What is a Pre-Authorisation on a credit card?Updated a year ago
When an order is placed with us through our Online Store, an immediate credit card pre-authorisation occurs. Let's start by clarifying exactly what a pre-authorisation (commonly referred to as a "pre-auth") is.
A credit card pre-authorisation is much like any other charge to a credit card, except instead of actually debiting funds from the cardholder a temporary "hold" is put on the funds that lasts for 5 days. At a technical level, the actual duration of the hold depends on the merchant classification code (MCC code).
Once a credit card has been pre-authorised the cardholder cannot go and spend this money anywhere else. However, at the same time the charge doesn't actually show up on the cardholder's credit card statement. (Although, if you call the card issuer, they will confirm that a pre-authorisation is holding funds on the cardholders account).
The merchant (us) must go in and "capture" the funds within the set period dictated by your bank. If not, the pre-authorisation will expire and the funds will be released by the card issuing bank back to the cardholder.