How to take deposit?

A step-by-step guide about how to take deposit payments from customers.

Table of contents:

• What is deposit payment?
• How to take deposit payment?

What is deposit payment?

In financial terms, a deposit typically refers to a sum of money paid upfront as part of a total payment agreement at the beginning of a sales process in order to secure the sale. The deposit acts as a commitment to a future service or product purchase.

In various contexts, like renting property, hiring services, or making large purchases, a deposit serves as a security measure, ensuring both parties' commitment to the transaction.

The deposit is usually a portion of the total cost and may be refundable under certain conditions.

How to take deposit payment?

To take deposit, you can use 4 different approaches:

1. Subscription model
2. Manual invoicing with 'Save card' payment form
3. Manual invoicing with one-time payment form
4. Authorize but don't capture

#1 Subscription-based payment model for taking deposit

With this approach, you can set up a subscription with an initial higher charge for the deposit and a lower recurring charge for subsequent payments.

Traditionally, subscriptions involve regular payments of the same amount. However, this model can be adjusted for scenarios where an initial deposit is required, followed by a smaller, second payment. This approach is particularly useful for services or products that need a front-loaded payment structure.

Subscription model will ensure automatic handling of both the deposit and the follow-up payments.

To implement this:

• You'll set up a subscription with a higher first payment (acting as the deposit).
• Then, adjust the subscription to charge a lower amount for subsequent payments.

#2 Manual invoicing with 'Save card' payment form

This method offers a mix of automation and manual process to take deposit.

By using WP Full Pay's 'Save Card' form, you can securely save customers' card details after their initial deposit. This sets the stage for the second part of the payment process - manual invoicing.

Here is how it works:

• You process the initial deposit and saved the customer's card details. These details will help make the next transaction.
• When it's time for the second payment, you'll manually create and send out an invoice, using the saved card details for a quick and secure payment process.
• You can generate an invoice directly within the Stripe dashboard, utilizing the previously saved card information.

This method is especially useful when the amount for the second payment might change, or if there are certain conditions that need to be met before you can process this payment.

#3 Manual invoicing with one-time payment form

WP Full Pay's one-time payment forms are typically used for one-off purchases, where you charge the customer once for a product or service.

However, you can effectively utilize the one-time payment form to take an initial deposit.

Here is how it works:

• Initially, you set up the one-time payment form to collect a specific deposit amount for a product or service. This transaction is processed once and does not recur.
• After the deposit is collected, you can then follow up with a manual invoice for the remaining amount, which can be created directly in the Stripe dashboard.

This method allows you to securely collect a deposit while retaining the flexibility to customize the final payment according to the specific terms of the service or product you provide.

#4 Authorization without capture for deposits

Another effective way to handle deposits is the 'authorization without capture' method. This Stripe feature allows you to place a hold on the customer's card for the deposit amount without charging right away.

Here is how 'authorize but don't capture' works:

• When a customer agrees to a service, you authorize their card for the required deposit amount.
• The funds are reserved but not taken from the customer's account.
• After the service is completed or the product is returned in good condition, you can then capture the payment, or release the hold if no further charges are needed.

This method suits high-value transactions, like car rentals, where you might only need to capture the amount if specific conditions aren't met.

To set up an "authorization without capture" for deposits in Stripe, follow these steps:

1. Access your Stripe account.
2. Go to the 'Payments' section and create a new PaymentIntent.
3. Set authorize only. While setting up the PaymentIntent, choose the 'Manual' capture method. This tells Stripe to authorize the payment amount without capturing it immediately.
4. Process the customer's card for the deposit amount. The funds will be held but not withdrawn.
5. If you need to capture the deposit, you can do so before the authorization expires (typically 7 days). If not, the hold will be released automatically.