What Happens When You ‘Place Order'
A simplified look at the complications within the 2–3 seconds between ‘Place Order’ and ‘Order Confirmation’
Ever wondered what happens when you click (or tap) on the Place Order button on your favorite eCommerce site?
It feels like it’s a simple redirection to your preferred network (VISA/MasterCard/AMEX) and before you know it, boom! you’re being thanked for your order!
But a lot goes on behind the scenes to ensure what you want is locked to your name — before anyone else gets it. Let’s look at the most common steps that are involved in the process between ‘Place Order’ & ‘Order Confirmation’
Step 1: Payment verification & User verification
Depending upon the payment method chosen, your payment and your identity are vetted. The company needs to know if the details you’ve entered — whether it is the address of delivery or the card number — are correct. Essentially, they are doing a background check on your credentials to ensure you’re good for the money.
Technically speaking, the following checks are done:
1. The card details you’ve entered are verified by making a zero value transaction to check the authenticity of the card. You don’t get a message from your bank as there are no deductions, yet.
2. The address you’ve entered is checked with an AVS (Address Verification System) and if they have a fraud checking system, your email, phone number & device fingerprint (a string of characters that uniquely identify your computer/phone) are all looked up against known fraudulent information.
This step is critical for the next step. In eCommerce, the fulfillment of the promise — the item you want to purchase is yours for a fee — is sacred.
The fulfillment of the promise — the item you want to purchase is yours, for a fee — is sacred.
At no point should the inventory be locked-in by ghost orders by those the company won’t get any revenue. This step is taken to ensure just that.
Step 2: Inventory checking & lock
Once they decide that you’re good for the money, they attempt to put a soft lock on the inventory. This means no one else can buy the items you’ve staked your claim on.
Note that I said ‘attempt’. Your items may have been purchased by someone else during the time you were checking out and if they have no more stock to promise, they won’t proceed. You’ll be shown a message that some of the products ‘sold out’ while you were purchasing.
Now, this differs from retailer to retailer, platform to platform. Some retailers prefer to put a soft lock on the inventory from the cart step itself and give you a time-window (4–5 mins) to complete the checkout. This is risky, but for low-volume low-inventory-depth sites, it works.
Alternatively, they can break this step into two parts and move the inventory check to the first step.
Note that these things happen within a matter of half a second. High traffic websites like Amazon prefer to do these things intelligently — using customers’ historical behavior to create locks early on to ensure that their recurring users get a better experience.
Step 3: Order Creation
Now that they know you’re good for the payment and there is stock to promise, they create an order against your name. It captures your buying intent and you/they can follow up on your order, should your payment fail.
Technically, again, this differs depending upon the platform. Remember that creating the order is like denying other customers the stock you’ve ordered.
This means after a while, they’ll need to either follow up with you on the order OR release the stock so that someone else can make the payment. Some platforms prefer to create the order only after they’ve received the payment — ensuring they don’t have to do the regular checks on unpaid orders.
Shopify, for example, creates the order moment your intent to buy is captured. For small retailers this makes sense. Large retailers don’t like this as the infrastructure needed to manage and convert these err-ing customers is more expensive than the revenue recovered from them.
Step 4: Wait for payment confirmation
If you’ve used credit/debit cards or wallet to make the payment, you’ll be redirected to the payment gateway to complete your payment. From the retailers’ point of view, you are going to another site to make the payment, and since they cannot trust you to confirm that the payment has been made, they wait for that site (payment gateway) to tell them that the payment has been captured. They trust the payment gateway to tell them the truth, quickly.
This, in itself, is a quagmire of complications. You can make the payment and the gateway can forget to tell the site you’ve made the payment or the message can be lost! Sometimes, your bank might miss out on informing the gateway and they won’t know. Proper steps are taken to ensure that there are no drops in the communication between any of the involved parties and regular follow ups are done to ensure that you are not charged twice.
For post-payment methods, where the order is paid for only on delivery, this step is skipped.
Step 5: Send order to downstream systems
Now that they have confirmation that you have given them the money, they send the order to their downstream systems, which will begin processing your order. And while they’re doing that, they’ll show you a Thank you page.
You’ll also get an order confirmation mail from them of your purchase.
And that’s it! What feels like 2–3 sec is a long list of decisions that the system is taking to ensure you get the products that you want.
But that is the beauty of technology — elegant designs and smooth transitions hide the complicated array of decisions that the systems are taking to make your memory of the checkout seamless.
Thank you for reading. This is the first article in the new series I’m writing on ‘What Happens When’ that simplifies complicated technology.