Charging after the customer receives the item

[ahl]

Hi friends,

I know this sounds like crazy but in my market that could make a real difference.

I have an online store for people around the world to buy stuff for their relatives/friends in my country of origin. They buy it, I ship it.
There are so many scams and issues around this type of business that people will definitely run after the first company that offers to charge them after the order gets to its destination.

I was researching about authorizing the transaction and then process it after the order is received but this process takes too long and Paypal(which I'm using to process my CC transactions) wont hold it for so long.

I was also thinking in getting some sort of insurance against this kind of "fraud" or "MF" who decide not to pay after the order is shipped and received.

So...I have to questions here:

1- Is there a way of blocking or authorizing the amount of the order for the time it takes to be delivered?..this could take up to 20 days in some cases.

2- Is there any kind of insurance I can get to protect myself in case of chargebacks and people I cant collect payment from?

If any of you have any tips I can use to implement this or something similar I will really appreciate it.

Thanks a Lot

[vangogh]

I'm not sure what you mean with your first question. What would be getting blocked. If I'm understanding right no money changes hands until deliver.

As far as insurance I doubt there's something ready made for this, but I think you can get insurance for just about anything.

Who would be delivering the products? If it's someone you employ then it shouldn't be too hard to collect. If not you'd have to see if the various deliver services in each country will collect the money for you. If only some do maybe you could only offer the cash on delivery in those countries.

[Spider]

If I understand the question correctly, all the shipping of goods is done in one country, the country of the business (although you don't say which country that is.) The orders may come from overseas, but the goods are shipped and delivered in your country of residence.

For small items, UPS and Fedex do COD (Cash On Delivery), I believe, where the recipient pays the deliveryman for the goods received. But I think that is not what you want - you want the person ordering to pay for items delivered to a third party, but only after goods are received. Check with UPS and Fedex to see if they have a solution for you.

For larger (more expensive) items, www.escrow.com will accept payment from the purchaser and hold it until they receive proof of receipt of goods, then release the funds to the vendor. I have used them and found them very effective. I can't see this being useful for small amounts of money, though.

PayPal has a Bill Me Later facility - you might want to look into that. Also, as a business, you can invoice through PayPal. Check with them if they have any insurance or payment guarantee against non-payment.

I'm sure there is a solution out there - you aren't the first person with this problem. You might want to talk to your local bank manager - he/she may have a ready-made solution for you.

[ahl]

Hi guys

Im sorry for not being able to check the forums earlier.

Let me be more specific. My site is for people to buy food & medicines and I ship them to Cuba. So....no FEDEX, UPS or any known shipper. Just private small agencies that deliver the goods in the buyer's family house or wherever the buyer decides.

There is no way of doing COD, because the whole point is that people there don't have how to pay, so I have to charge the buyer not the receiver.

Vangogh, in my first question I mean like "authorizing" the transaction, which actually puts that amount "on hold" in the card. The problem is that I haven't found a way of keeping that status for the amount of time I need.

Please let me know If you still don't understand the business model. I'll be mora than glad to explain it again.

Thanks all!!!

[Patrysha]

Isn't that illegal in the US? Or are you not in the US?

[vangogh]

Oh got'cha about having to charger the buyer and not the receiver. You did say it, but I missed it.

I'm not sure if this would work, but you can collect the buyer's credit card info and not actually process it right away. You could wait until you have word the item was received and then put the charge through. I have a simple billing application and it can do it so I know it can be done. You'd either have to manually put the charges through or have a system that keeps all the info on hold until you tell it to process the charge.

I would think you'd have to collect the info at the time of purchase otherwise you'll never get paid. Or at least a lot of people will skip out on payment.

You'll need a system to collect credit card info and won't actually send that info to your merchant account until you tell it to. You'll also need a way to confirm delivery. Ideally you'll set up a system that can automatically put through the charge once delivery is confirmed, though I suspect that would need to be custom work. It should all be possible, though.

[ahl]

HI Vangogh,

Thanks again! I guess that would be a great point for my business but implementing it will be a royal pain in the butt.
I could collect the credit card info beforehand but that does not guarantee that the charge will go through when I deliver the order.

I was researching in the Internet about those kind of insurance but haven't find nothing yet. I was thinking also in partnership with some collection agency as part as the business model but still thinking in pros and cons.

Lets see how it goes or if I can think in a different way of making my business unique.

Thanks All!

[vangogh]

I could collect the credit card info beforehand but that does not guarantee that the charge will go through when I deliver the order

True, but you run that risk whenever you take a credit card. There are fraud monitoring services where you can check the validity of a card before accepting it. At least with collecting the card beforehand you have the card info and a clear intent to pay on behalf of the buyer.