Authorize.net declined transactions put funds on hold

Too often, online merchants receive calls from customers who've made an single online purchase, yet their bank account indicates multiple charges. The problem occurs when a patron attempts to purchase tickets but enters certain fields incorrectly. Internet gateways perform use something called "address verification service". In other words, they test whether the address entered matches the credit card's address on file. If it fails, patrons receive a message saying the transaction was declined.

While the credit or debit card is never actually charged, each of the declined attempts are marked "pending" in the bank's online statement. Multiple requests translates to multiple "pending" charges. So if the patron isn't charged, what is the concern?

Unfortunately, a pending charge can remove the availability of those funds temporarily. For most customers, this is insignificant. But when you are a college student approaching the weekend when reversals are on hold until Monday, the lack of money can be very significant. When this happens en masse as it did during the sell out for a recent Elton John show, it might just force change. In that debacle, many would-be concert goers were left angry when 4000 pending transactions were realized due to errors in coding

It is ridiculous that in an age of fast-flying information, Internet gateways that handle credit card processing are not reversing these transactions immediately. In the interim, for us here at ThunderTix and our venues, we can help by sending a fax to the bank to release the patron's funds immediately.

So, as a venue, what can you do to help minimize these pending transactions? If you are not at high risk for fraud or if you draw from a largely college age audience where lack of funds may be worrisome, consider turning off the AVS or the CVV code requirements for Authorize.net. It may add .10 cents to the cost of processing a $10 ticket, but it will buy you a lot of good will.

To change your settings, log in to your Authorize.net account and take the following steps:

1. Click Settings in the left menu
2. In the center of the page, beneath Security Settings, click "Address Verification Service"
3. Uncheck all boxes set to reject a transaction for missing or incorrect address data
4. Click Submit

In the meantime, let's hope the anger from the Elton John fiasco reaches a decibel level high enough to reach the ears of Authorize.net and force change!