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  1. #1
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    Charging Card Twice (shipping fee)

    We have a unique situation where we sell a product on behalf of someone else.

    The product is sold by Company "A" and they have a merchant account. We ship the product and would like to charge the customer the shipping charge on OUR merchant account.

    So we would need to charge the customers card for the product and then charge the card again for the shipping. On the customers credit card it would list both the company that sold the product and our shipping fee.

    I assume this is legal because the card companies would like each merchant to have their own account. From a programming standpoint this also seems rather easy.

    Has anyone done this?

  2. #2
    SitePoint Enthusiast Ryo-ohki's Avatar
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    I think consumers would surely balk at something like that (being charged seperately for the goods and the shipping fees). I sell items from other vendors who are the ones who actually ship the goods (dropshippers) as I don't want to have to keep physical inventory myself. When I submit orders I get charged for shipping and I pass the fees on to my customers. I don't send in the orders to my supplier until I have been paid first so I don't have any out of pocket expenses for the items I am selling.

    Now my situation isn't the same as yours but it is similar. I am assuming your supplier just gives you a certain amount of inventory to sell in their stead without charging you for it or any shipping. That's the only scenario I can think of that would lead you to this type of situation. You should charge the customer the cost of the goods+shipping and then pass on whatever Company A is supposed to get from the sale. That would be preferable to hitting your customers with two charges from two different companies.

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    I understand what you are saying. However, according to VISA, MC,etc they do not want someone using a merchant account for another company.

    The goal by the card companies is that the person who sells the product name appears on the consumers credit card statement.

    Of course this is related to the whole PayPal concept, where they use their merchant account to sell products for someone else - that also is against the rules.
    Last edited by pilotjourney; Apr 16, 2011 at 08:49. Reason: forgot a word

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    SitePoint Enthusiast Ryo-ohki's Avatar
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    Quote Originally Posted by pilotjourney View Post
    I understand what you are saying. However, according to VISA, MC,etc they do not want someone using a merchant account for another company.
    You need to think about the people who will be buying these products from you. What I don't understand is why you would want them charged by your supplying company for the actual product sale and then you would charge them under your company for the shipping. It just doesn't make sense and no business operates like that because it would look suspicious. Obviously your supplier wants to get paid and doesn't care if its after the sale of the items since they no longer physically have them in their own inventory. It would be better for the end user's piece of mind if you charged your customers the cost of the item and the shipping all at once. If I ordered something from a website and got hit with two charges from two different companies I probably wouldn't shop there again. Also I would wonder why my personal information is being given to this separate entity that I did not authorize. After the sale (or so many sales) you can simply pay your supplier whatever portion they are supposed to get directly as that should your responsibility.

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    This is why Paypal's free options aren't always the best... You can actually do this with a real merchant account. Merchant accounts and a payment gateway come with a Virtual Terminal that allow Post Authorizations in most cases. So (like a hotel), you can actually authorize the card for one amount, then complete the sale for a higher amount. As long as the final amount isn't 20% higher then the first amount you're in the clear to my knowledge (but check with your merchant account provider). But this is definitely doable with a real merchant account and payment gateway that includes a virtual terminal for manual entry - it is called pre-authorization and post authorzation (or force post).

    But yes your MERCHANT will have to have this account in their name.

    As for charging in someone else's name you can do this if you operate as a payment aggregator - which will require you open a high risk account initially - the percentages are higher for this as a payment aggregator and it's harder to be approved as one because you are being trusted to essentially become your own Paypal. It is doable however as I have set up an aggregator recently for a merchant in an unrelated business.
    Joe
    MerchantSeek.com
    Your Payment Acceptance Source - Find merchant account providers
    http://www.merchantseek.com


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