorize for check amount plus tip %. They do not authorize adjustments such as tips. Those correct themselves when you settle batch at EOD. Which is why customers debit cards show different amounts for a few days!

 

[sinouye]

I understand the initial authorization for the check amount plus X% additional for tip. I don't understand what everybody means by correcting at the time of batch. For example, a couple of days ago we batched at 2am, day +1. The total charges, including tips was $X. The total batched was $X. The "okayed" batch was $X. Everything agreed. However, when I checked the exact time the authorization for select charges were received, many were between 11:00a and 2:30p, day +1. As I see it, our original authorization which came in between 8:00p and 10:00pm, day 0, we replaced by a second authorization sometime during day +1.

If this is the case, if any "tip$" were rejected, we'd have to rely on the initial authorization which didn't include "tip$". Am I correct?

 

[gt5133e]

The way it works is the initial authorization is for the $ amount plus the % set up in EDC to cover any possible tip. Basically putting a hold for that amount on the customers card. Once you batch out the initial charge is deleted and the final amount is then taken. So this works because the card had a hold on it for usually the $ plus 25%, you set up the % to be high in case the customer gives a big tip.

 

[sinouye]

So, you are thinking that the original authorization gets "replaced" by the final charge. You do agree or don't you, that the final charge which includes tips is higher than the original authorization?

I did some research on this today and found that Visa, Mastercard and American Express all prohibit obtaining an authorization for more than the original charge in their merchant agreements. But, they also say that they guarantee the merchant up to 20% of the original charge, in the event the additional charge is rejected. You do have to get an additional authorization for any charge in excess of the 20%. I understand that about 60% of all 70 billion Visa restaurant charges are debit cards. I can now understand why they got tired fielding questions about the additional authorization.

Thanks for your help. You clarified things greatly.

 

[gt5133e]

you do agree or don't you, that the final charge which "includes tips is higher than the original authorization?

No, the final charge is usually less, unless there is a super large tip. But this is of course only a problem if the customer disputes the charge then you get into the merchant agreement stuff. If a customer is going to give a large tip, then usually you don't have anything to worry about since they are not going to fuss or be one of the people who are constantly checking there accounts online.

check out this thread as well:

http://www.tek-tips.com/viewthread.cfm?qid=1429926