--- title: Why You Shouldn’t Charge an Authorization Hold After 7 Days description: Authorizing credit cards and shipping goods after seven days or more? You could face chargebacks and lose by default. image: https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/authorization-hold-credit-card.svg --- [tel:1-800-601-0230](tel:1-800-601-0230) 800-601-0230 - Features - Solutions - Developers - [Pricing](https://www.payjunction.com/payments/pricing.html) - Resources [See a Demo](https://www2.payjunction.com/tour-payjunction) Features - EXPLORE PRODUCTS [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) - ACCEPT PAYMENTS [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH Electronic Checks](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - EXPLORE CAPABILITIES [Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integration Marketplace](https://integrations.payjunction.com/) [Remote Signature](https://www.payjunction.com/payments/signature-capture.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) Solutions - [Veterinary Streamline payment workflows and get paid faster with up-front deposits and payment schedules for high-cost procedures. 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While some fulfill a transaction exchange at the moment of purchase, others may take days to provide the product or service purchased. In this case, a [credit card authorization](https://blog.payjunction.com/credit-card-authorization) would ensure that the customer has the funds before you provide your end of the transaction. To ensure that the customer isn’t charged until your end of the transaction is complete, you can place a hold on the authorization. Easy, right? It is, but if you charge an authorization too far after the initial hold, you could face a chargeback. This could result in no payment for your product or service and additional losses in chargeback fees. Before we get into why a chargeback can occur, let’s recap how credit card authorization works. ## Payment Processing Demo Schedule 15 minutes with a payments expert Get a customized PayJunction product walk-through Understand requirements and pricing Determine your SAVINGS! GET DEMO NOW ## A Refresher on Credit Card Authorization No matter what the transaction method (EMV, swiped or keyed-in), every transaction goes through a [six-step authorization process](https://blog.payjunction.com/understanding-credit-card-authorization/) that ultimately approves or rejects the credit card. If approved, the transaction can be put on a credit card hold or have it settled along with other transactions that will be deposited into your bank account. For a business that needs a few days to get an online order packed and shipped, an authorization hold is the perfect solution to keep customers at ease. But charging a credit card hold too many days after authorization can incite authorization-related chargebacks. ## Authorization Hold Results in Chargebacks Similar to [bank-initiated chargebacks](https://blog.payjunction.com/credit-card-chargeback-banks/), authorization-related chargebacks are initiated when a transaction is not completed within the guidelines defined by the card issuer (Visa, MasterCard, Discover or Amex). Although these recommendations differ slightly from issuer to issuer, it’s recommended to avoid charging a credit card hold on day seven or later. MasterCard’s [chargeback guide](https://www.mastercard.us/en-us/about-mastercard/what-we-do/rules.html) has an entire section dedicated to authorization-related chargebacks and states that “the issuer may submit an authorization-related chargeback when the authorization chargeback protection time period had expired for the presentment (meaning seven days for final or undefined authorizations and 30 days for preauthorizations) and one of the following: - For a transaction occurring at a merchant located in the Europe Region, the account was permanently closed before the chargeback was processed. - For a transaction occurring at a merchant located in any other region, the issuer deemed the account not to be in good standing (a “statused” account) before filing the chargeback. Amex provides a specific reason code in its [Chargeback Code Guide](https://www.americanexpress.com/content/dam/amex/au/en/merchant/static/chargebackcodeguide.pdf) for a lengthy authorization hold: Reason code 4521. The merchant submitted a transaction for payment, but the authorization for the transaction has exceeded seven days. The [Visa Chargeback Management Guide](https://usa.visa.com/dam/VCOM/download/merchants/chargeback-management-guidelines-for-visa-merchants.pdf) notes that “when you hold transactions beyond the period defined in your merchant agreement (usually one to five days), you lose money, affect customer service (cardholders expect to see transactions on their Visa statements within the same or next monthly cycle), and possibly invite a chargeback.” It’s important to follow the card brand guides so that you don’t get hit with avoidable chargebacks. You can also partner with a Merchant Account Provider that has your best interests in mind. Some [Virtual Terminals](https://blog.payjunction.com/virtual-terminal-credit-card-processing) are programmed to automatically [void held transactions on the seventh day](https://support.payjunction.com/hc/en-us/articles/212532298-How-long-are-funds-guaranteed-for-how-long-can-I-keep-a-transaction-on-hold-). Though this process will force you to rerun the transaction, it protects your business from losses and chargebacks that you would automatically lose. ## Learn about bank chargebacks. [![AND HOW TO AVOID THEM](https://no-cache.hubspot.com/cta/default/635739/b3eaafbf-c8d0-4016-965e-7d759d28a0d8.png)](https://cta-redirect.hubspot.com/cta/redirect/635739/b3eaafbf-c8d0-4016-965e-7d759d28a0d8) Have you ever dealt with an authorization-related chargeback? Tell us your story below! [Business Tips](https://blog.payjunction.com/topic/business-tips) --- ##### [![Unethical Software Providers Penalize You for Using Other Merchant Account Providers](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/software-providers-unethical.svg) Unethical Software Providers Penalize You for Using Other Merchant Account Providers](https://blog.payjunction.com/software-providers-unethical) ##### [![Payment-Related Car Dealership Laws Every Dealer Should Know](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/car-dealership-laws.svg) Payment-Related Car Dealership Laws Every Dealer Should Know](https://blog.payjunction.com/car-dealership-laws) ###### About Author ![Picture of Ursula Librizzi](https://blog.payjunction.com/hs-fs/hubfs/Ursula_Librizzi.jpg?width=200&height=200&name=Ursula_Librizzi.jpg) ### Ursula Librizzi Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaises between the sales and marketing departments. ###### Related Posts ## [![Why You Should Avoid Annual Billing](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/annual-billing-avoid.svg) Why You Should Avoid Annual Billing If your business deals with recurring payments for prescriptions, memberships and subscriptions, you may be tempted to practice annual billing. This is when you charge your customer up front for a year’s worth of services or goods.](https://blog.payjunction.com/annual-billing-avoid) ## [![Credit Card Processors vs. Merchant Service Providers](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/credit-card-processors.svg) Credit Card Processors vs. Merchant Service Providers It’s very likely you looked at the title of this post and thought, “Those are different?” The general public uses these terms interchangeably, and without extensive knowledge of the payments industry, it makes sense to do so.](https://blog.payjunction.com/credit-card-processors) ## [![Understanding Credit Card Authorization](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/understanding-credit-card-authorization.svg) Understanding Credit Card Authorization Cardholders ultimately give businesses credit card authorization to request funds from their accounts. Authorization requests start when cardholders key in, swipe or insert their debit or credit cards through traditional credit card readers or Virtual Terminals. After waiting three to 22 seconds, depending on the business’s card reader speed, the transaction will either be approved or declined.](https://blog.payjunction.com/understanding-credit-card-authorization) ## Meet a Payment System You’ll Love - ###### FEATURES [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) - [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) [Remote Signatures](https://www.payjunction.com/payments/signature-capture.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) - ###### RESOURCES [Product Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integrations](https://integrations.payjunction.com/) [Blog](https://blog.payjunction.com/) [Guides](https://guides.payjunction.com/) [Support](https://support.payjunction.com/) [Service Status](https://status.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) - [Trust Center](https://trust.payjunction.com/) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [Pricing](https://www.payjunction.com/payments/pricing.html) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) - ###### RESOURCES [Integrations](https://integrations.payjunction.com/) [Guides](https://guides.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) [Trust Center](https://trust.payjunction.com/) [Service Status](https://status.payjunction.com/) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) ##### 800-601-0230 SIGN UP FOR OUR NEWSLETTER  Become a better advocate for your business. 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