Did your bank return an AVS mismatch, but place a hold on customer’s money?

If you have ever experienced this, you probably remember the angry customer on the other end of the phone. And if you haven’t, pay attention, because you’ll want to know what to tell your customers in case it ever does.

So, here’s my story.

I decided to order a downloadable product today. I placed the item in my virtual shopping cart, entered my name and address and hit the button to complete my checking. The next screen told me there had been an AVS mismatch and my order could not be completed.

Now, as a merchant myself, I knew that meant that the payment gateway had queried my bank to see if funds were available and if the address matched. Apparently, the address I entered did not match, according to my bank.

At this point, I decided to login to my bank’s website to see what address I had setup, because I knew I’d entered the right one. That’s when I discovered that $115 had been placed on hold at my bank account by the company that I’d just attempted to make a purchase from.

What?!

For a moment, I found myself in the shoes of the frustrated customer who is trying to buy my stuff, but can’t — and has just discovered that the money is gone anyway.

Luckly for this merchant, my brain kicked back in and I remembered this:

After the payment gateway queries the bank to see if the address is correct and funds are available, the bank places a hold on the funds. If the purchase is not completed, then the hold is removed from the funds within a few days.

Not sure about your bank, but at mine, those funds remain in a pending status on my account page until they are removed, or fully processed.

So, if you ever have a customer who experiences this situation, explain to them how the process works — and then suggest they call their bank to find out why the hold has been placed and what their policy is on how many days it will take for the hold to be lifted.