Posts Tagged ‘preauthorization’

Like many people, I have a love/hate relationship with bars and restaurants that allow you to open a credit card tab. Why? I’m one of those people who sets out to have a “couple of drinks,” but “just one more” always sounds like a good idea.

Handing over my credit card each time I buy a drink is sobering, especially when drinks can cost more than $12 a pop. It’s much easier just to start a credit card tab and face the music when the statement comes.

Lately, I’ve encountered a credit card tab buzz kill, which is credit card pre-authorization. Bartenders have requested that I sign for as much as a $50 pre-authorized charge on my credit card. Now, I understand that they want to protect themselves from customers who open tabs and then skip out without paying their bills. Unfortunately, this forces me to face the harsh reality that I will probably be spending (and drinking) more than I intended.

With the slumping economy, bars and restaurants are experiencing more deadbeat customers than usual. Bartenders who start credit card tabs without making sure the credit card is good may get left without a tip or, worse, may be forced to pay for a customer’s drinks. Credit card pre-authorization is their only line of defense.

Customers need to be alert, too. There are unscrupulous people (who may work at bars and restaurants) who are not above adding an extra gratuity to a credit card tab receipt that wasn’t correctly filled out or leaving the pre-authorized amount on a patron’s card even though the patron didn’t spend that much.

Also, leaving your credit card after a long night of fun is a perfect opportunity for a criminal—someone with access and opportunity—to steal your credit card information. As it so happens the US Justice Department notes individuals between 18 and 24 are the most likely to experience identity theft.

Some patrons, who have had too many beers, may forget to close their tabs and pick up their credit cards at the end of the night. Restaurants typically lock those credit cards in a safe and make the customers settle the tab when they come to retrieve their credit cards. Some establishments, however, are now automatically charging a fee for this service.

For better or worse, credit card pre-authorization for bar tabs is here to stay. It’s a good business practice for the establishment and provides a safety net for its employees.

As a patron, stay sober enough to make sure you’re not being unfairly charged. If pre-authorization is too much of a downer for you, grab some friends and relax with friends and a bottle of wine at home.

Lindsay Woodland

Today, I filled up at the same station with a different credit card. There was no $60 limit. So maybe it was the combination of that particular gas station and my bank. This will go unsolved for now.

Along the same lines, a gas station owner in West Virginia has ceased taking most credit cards. The credit card surcharges are costing his business $1 for every $50 that is spent. It seems this would mean fewer customers, and fewer customers mean less business. So do gas stations make so little off of gas, that this is a reasonable option? Apparently so. They make most of their profits off of what is sold in-store.

When getting gas, I always use my bank card at the pump. Over the past few weeks, I’ve gradually accepted the rising prices as a cost for loving my gas-devouring beast. However something new happened the other day—the pump stopped at $60 flat. My tank wasn’t full, and I wasn’t able to milk anymore gas from that transaction. I decided to look into it.

Who did it

There are three suspects for why the pump stopped when it did.

Me. This could be my fault if my account was empty. But it wasn’t (at that moment, anyway), so I ruled this out.

Wells Fargo. In the almost 10 years I’ve used Wells Fargo, this has never happened. What’s more, the week prior I paid over $65 at another station.

The station. This was my first time at this station, so I have no experience to compare. Therefore, rightly or wrongly, it’s getting the blame.

Before these charges can stick, I need more evidence. So I turn to a very accurate and trusted resource: The internet.

I immediately stumbled onto City-Data.com, a site that collects and analyzes data about US cities. Oddly, the forum posting that was the most useful mainly discussed gas in the UK. But hidden in the petrol talk was the snippet that solves it all:

The gas station owners have to find a middle ground between how much people usually get and how much they can put a hold on those funds in the account. When you swipe your [debit] card neither the station or your bank knows how much you are going to spend, so they put a “hold” on a set amount of funds in your account. If they set it too high, and there isn’t enough to cover it, the card will be denied and the pump will not authorize and turn on. Most lately have been set at $50 or $75. Generally enough for average sized tanks and not too big of an amount that the [debit] card will not work.

Thanks Bydand.

At peace

Credit cards don’t have this issue. Also, depending on the program, many credit cards feature rewards or cash back programs for filling up. I use a Discover Open Road credit card that offers cash back on gas and maintenance on my ever-hospitalize Jeep. This, or other gas cards,can help the hurt.

But as traumatizing as my weekly 17 gallons are, at least I don’t have the 26 gallon Escalade, the 32 gallon H2 Hummer, or the (gulp) 40 gallon Suburban.