Pre-Authorized charges are a temporary holding of funds with a Credit Card Company. These funds must be part of the customer's available balance. If there is not enough available balance on the card to account for this request, the pre-auth will be declined.

If it is important for a customer to be able to pay for damages to equipment or rentals that are included as part of the activity and are expected to be returned in good shape, a pre-authorized charge is a great solution.'

In Practice:

A river tubing activity offers the option to "rent" tubes to customers. The customer pays $5 per tube to float the river. If they fail to return the tube or return it unusable, then they need cover the loss of the tube at $25.

A Super Administrator enables pre-authorization charges, sets the number of hours to 24 and the maximum amount to $150 (the maximum group size x $25).
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When a customer arrives and gets two tubes, a pre-auth of $50 is placed on their CC. If the customer checks their balance during this time, they'll see a pre-auth 'charge' of $50.
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If the customer returns the tubes in good shape, then a request to the CC issuer is automatically made at 24 hours from the original request time. That balance then becomes available again for the customer(see conditions below).

If the customer returns one of the tubes in bad condition, then an employee must add a "Damaged Tube" item to the order and then charges the existing card. The pre-authorized charge will be then replaced by the actual $25 charge.

After the request to release a pre-authorization hold has been sent, the Credit Card Issuer has the final say on the timing for the return of available funds. Delays could be due to business hours, weekends, or holidays.

Pre-Authorized Charges do appear on the customer's credit card statement while they are active. They will fall off the statement when the time expires (sometimes with delays) or when a charge is issued.

Pre-Authorized charges do not appear anywhere in Square. Square is only used to forward the pre-auth request to the customer's CC issuer.

Pre-Authorized charges will be used for any transaction that occurs on that card through Singenuity after the pre-auth request has been made. If a pre-auth is reserved for specific items on the order, make sure no other charges are taken with that card.

To learn how to enable pre-auth charges, go here:
​Enabling Pre-Authorized Charges