Understanding Exact Authorization: A Guide for Operators
If you’re a vending operator with a G10 or G11 card reader, exact authorization is a new setting that will make your life easier.
Typically, when a vending machine customer makes a purchase with their card, a pre-authorization hold is placed on their account for a predetermined amount. This hold is not a charge, but a temporary reservation of money to cover the transaction. This pre-authorization hold amount is often more than the actual cost of the product, which can cause confusion and frustration for your customers. Exact authorization solves this problem by holding the exact amount of the transaction instead.
Benefits of exact authorization for operators
Switching to the exact authorization setting offers several advantages:
- Reduced Operational Burden: Operators often face a high volume of calls from customers confused by the pre-authorization hold, believing they were overcharged. With exact authorization, the authorization hold amount will match the transaction price, eliminating customer confusion.
- Increased Revenue Potential: Since only the exact amount is held, customers using a card with a fixed value amount like a debit card, will have increased purchasing power. This could result in higher sales on your machines as customers can purchase up to their limit without being denied because of pre-authorization holds.
- Improved Brand Reputation: You’ll no longer see negative customer reviews claiming that you overcharged them. Instead, you preserve your brand reputation by providing a seamless customer experience.
How exact authorization works for your customers
To illustrate, let’s say a customer at your vending machine purchases a Snickers bar for $2.25.
With the standard pre-authorization setting in place, a predetermined hold amount (like $5) is placed on that customer’s account before the payment is posted a few days later, that hold amount will change to $2.25 when the transaction is eventually posted.
With the exact authorization setting, when a person buys a $2.25 Snickers bar from your vending machine, a hold is placed on their card for exactly $2.25. This eliminates confusion and removes any customer fears of being overcharged.
What to consider when switching to exact authorization
Exact authorization is currently available on G10 and G11 card readers.
When switching to exact authorization, those devices must be set to single-vend mode. Single-vend mode allows only one item to vend per transaction.
If you want to implement exact authorization, you should know customers buying multiple items will need to perform multiple transactions. Financial institutions may set limits on how many transactions people can make each day. And some may limit the number of times customers can make a purchase from the same merchant. Keep those limitations in mind if you’re looking to switch to exact authorization.
Have questions about exact authorization?
Q: Can exact authorization be used on all types of vending machines?
A: Exact authorization is currently available only on G10 and G11 devices that operate in single-vend mode. Any vending machine with a G10 or G11 card reader can use exact authorization.
Q: Will exact authorization be standard in the future?
A: By the end of August 2024, all G10 and G11 devices operating in single-vend mode will automatically have exact authorization enabled.
Q: What should I consider when switching from multi-vend to single-vend mode?
A: You should be aware that switching to single-vend mode will require customers to complete separate transactions for each item they wish to purchase. This might initially seem less convenient, but it ensures clearer transaction records and may reduce your total transaction fees if the financial institution charges per transaction.
Q: How does exact authorization impact transaction limits set by financial institutions?
A: Financial institutions sometimes set limits on the number of transactions a cardholder can make with the same merchant in a day. You should check these limits to ensure that switching to exact authorization and increasing transaction frequency doesn’t inconvenience your customers.
