Posted in Customer Support.
Okay, funding holds are a sensitive issue that requires a degree of understanding, especially as it relates to the risk that we at Dharma take as a credit card processor. “Holds” happen when a merchant processes a card payment and does not receive their deposit for the transaction during their normal funding period. The principle reason for such a hold is when a sale is run for an amount that is considerably higher than the “occasional high ticket” amount that was entered on the original merchant application. For example, let’s say Jeff’s Tofu Palace has an average ticket of $25, but has listed an occasional sale of $500 for a large group. Now say that a $1000 credit card sale has just been run (maybe for a catered event). This sale (plus often the whole batch amount) will be withheld, because the automated system that the Loss Prevention Department uses to monitor transactions higher than your noted high ticket, has flagged the sale as potentially fraudulent. This is the same logic that your personal credit card company uses when an unusually large transaction is made, and they often contact you to confirm that the sale is legitimate.
The Loss Prevention Department will request confirmation from the merchant that a transaction is legitimate by requiring a copy of an invoice with the cardholder’s contact information as well as any information about the transaction (e.g. what was sold, shipping details, the amount of the sale). Sometimes a sale is flagged and is not held, though an invoice is still requested. There are also merchants who occasionally have very large sales – like an office equipment company that may run a $20,000 or higher sale – who will proactively fax a copy of the invoice to the Loss Prevention Department in order to prevent a hold from happening. In any case, a little knowledge goes a long way in managing expectations, so we urge calm and understanding should a funding hold happen to you. Thanking you in advance!