Today The Official Merchant Services Blog is going to step off its SOPA soap box and return to a much more focused and specific topic — Partial Payment Authorization.
In November, 2011 Partial Payment Authorization was mandated by MasterCard and Discover. This mandate requires merchants to support partial payments on their terminals. Host Merchant Services reported on this mandate and you can read about it here in our Article Archive.
Pay Attention To The Purchase
We’re bringing this back up because there has been some confusion lately among merchants about this particular issue and this mandate. What keeps happening is that merchants are not noticing when the partial payment pops up on their terminal. This is a problem because of the way these payments function. If you do not notice that it is a partial payment and do not obtain the rest of the payment from the customer, they can walk out of your store with their purchase and you lose money.
So you need to really pay attention to the purchase. It will show up on your terminal screen. It will also show up on the receipt. Here is an example of what a receipt will look like:
In cases where only a partial authorization is returned, the merchant will need to collect another form of payment for the difference. In the instance where the cardholder does not have another form or payment to pay the difference or wants to use a different form of payment for the full amount, a real time partial authorization reversal must be performed in order to free up the funds that were previously held up by the authorization.
Host Merchant Services offers step-by-step guides on how to perform these real time partial authorization reversals.
Which Businesses Are Affected?
The other area of confusion that seems to be cropping up with Partial Authorization is which businesses are affected by this mandate. Not all businesses are currently required to use Partial Authorization. However, there is a long list of businesses that are, and this list includes the most popular merchant codes. Here is the list:
So just to review, Partial Payment Authorization is mandated by MasterCard and Discover. The listed businesses above are absolutely required to utilize it. It is easy to lose track of when these occur if you do not pay attention to the receipt or to your terminal when running the transaction through. The most common mistake is someone processing the transaction is in a rush and the receipt looks very similar to a normal, approved, full transaction when run through. Terminals do not have a sound or warning that this type of partial payment happened. So time and attention to detail are required for these payments moving forward. When a partial authorization happens you need to have your customer offer an alternate payment for the remainder of the transaction or you need to reverse the transaction right then and there.
For More Information
Host Merchant Services is available to walk any interested merchants through this process. You can contact us and we will be glad to explain how partial authorization works. Or you can take advantage of the materials we offer on this very website. To get more information regarding Partial Payment Authorization, you can:
- Visit the Article Archive for a Partial Payment FAQ
- Download our Hypercom T4205 Partial Authorization flier here.
- Download our step-by-step guide on how to use Partial Authorization with a Hypercom T4205 Terminal here.
- Download our Verifone VS510LE Partial Authorization flier here.
- Download our step-by-step guide on how to use Partial Authorization with a Verifone VX510LE Terminal here.