Credit card mistake - help!

sarah1980

I run a small business and back in May last year we took an order for around £3k. At the time we had a new credit card merchant services provider and the order (which was mail order) was put through manually using our online card processing service provided by one of the big 4 banks.

The long and short of it is, the transaction was processed as a pre-authorisation instead of authorisation (i.e. similar to how a car rental company would "hold" a certain amount on your card in case you damaged their car). It was never changed to "authorised", so we never actually took the money. :eek: This has only just come to light when the accountant has been doing the books for last year.

I have destroyed the customer's card details, although I do have his contact details. Question is, how do I go about discussing this with him and do I actually have any right to demand the payment?

Obviously I supplied the goods and he had some responsibility to ensure he paid us, but he gave us his card info in good faith and perhaps genuinely forgot about it and didn't notice it hadn't appeared on his card. He is not a regular client, in fact I haven't done any business with him since but my line of business is not the sort that involves regular orders.

Any advice would be gratefully received, I know it is my fault for not keeping track of aged debtors but I went on Maternity leave shortly after this and left the business in the safe hands of a family member!

hartcjhart

how could anyone genuinely forget 3grand not appearing on statement

all you can do is contact him and explain and hope he will pay

Amistoso_2

I think you only had up to 6 months to charge the card, so really don't know if you'll get the money off of the customer now. You could always contact them and see if they will pay up but I seriously doubt they will be willing to do that after such a long time

coldstar

In my opinion you are fully entitled to payment. He placed an order, you supplied the goods and services and he should pay the invoice.

You should write to him with full details of the order, explain that a recent audit has revealed that he has never paid for his order and request payment be made.

I had a similar situation a few years ago, wrote to the customer and got payment.

Freddie_Snowbits

Errors and Ommissions Excepted

makapo

sarah1980 wrote: »

I have destroyed the customer's card details, although I do have his contact details. Question is, how do I go about discussing this with him and do I actually have any right to demand the payment?

Obviously I supplied the goods and he had some responsibility to ensure he paid us, but he gave us his card info in good faith and perhaps genuinely forgot about it and didn't notice it hadn't appeared on his card.

My opinion - yes you definitely have a right to be paid. He has had the goods, so he owes you the money.

Most people would notice if an expected charge of £3000 did not appear on their card. Since he didn't get in touch with you about it, he may think that he just had a stroke of good fortune and will never have to pay it. If so, it may come as a blow to be asked for payment now, and human nature being what it is, he may argue that you can't ask for payment after such a long delay. Before you contact him, you might be wise to get official advice, so you know exactly where you stand legally. I don't know what agency to suggest, but if you post your question on the Small Biz board, someone there might know.

PS Offer him a "good will" payment to make up for inconvenience.