I used my debit card at a restaurant. I’ll use round numbers to make this easier.
Total for the meal: $20
Tip: $5
Total: $25.
When I check my pending transactions at the bank, the tip is doubled so it shows a pending transaction for $30. This always happens when I tip on my debit card. When it posts, it is the correct amount - but why the double tip while it is pending? Does this mean that if (God forbid) I only had $27 in my account it wouldn’t go through? I know they’d run only the $20 first and then they run the $5 after I’ve filled it in - so the $20 would be fine but when they add that $5, would I be over or would they be told that I am over?
Anyone else experience this and/or know why it happens?
The only reason to authorize is so they don’t get stiffed. They authorize the amount + 50% (in this case) when you first give them the card and that ensures you have enough money in the account for the maximum tip. When they give you back the receipt for tip and signature, you fill in the actual tip amount, and they do an actual charge for the real total.
Why do they do it this way? I’d say mainly because people with credit cards just don’t care. When your limit is measured in the thousands, half the cost of a meal is very unlikely to put you over it. And you also don’t bother looking at the authorizations very closely. People with debit cards tend to be much closer to the limit, so they pay actual attention to it.
Also, I doubt they could run the card thru for two separate transaction (meal and tip) without you signing it twice. Which no one could accept.
Wait, this doesn’t seem to make sense to me. I must be missing something.
When I say that they double the tip, I mean they double the tip to the penny. Say my meal was $20 and I tipped $4.87. I would see a pending charged of $29.74. Now, I just have a very difficult time imagining that they pulled that out of thin air.
Plus, if they only ran the card through once with the larger amount (which they ran through to make sure you could cover the tip) - then why does the slip you sign show the exact amount?
I appreciate that you took time to answer my question, SmackFu, but your response doesn’t seem to make sense to me. Perhaps I am missing something?
Around here you have to pay for gas before you pump. What they (gas stations) do w/ CC’s is authorize for $50 then only process the actual amount. I know this because when my wife lost her cards I had to review pending charges and there was one for a fillup of $50 which actually came to $15. I called the station and they said they didn’t process it yetl. When it went through it was $15.
It looks like if the total is unknown then they use a higher amount.
Also I have noticed a disturbing trend in resturaunts - but only so far in the type that you go to the register to pay (as opposed to the water doing that). They ask you the tip amount before they will process it and add it to the total.
Wow, haven’t been asked for a tip amount before processing my card - that would throw me for a loop.
Thanks for the responses. I don’t tip to the penny but let’s say my check has come to $8.23 - and I tip $1.77 (You know, just to get to that nice round $10 figure) - that’s how I noticed the tip was doubled to the penny. I don’t stick with a percentage.
Also, this only happens when I do leave a tip by card. Sometimes I pay with my debit but leave a cash tip - then there isn’t a problem. So it’s got to be something else that’s going on - I just can’t figure out what/why.
Here most of the gas stations have the pay-at-the-pump option, which is GREAT. I always see the authorizations for just $1.00 when I happen to check. Sometimes, though, I don’t pay at the pump because I also want to purchase something inside. If that’s the case, there are two options. If the gas station doesn’t force you to pay first, I fill up, go in, get what I want, and then pay. If they insist one pays first, they don’t pre-authorize anything – they just want to hold onto your card. Personally, I don’t let them and then I go someplace else, and I boycott forever any place that insists I pay before pumping (even if they offer pay at the pump).
The authorizations I have seen have all been for about a buck.
For example, 2 days ago, I decided to pay my Sprint bill online. $53 bucks. When I checked pending, there were 2 Sprint pending transactions. One for the $53 and another for $1.01. I’ve called Sprint about this before and was told they always send out a $1.01 amount before taking out the actual amount. The $1.01 stays in pending and never posts.
Pending charges will eventually time-out and drop away. Three days is common.
I was on business in Las Vegas once and traveling on my bank checking account debit card as I didn’t have a credit card. The front-desk insisted on an an imprint of my card - I assumed in case I stole the bath towels. The next day, I got a call from my wife, the checking account was empty.
I checked the bank and the hotel had pre-authorized $600 against my debit card. This is a pending transaction as far as the bank is concerned and that money in my account is not available for silly little things like gas and groceries. I went to the front desk and they explained that that they routinely authorized $150/night per visitor for expected gambling debts. A lot of arguing and I got them to cancel the authorization. It took about 24 hours for the money to “reappear” in my checking balance.
Lesson - when they ask for a credit imprint in Las Vegas - ask why.
[puts on the “fraud analyst of a credit card issuer” hat]
Most restaurants/hotels/car rental agencies “over-authorize” on accounts. It’s their way of making sure there are funds available to cover possible future charges. The amount on the receipt you sign is what actually bills to the account.
For charges you don’t sign for, such as pay at the pump gas and online charges, a “test” authorization, usually a dollar is done. It’s the merchant’s way of making sure the account is open, valid and has available funds.
[hijack] One sign of a stolen credit card is pay at the pump gas authorizations. Perp gets the card and swipes it. If it tells them to “begin fueling”, they know the account hasn’t been closed yet.[/hijack]
I think the crooks buy some gas. When I got a new CC I used it 1st at a pay at the pump which worked then somewhere else where it was denyed. Called the CC co and they told me that pay at the pump for a 1st time use flags the account.