This is a question we get asked a lot here at Rotessa: 'What if a mistake is made on my pre-authorized debit and the payment is returned?'
It's a fair question, and has a (thankfully) simple answer. Read on to see how easy pre-authorized debits are, even when a mistake is made.
Incorrect Customer Information
If you pre-authorized debit is rejected because your customer provided incorrect bank account information, your payment provider will return the transaction and notify you of the issue. Often this happens as early as the same day. To fix this, all you need to do is get the correct information from your customer in order to process the transaction.
Non-Sufficient Funds in Customer's Account
If the customer’s financial institution (bank) can’t withdraw your transaction from your customer’s account because there isn’t enough money in the account, the customer’s financial institution will return that transaction to you by the next business day. Once this happens, you can contact your customer to ensure that money will be available and try the transaction again.
Payment is Returned
A payment return can be initiated at the request of either you or your customer. For instance, if you or your customer discovers a mistake with the transaction, you can ask your financial institution to recall the transaction if it hasn’t been posted to the customer’s account. You can also try to issue an error correction, provided that you contact the financial institution or the third party payment provider within the timeframe outlined in your agreements.
While mistakes do sometimes happen, the good news is that they're easy to fix with pre-authorized debits! Unlike mistakes with other payments methods like cheques, fixing pre-authorized debit mistakes doesn't require running around and getting new cheques or spending time at your bank. Just a quick phone call and a few clicks, and you'll be back in business.