Reservations with Tokenized Cards Soon to Require Pre-Authorization Workflow

No doubt the past 14 months has pushed the hospitality industry to the bleeding edge in creating innovative ways to market and effectively manage guest visitation during the COVID-19 pandemic. From shuttering indoor tastings to introducing the idea of requirement reservations has been hard on all types and sizes of tasting rooms.

What has accelerated the most, besides the requirement of reservations to visit, is the idea of pre-paid reservations, something that CellarPass has been recommending for over 11 years now. Some guest management platforms force you to pre-charge, while others give you the flexibility to assign unique deposit policies on an event level.

As our platform has evolved over the last two years and more of our subscribers have opted to collect a card and perhaps charge later, payment systems and credit card processing in general has also evolved to a large extent. We not only need to significantly re-write many of the integrations we had with our existing partners, but going forward we had to continue to improve our levels of security, privacy and data management.

When we launched CellarPass v3 just over a year ago, our main mission was to introduce tokenization of credit cards, placing the ownership of raw credit card data on your processor, than storing the full card data in CellarPass. We’re still shocked that many craft beverage industry platforms, like WineDirect, still do not tokenize credit cards. That’s a massive risk, just waiting for a data breach to happen- and a totally unnecessary one at that as credit card tokenization technology has been around for over five years now.

As the payment systems have evolved, they have introduced their own new methods of better handling security and more detailed descriptions as to why a credit card failed, declined or approved. And payment gateways are not created equally. There’s some like Braintree Payments and Stripe that are much further ahead than others that have been slower to adopt new technologies such as WorldPay and USAePay. We would never recommend any of our customers to use either of these. At the end of the day, like most services, you ultimately get what you pay for when it comes to customer service, security and staying ahead of the technology curves.

To stay ahead of our competitors, we greatly rely on our payment processors evolution because we ultimately need them to provide us the capability to tap into, to then deliver more capability to our subscribers. It’s why today, we’re officially announcing that CellarPass will begin sending pre-authorization requests for all transactions where a credit card is required at time of booking, but is charged at a later today. This temporary pre-authorization lasts normally around 48-72 hours, but provides you the confidence at the time that the credit card is in good standing, has the available credit line and the AVS information is accurate. Doing so of course doesn’t guarantee that the credit line will be available when you go to charge at a later date, but it does confirm that the credit card number has not been reported stolen and the customer contact information matches what is stored on file with the credit card company.

Sure, there will be a small percentage of those cards stored with the reservation that will fail later on when you go to collect the funds, but with a couple of slight changes to your deposit policy, you can bring that number down to next to zero. CellarPass provides over a dozen flexible deposit policies. We strongly recommend using either of the following: Charge 48 hours, or 24 hours or even the morning of. That way a card is collected at time of booking, is pre-authorized, tokenized and then the payment is collected before the guest’s arrival. Any of the last remaining unpaid ones, can be followed up on by one of your team members by phoning the guest or waiting for the guest to arrive.

Of course, with every change in policy, there’s some downsides that you will have to consider when you make the decision to collect a card at time of booking. For those properties that have higher tasting fees, this will increase customer feedback as authorizations do indeed place a temporary hold on those funds.

 

When Will Pre-Authorization Be Required?

Just as you have to make business decisions on how you handle customer service, CellarPass as both a technology and service company we have to way the risks of continuing to not pre-authorize cards against the major benefits of making sure all cards collected are indeed valid, have the available credit line and have not been reported stolen. We spent months internally carefully considering this change, it’s potential impacts to your business and options you have to offset the possible side effects.

To test the waters, we launched our new CellarPass PLUS plan, that offers a lower monthly fee and passes our service fees onto your guests as they book. Their credit card is immediately pre-authorized, charged and then the funds are deposited into your account within a day or two. The response to this plan has been well received and was one of our KPIs on when to introduce pre-authorizations to our reservation booking engines.

For subscribers that are on our Pro, Professional, TablePro or Enterprise Plans, we will be requiring pre-authorizations on the following deposit policies:

Comp'd with Min. Purchase- Require CC

Collect from Guest- Require CC

Auto-charge 48 Hours Prior- Require CC

Auto-charge 24 Hours Prior- Require CC

Auto-charge Upon Arrival Date (AM)- Require CC

With the innovation and evolution of the payment industry, new payment types such as Google Pay and Apple Pay have been introduced. We'll be making announcements later this year on how you can begin accepting these forms of payments for transactions placed through CellarPass, so stay tuned.