A pre-authorization charge allows a merchant to estimate the final cost of a product or service and request the customer's bank or card issuer to put a hold on that amount on their account. This hold is temporary and will generally clear on its own after seven days or less if the transaction is not finalized. The money hasn't been taken out of the customer's account however it is in their 'pending' to ensure that the money is there for the merchant to process if required. It also verifies that the card is valid and the amount is available to be used if the merchant finalizes the transaction. Card pre-authorizations have a standard validity period of 30 days. If no action is taken within this period, the pre-authorization automatically expires, and the reserved funds are returned to the customer without further intervention. Merchants can also manually release the hold early using tools such as a Paynt payment terminal.
To do this, they can follow these steps:
1. Locate the receipt for the pre-authorization to be canceled.
2. Navigate to the Invalidate option on the terminal for scanning the receipt's QR code.
3. Confirm transaction details and finalize the cancellation.
4. A receipt will confirm the immediate return of funds to the cardholder.
These processes make pre-authorizations flexible tools for both ensuring accurate payments and resolving holds efficiently.