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We received a question from a Shop.org member to the community. Looking forward to seeing the responses below if anyone has any ideas.
Thanks
————————————————————————————————————————————————-This past holiday season I noticed a spike in the use of network branded gift cards and prepaid products online. As many of you already know, network branded (open loop) gift card volume has experienced strong growth in recent years, as has online shopping volume in general. As usage of these network branded gift cards increases we see evidence of a growing problem in the customer’s online shopping experience.
Let’s say I received a $50 gift card for the holidays, and I’m shopping at a brick and mortar retail store. I grab a sweater for $60 off the rack and I take it to the clerk for checkout. In most cases, the clerk can swipe my card and then ask for a second form of payment to cover for the $10 balance I owe towards that sweater. Many merchants are enabled for this type of processing due to coding called partial authorization available at their point of sale. The customer is able to easily use the entire balance on their gift card easily and leaves the store happy.
If you think about it, the situation is different online as these split transactions are not possible. First off, most checkout windows that I’ve seen only accept one form of payment. Many merchants accept in-store (closed-loop) gift cards that can be applied towards their purchase total, but this is not the case for network branded gift card acceptance. More and more network branded gift card users are complaining that their online shopping experience isn’t like it is in the physical world.
Is anyone out there aware of a solution to this problem of processing split transactions online? How are other merchants currently handling this issue? I would appreciate your input/thoughts/comments. Thanks!
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4 Comments
This is definitely an issue for consumers, and we think it will only continue to grow as people shift their spending online. For example, what happens when siblings want to go in together on a gift for their parents’s anniversary, and they want to pay with separate credit cards since they live in separate parts of the country? Right now, there’s no easy solution (it probably includes one person getting stuck with the tab and then having to collect checks or $ from Paypal from the others that wanted to be a part of the purchase…what a pain!).
One example of a site that does offer the ability to pay with 2 different credit cards for one transaction (in addition to allowing for coupons or gift cards) is Dell.com. Dell’s payment process and functionality ranks among the best in all of e-commerce with respect to the overall customer experience.
Jordy Leiser, CEO
STELLAService
Every retailer where I’ve used the retailer’s proprietary gift card is indeed able to accept split tender at checkout. Inability to accept split tender is a key roadblock to some retailers from moving forward with gift card functionality. Got to have split tender before you can have a decent gift card experience.
But as regards OPEN LOOP gift cards, those generally do get entered into the credit card tender type and yep, websites usually do only accept one credit card per checkout, so then that would indeed be a problem if the gift card isn’t sufficient for the whole online order. And yep, most POSS systems in stores can keep accepting credit cards til the ticket amount is reached.
This is an example of an order management limitation created by inexperienced developers.
There is no magic to the solution. It’s a programming issue. If your order management system or ecommerce platform does not or won’t handle this situation, it’s just evidence of the limited experience of those who developed the system or platform you’re using.
The solution is simply to modify the system / platform — or put it on the list of requirements for the next time you consider a system / platform upgrade.
There are numerous order management systems and ecommerce platforms that do handle multiple payment methods on a single order.
This is definitely a growing issue for online shoppers as well as online merchants. However, we should start to see improvement in handling these split transactions as part of the mandate put forth in the new MasterCard processing requirements (http://www.firstdata.com/downloads/partners/fd_gpm_notice_acquirer_support_27april09_partnersupport.pdf). Ecommerce merchants will be required to offer at least one opportunity for parital approval per the schedule of MCCs and associated timeframes listed.