Transaction types

When you semi-integrate your point of sale (POS) system with Clover devices, merchants can complete different types of customer transactions using these devices.

Example:

• At full service restaurants, merchants can charge customers first for the bill amount and then for the tip amount even after the customer's credit card is charged.
• At retail stores, tips are not expected.
• At hotels, merchants can place a hold on a customer payment method—a physical card or digital wallet—during check-in and then update the transaction with necessary charges during checkout.

Clover provides three types of transactions on integrated Clover devices to support various merchant needs: sale, auth, and pre-auth.

Sale

A sale is a customer transaction where the purchase amount is authorized and settled simultaneously. Adding a tip amount is permitted only before the transaction is authorized and settled. If a sale is not voided within 25 minutes, the merchant funding process begins for this sale. At this point, the merchant can still refund the customer.

Businesses, where sale transactions occur, include:

• Quick service restaurants, where customers select a tip amount before completing the transaction with a payment.
• Retail stores, where tips are not expected.

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NOTE

A sale transaction may come back as a tip-adjustable auth, depending on the payment gateway. Check the payment response state and type to confirm.

Auth

An auth is a customer transaction where the purchase amount is authorized and then tip-adjusted even after the transaction is authorized. Tip adjustment does not require the customer's payment method—a physical card or digital wallet—to interact with the Clover device for a second time.

The merchant funding process for the day begins at closeout when the auth, or batch of auth transactions, is settled. Before an auth is settled, there is no limit to how many times a merchant can adjust the tip amount on a Clover device.
An example of a business where auth transactions occur is a full service restaurant. Customers can use a credit card to authorize an initial value and then add a tip amount to the receipt after the card is charged.

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NOTE

Rules for tip adjustments:

• Most recent tip adjustment overrides all previous adjustment amounts. Tip adjustments are not summed.
• Clover does not place a limit on tip adjustment amounts. However, if merchants tip adjust amounts more than 20% of the bill, funds are not guaranteed subject to the rules set by card schemes, such as MastercardⓇ and VisaⓇ and electronic payment associations.

Closeout to finalize auth transactions

Closeout is finalizing a batch of auth transactions, including tips, or captured pre-auth transactions, and then starting the merchant funding process. Clover merchants are set up for automatic or manual closeout during the boarding process, depending on the merchant's region.

Pre-auth (US only)

A pre-auth is a customer transaction where the merchant can validate that a given amount is available on the customer payment method—a physical card or digital wallet—and then place a hold for that amount. This amount is deducted from the customer account—credit limit or bank balance—but not yet transferred to the merchant.

Once the merchant captures a pre-auth amount, the transaction continues as an auth transaction governed by the same auth transaction rules.

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IMPORTANT

For the merchant to be funded, the pre-auth amounts must be captured before closeout. See Closeout.

Businesses, where pre-auth transactions occur, include:

• Hotels, where a hold is placed on a customer's credit card during check-in and may be adjusted at checkout for incidental damages and in-room charges.
• Car rental agencies, where a hold is placed on a customer credit card at vehicle hand-off and may be adjusted for incidental damages, late return of the vehicle, or failure to refuel.

Capture pre-auth amounts

Merchants must capture pre-auth amounts to have funds transferred to their accounts. There are two important cases for capturing pre-auth amounts:

• Capture a part of the pre-auth amount—When a merchant captures a part of the pre-auth amount, the remaining amount is credited back to the customer account. Example: For a $300 pre-auth transaction, if a merchant captures $180, the remaining $120 is credited back to the customer account.
• Capture more than the pre-auth amount—When a merchant captures a pre-auth amount greater than the original amount, funds are not guaranteed due to insufficient funds in the customer account.
• Capture more than 20% of the original amount—Additionally, if the merchant captures pre-auth amounts more than 20% of the original amount, funds are not guaranteed subject to the rules set by card schemes, such as Mastercard and Visa, and electronic payment associations.

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NOTE

Merchants can void a pre-auth transaction to release the funds held from a customer account.

Pre-auth transaction time limits

Card networks limit the time during which a pre-auth can be captured.

• If a customer uses a debit card for a pre-auth transaction, the transaction may become invalid when it is not captured between 1–8 business days, depending on the specific card network's policy. Specific merchants, such as car rental agencies, should avoid accepting debit cards since the pre-auth hold can expire before the transaction is captured and settled.
• If a customer uses a credit card, the transaction may be held for 30 days, depending on the card network's policy.

Partial payments (US and Canada)

A transaction request may return a partial payment when the customer's card has insufficient funds to complete the transaction. The POS must examine the payment response and confirm if an issues.partialPayment object was returned. If a partial payment occurs, the POS must notify the merchant and then provide either or both of the following options:

• Accept the partial payment and start a second transaction to pay the remaining balance with a different card or other form of payment.
• Void the original transaction and allow the customer to pay for the whole order with a different card or other form of payment.