What are credit card authorization forms?
Credit card authorization forms are used in many different situations when a merchant needs written proof that a cardholder consents to be charged for a good or service. This authorization can be a one-time payment but is typically used to authorize recurring payments. The authorization form also helps ensure that a cardholder has sufficient funds to pay for a good or service.
There are many different types of credit card authorization forms that serve different purposes. Read on for information on how credit card authorization forms work and how you can benefit from using one.
What is a credit card authorization form?
A credit card authorization form is a formal document signed by a cardholder giving a merchant permission to charge their credit card. Once the cardholder has signed, the merchant can charge the cardholder based on the terms of the document. An authorization form can be used one time or can authorize repeat payments.
For example, credit card authorization forms are frequently used to pay for a recurring service, such as rent, a cell phone plan, or a gym membership. Credit card authorization forms are also used in card-not-present transactions, allowing the purchaser to charge a third-party credit card such as a business credit card or a family member’s credit card.
In its most basic sense, a credit card authorization form provides written proof that the cardholder consents to the merchant charging their credit card.
There are different types of credit card authorization forms based on the type of business and transaction being made:
- Standard Credit Card Authorization form. This type of authorization form is universally accepted and can be used for various purchases.
- One-time credit card authorization payment form. This type of form specifies that the transaction is only to occur once. Because it is one-time only, the form is usually quicker and easier to fill out.
- Recurring payment credit card authorization. This type of form allows a merchant to charge a cardholder repeatedly. The form will detail the frequency and amount the merchant can charge the cardholder.
- Hotel credit card authorization. This authorization form usually applies when a hotel guest intends to pay with another person’s credit card. An authorization form may allow them to charge the room and other amenities to the card. For this form to work, a signature from the third-party cardholder is necessary.
- Airline credit card authorization. This type of authorization form is required when purchasing an airline ticket in paper form. This authorization form allows the passenger topay for their ticket or purchase a ticket on someone else’s behalf.
A credit card authorization may seem unnecessary in some cases, but it helps minimize the chances of fraud and reduces minor errors that can stop a transaction from going through.
How does a credit card authorization form work?
When you sign a credit card authorization form, especially for recurring payments, you agree to allow a merchant to keep your card information on file. This will enable them to process repeat transactions without obtaining permission each time. Credit card authorization forms can be stored digitally or using hard copies.
Credit card authorization forms are helpful for allowing transactions that don’t happen in person. Merchants can easily mail or email a copy of the authorization form for the cardholder to fill out and send back.
For a credit card authorization to work, the following elements need to be correctly filled out on the form:
- Cardholder information, including name and billing address
- Card number and card type
- Card expiration date
- Merchant name (some examples of credit card merchants)
- A statement authorizing the charge or charges
- Cardholder signature and date of signing
Depending on the type of authorization form, the following information may be listed as a requirement or optional inclusion:
- CVV code
- Cardholder phone number
- Merchant address and phone number
- Purchase amount
- Details of purchase
- Date of purchase
- Invoice or purchase order number
- Additional terms and conditions
A lot of information can be missed when drafting a credit card authorization form. However, credit card authorization forms are easy to fill out using an online template. This way, you ensure you don’t fail to include essential information.
What mistakes can occur, and how can you avoid them?
A lot can go wrong during a credit card transaction. For example, a business might charge a cardholder, with a credit card processing service, who might then inform their bank that the company was not authorized to do so. This can result in a chargeback. Chargebacks can be costly for businesses, so having authorization beforehand is a good idea.
In addition, credit card authorization forms can help with the following:
- Preventing fraud
- Preventing technical errors
- Creating a positive image for your business
- Building a strong relationship with consumers
- Processing payments more efficiently
Although it may not always be necessary, a credit card authorization form is a good line of defense to prevent needless complications and help businesses protect themselves. With the use of a free online template, you can create and fill out a well-drafted credit card authorization form in minutes.
