Credit Card Processors...

Running a business is a Sisyphean task. Everyday, there is another crisis to be dealt with and another item to toss on the bottom of the to-do list. For those of you who have never been an entrepreneur, do something easier, like inventing a perpetual motion machine.

Today's crisis du-jour deals with our credit card processing company. They recently tightened some of their underwriting rules for us requiring information from customers to match exactly for billing address and zip code.

This sounds like a no-brainer, except for one large issue. The way that the credit card network works is as follows (more extensive version here):

• We send in our customer's information (card, name, etc).
• They check if money is available and put a hold on the funds. They send back to us an approval code and a separate code indicating if the address matches.
• If the card had funds and did not match the address, our processor then voids the authorization/hold.

Here is where the money wrench is thrown into the process. Many banks that issue debit cards don't do anything when they receive the "void" request and, instead, just let the transaction time out (usually a few days to a week). So, the transaction just "sits" out there, sucking up available balance from the customer's card until the bank deems it is ok to release it. And, to make it worse, the customer may then try 1 or 2 more times to try to get the address right.

Of course, customers look at their statement and see 3 charges from MaxDelivery when they only placed one order. And, naturally, they are upset at us thinking that we are trying to pull a fast one.  We can protest all we want that those authorizations NEVER can ever go to MaxDelivery, but the bank conveniently puts our name on the authorization, so the customers get upset at us.  And, to make it even better, all that we can do to fix the problem is call the customer's bank and beg them to please release the hold.

Today, we should be able to get this decision reversed by the card processor (I hope) by putting in place some physical controls if the address doesn't match (e.g. get a card swipe/imprint if the info does not match).  But, it's just another in an unending stream of tasks to be done if you care deeply about your customer's experience  - which I do.

So, for those of you aspiring business owners, please ensure your are a true masochist before you take the plunge.