Author Topic: PayPal pre-authorisation - How long do they last?  (Read 6937 times)

*Brum6y*

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PayPal pre-authorisation - How long do they last?
« on: June 10, 2011, 05:12:34 PM »
I have a neighbour who does a bit of online purchasing - some on eBay and some not.  Like many people, they are only interested in an honest purchase, not to rip anybody off - so their buying history is exemplary.

However, they placed an order with a Canadian business through their website with payment via PayPal.  Since the business had to confirm stock availability, they did a 'pre-authorisation' for the full amount (over $300 AUD) to ensure funds were available.  The final charge would be put through when the order was finalised.

Unfortunately, the vendor's payment gateway 'flagged' the transaction as a high risk and that it should not be accepted, so they cancelled the order.  Mind you, they did not notify my neighbour.  They only found out when they started chasing up the status of the order. The vendor also declined to give any details as to why the order was cancelled.

BUT.... the pre-authorisation is still in place.  My neighbour's PayPal balance still has the funds debited.

They have contacted PayPal ... who have said the merchant needs to cancel the transaction.

They have contacted the merchant ... who has said the authorisation will automatically 'drop off' after 3 days.

I've not gone into the PayPal side of things, but I do know a bit about plastic.  The merchant's statement is correct for credit card processing, but is the same process in place for PayPal?  Is the merchant - incorrectly - looking at PayPal pre-auths in the same way as credit card auths?


Can anyone help?

*CountessA*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #1 on: June 10, 2011, 06:26:00 PM »
I have never heard of a PayPal pre-authorisation.

How did your neighbour fund the PayPal payment? Was it by card or by PayPal balance?

If by card, I'd actually be chasing up the funds via my card supplier at this stage.

Is it worth calling PayPal again to speak to a supervisor (who presumably knows how such things work) and ask for an explicit and definite statement about this situation?
"No man is an Iland, intire of it selfe; every man is ...a part of the maine; ...any mans death diminishes me, because I am involved in Mankinde"

*Brum6y*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #2 on: June 10, 2011, 08:12:53 PM »
It was from their PayPal balance - no cards or banks involved at all.


It is a mechanism where a merchant can get a guarantee of funds when an order is placed, but before the final amount has been determined. It would seem a practical mechanism for order fulfilment with uncertainty of stock, without having to go back to the purchaser for confirmation - and the subsequent issues of delays, 'change of mind', etc.  The buyer will just get sent (and charged for) whatever the merchant has in stock.

In the buyer's transaction list, there are two entries:
<date>  Authorisation To  <seller>  Pending  Details  <amounts...>
<date>  Temporary Hold By  PayPal  Placed  Details  <amounts...>

In practice, PayPal take the full amount from the buyer's account and hang on to it until the merchant processes the final payment amount. PayPal call it a 'hold' - but the funds are debited from the buyer's PayPal account (Gee, that sounds familiar...)

*Brum6y*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #3 on: June 13, 2011, 08:08:19 AM »
The latest bit of information I have (which I haven't been able to confirm in any documentation) is that the pre-auth is treated in a similar manner to the 'Send Money' option where the recipient has to claim it.  After a period, if the funds are not claimed, they are returned automatically.

I have seen a period of 29 days mentioned but, again, have been unable to confirm this.


Does this ring any bells with anyone?

*CountessA*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #4 on: June 13, 2011, 12:18:56 PM »
No - but should not the person "pre-paying" be able to call PayPal to get the funds back immediately?
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*Brum6y*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #5 on: June 13, 2011, 05:51:21 PM »
They did call PayPal .... who said it was up to the merchant to act and advised them to contact the merchant (and we know how far that got them).

Also, it seems they are unable to raise a dispute on the transaction - so, unless they find some way of persuading the merchant to act, it appears their only option is to wait it out.

*Brum6y*

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Re: PayPal pre-authorisation - How long do they last?
« Reply #6 on: June 29, 2011, 02:35:07 AM »
Answer: The pre-authorisation "Expired" (PayPal's terminology) after 29 days - going by the dates used.

There is a little uncertainty about the times, which might make the period closer to 30 days but, in essence, they were out of pocket for a month.


The question that now remains is .... Just what was the fee that would have been charged for the merchant cancelling the transaction?