When orders are placed by customers, you need to authorize payments and then collect the payments. You can define your business rules to authorize payments and collect payments at the time of shipment invoice or order invoice and can accordingly collect payments for customer orders. Payment collection method depends on the nature of your business and on various other parameters of the order lifecycle.
- Sourcing and scheduling configurations.
- Backorder of lines that are resourced to a different node at the time of schedule, release, or backroom pick.
For more information, see Configuring financial rules for sales order.
If this configuration is not enabled, Sterling Order Management requests for new authorization for split shipments.
- Line1 - Store1 - $500
- Line2 - Store1 - $100
- Line1 - Store1 - $500
- Line2 - Store2 - $100
In this scenario, Sterling Order Management charges the original authorization ID for one shipment ($500) and request for new authorization for balance amount ($100).
It is recommended that you enable the Use same authorization multiple times option to reduce the number of calls that are made to the payment service except that your business rules require that you need different authorization ID for each charge.
When Use same authorization multiple times is enabled and the Reverse excess auth or Partial reversal supported options are also enabled, Use same authorization multiple times takes precision, and same authorization ID is used.
For more information about how to use the same authorization for multiple settlements, see this article.
Initiation for payment collection
Payment collection is the process of initiating transfer of funds from customer's account to merchant's account. Collection can be triggered by invoicing the order or the shipment. The point of initiating payment collection depends on the business rules.
- At the time of customer pickup for pickup orders.
- At the time when item is loaded for shipping or delivery.
- Line1 - $500 - Store1
- Line2 - $250 - Store2
Sterling Order Management can initiate the collection for the entire order at any point in the order lifecycle by creating an order invoice based on the business rules.
Consider the order in the previous example. After the order invoice is done, Sterling Order Management requests for collection of the entire order amount of $750.
A custom time-triggered transaction can be configured to pick up orders
with the Created or later status and orders can be invoiced by calling the
CreateOrderInvoice API. This initiates the collection for all the created orders
for the entire order amount.
The customer is charged for the entire order on order creation and so it is also termed as a Pre-charge order.
You must collect payment by using this option with caution because orders can be backordered and successful resourcing might not be possible every time. In such scenarios, you must initiate a refund for the backordered lines. You must not use this option if the order is expected to change.
- Grocery orders that contain fruits. The total for the order is not known at the time of order creation. The order total might increase based on the final weight of the fruits.
- Hotel industry when order total is not known until the customer checks out of the hotel. In this scenario, you can do a $0 or $1 authorization.
- Retailers selling large appliances. Customers might request for extra services such as installation, assembly, which might get added as extra cost to the order total.
Risks of order invoice after fulfillment
If you select the option to collect payment after fulfillment by using the order invoice method, some risks might be involved.
- Line1 - $100 - Store1 - Pickup
- Line2 - $50 - Warehouse1 - Shipping
Hence, if you use order invoice, ensure that you trigger payment collection before fulfillment of any of the lines.
- Orders for in-stock items.
- Confidence of promising is high that items are not backordered during schedule, release, or backroom pick.
- Sterling Order Management is customized to refund if any line is backordered.
- If the payment type for the order is a gift card.
- Order is not expected to change.
- Merchant is not storing the payment token for reauthorization or for future orders. It is not a card on file transaction. If the existing authorization expires, merchant cannot take a new authorization as the payment token is not present.
Shipment invoices are also useful to defer payments for unavailable items.
For example, an order contains the following line:
Line1 - Quantity 3 - Store1 - Unit price $10
At the time of backroom pick, it is found that only two quantities of the item are available for shipping. The unavailable quantity can either be fulfilled from another store or can wait until future inventory arrives at the location. If shipment invoice is done for two quantities, Sterling Order Management requests collection for two quantities only - $20. The remaining $10 are charged when the unavailable quantity is shipped in future. If Use Same Authorization Multiple Times is enabled, then the same authorization can be used for two different settlement requests.