When You Should Capture a Charge in E-Commerce

If you run an e-commerce store you're well aware that chargebacks on credit card transactions can be costly. You may also occasionally have upset customers if you charge a card right away and take a few days to ship the order. One of the strategies you can use to avoid these problems is to capture the payment when you ship the order instead of automatically capturing it during checkout.

Wait – What Does Capturing a Charge Mean?

There are a couple things that a payment processor can do with a credit card during checkout. It can capture a charge, it can authorize a charge, or it can do both at the same time.

Authorizing a Charge

The first thing a processor can do is authorize a charge. Authorizing a charge ensures that the account has enough credit in it for the transaction but no cash is transferred.

A good example of this would be a restaurant. A restaurant might authorize an amount slightly higher than the bill. This practice makes sure that there is enough credit in the account to pay for the bill and a possible tip.

Capturing a Charge

Now that you know what authorizing a charge means you probably have a pretty good idea what capturing a charge means. If you have already authorized the funds you can capture them which allows you to capture up to the amount authorized. Usually this can be done up to seven days after the initial authorization.

Authorizing and Capturing

The last option which is usually the default option in e-commerce is to authorize and capture at the same time. A good example would be a grocery store. There's no need to capture the charge later that day so you might as well capture the funds right away.

So When Do You Capture A Charge?

So do you capture charges immediately or should you capture them later? My suggestion is that if your deliverables are all automatic (ex. downloadable products) you should capture the charge immediately. There's no benefit to waiting. If your deliverables have to be shipped you might be capturing the charge too early. The user may want to add something to their order and cancel the charge (ugh). Capturing when you ship the order minimizes that risk.

Payment Gateways With the Most Flexibility

Unfortunately while this sounds really nice not all payment gateways allow you to do this easily. There are three WooCommerce payment gateways that do this pretty well: Stripe, Braintree, & Authorize.net AIM.

Stripe & Braintree allow you to authorize charges and you can manually charge them later. The only downside is that you have to manually log into the payment gateway and make the charge. Kind of a pain in the butt and to be honest I don't know if it's worth it.

Authorize.net AIM on the other hand is an awesome solution. They give you a menu on the edit order page which allows you to capture the charge right there. Now that's a nice user experience.

 

Happy capturing!