Are there systems or safeguards in place to prevent charges with no corresponding order?

Are there systems or safeguards in place to prevent charges with no corresponding order?

I tried placing an online order while using a gift card and received an error message.

I then tried to place the order again and noticed all the money missing off the gift card. I was told by the company that if I had not called in and informed then, they would have taken my money and never returned it. However they acted like it was the standard way that all businesses work however I have never had this issue with any other company and think the company are either doing this by design or extremely reckless system are allowing for this.

My question is do most payment processing system design not to charge a giftcard/credit card,etc.. unless an order has actually taken place?

Thanks.

 

That is a great question. The simple answer is no. The payment system is designed to charge the card automatically as long as the transaction is approved by the issuing bank or the cardholder's bank. The approval of this transaction is based upon whether the cardholder has funds in their account or has a sufficient line of credit that clears the transaction total. There are no specific safeguards the processor can put to block or not charge gift cards, certain credit cards, etc. However, there is an upfront policy we need to view for all new merchant accounts that are approved by conventional processors like us. One of the questions we ask if whether payment is received before or after service or product is delivered or provided. If it is after, they fall under a higher risk category with our underwriting for approval on the account and we need to know how many days typically does it take for the customer to receive the product/service. It is up to the standard business practice of the business whether they will charge the customer before or after the product/service is delivered. Not on the payment processor. If you have any questions, feel free to contact us at 800 644 3909 or email at .

 

I believe it is their standard procedure. It can happen with third party online payment processing services. Sometimes even if the charge has happened it may result in an error message. The company can trace the charge and refund you only after the fact.