credit card: how much does the merchant pay?

[doreen]

@Starving_Artist

I’m curious as to why holds are put on debit cards for gasoline purchases at the pump. A woman of my acquaintance had her VISA debit card declined for a $15 store purchase even though she knew she had around sixty-something in her account. Turns out she had just bought $20 of gas at a 7-11 and VISA automatically put a $75 hold on her account. She found out about this when she called her bank the next day to find out what was wrong. She was also told that if she used her card inside the store rather than at the pump no hold would be put on her card. I can understand why putting a hold on a card for a certain amount would be a good idea for hotel rooms and rental cars where there may be reason for additional charges for damage or whatever after the fact, but $20 worth of gas is $20 worth of gas. So where’s the risk? And why does it not apply when paying at the counter? Anyone know?

When I pay at the pump, I swipe the card before pumping the gas. I could buy $20 worth of gas or $75 worth. No way to tell what the bill will be at the moment I swipe it, and if the authorization is for a lower amount that the final bill the actual charge may be declined - for example, the station authorizes $20, I pump $75 of gas, but my account only has $40
I haven’t paid inside in a long time, but to the best of my memory, when paying inside, you pay in advance for $X of gas. No need to authorize $75 if you know the charge is going to be $20.

[Starving_Artist]

I see now. Thanks for the answer. I just figured the pump would allow you to pump however much you wanted up to whatever your credit limit or account balance was. I didn’t realize things were so open-ended once you swiped your card.