Stations Put Holds On Your Money

Stations Put Holds On Your Money, This happen to me twice so far. This is just wrong, I don't even know how they can do this.

http://www.newsnet5.com/consumerspec...98/detail.html

When it’s time to pay for gas, many people opt for the quick convenience of a debit card.

But as On Your Side Consumer Specialist Angie Lau reported, it can leave your bank account running on empty.

Lau spoke to consumer advocate Linda Sherry, who said that when you pay with a debit card, gas stations often ask the bank to place a freeze or block on your account for $5 – 10 more than the cost of your gas.

Sometimes, stations even put a freeze on as much as $75.

According to Sherry, this could have steep consequences for consumers. “This could put them into the ability to bounce a check and if it caused a bunch of checks to bounce, you could be out a $100.”

There is no law limiting how long a hold can last. Most holds, according to Sherry, are taken off the same day, once the transaction is processed. But sometimes it can take several days.

"You'll never hear or see a sign at a station that tells you this is happening," Sherry said.

So why do gas stations block your access to your own money? They said that when you use a debit card, they have no idea how much you are going to pump. So, companies use an estimate and block that amount of money.

Sherry said that hotels and rental car companies also use blocks on debit card purchases, but that most people don’t know that gas stations use holds as well.
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http://www.metafilter.com/42899/Gas-...ard-OVERcharge

Quote:
Never use a debit card to pay at the pump: "Each day millions of Americans use their debit card at gas stations to "pay at the pump." What you probably do not know is gas stations have the right to overcharge you a certain amount to ensure they get their money. Each gas station decides how much to overcharge and hold on your account. Some put a $75 or $100 hold on the account while others only hold $5 or $10. But, these stations also decide how long to hold that money. Some hold the money for up to three days. . ." How is this even legal? Am I the last schmuck in the U.S. to find out about this? I just found out that Sam's Club (for example) charges $50 and deposits your change three days later.
posted by spock

Is that what that means? Sometimes I use the telephone teller at my bank to balance my book more often than the once a month a paper statement comes out (sometimes I have to pinch a penny hard enough to hope it breaks into two pennies!). When I call~ I used to get the "balance"~ now I'm also offered the "available balance" which is almost always a lower number than the "balance".

Generally, PIN-based debit transactions aren't problematic, as the transaction is processed immediately as an ACH debit.

However, when the transaction is processed as a credit card, the gas stations are presented with a unique problem as the amount of purchase is not known at the time the card is swiped. To protect themselves, many gas stations obtain a temporary authorization for a predetermined amount. This places a hold on that amount of the consumer's credit line. This ensures that the merchant is able to be paid when it comes time for the consumer's bank to settle the transaction.

Authorization holds disappear one of two ways- when the transaction is settled, or in accordance with your bank's policy (typically 1-3 days), whichever comes first. The gas station doesn't directly determine how many days the hold stays. Once they submit that day's batch for processing, it's out of their hands entirely.

The hospitality industry makes use of this as well. For example, when you dine at a restaurant and pay at the table, the server typically does not now the actual amount of the transaction (to include tip) at the time your card is processed. As such, many restaurants have their terminals set up to obtain a temporary authorization for your bill plus 20%.

Hotels, on the other hand, make use of temporary authorizations for a known, rather than an unknown, amount. As an example, if you're staying at a hotel that has a rate of $100 per night and reserve the room for two nights, the hotel obtains a temporary authorization for $200 to ensure that those funds are available at the time you check out and the transaction is actually processed.

Originally Posted by Cheryl Marchek AKA JM

Is that what that means? Sometimes I use the telephone teller at my bank to balance my book more often than the once a month a paper statement comes out (sometimes I have to pinch a penny hard enough to hope it breaks into two pennies!). When I call~ I used to get the "balance"~ now I'm also offered the "available balance" which is almost always a lower number than the "balance".

Your balance is the amount of funds actually in your account at the moment, and the available balance is the balance minus the pending transactions.

For example, let's say you have $1,000 in your account. While looking at the Bean Farm website, you see a 36" showcase cage priced at $299 that you just have to have, so you pay with a Visa or MC branded debit card. As the transaction is not PIN based, it's treated like a credit card transaction. They obtain authorization to charge you the $299, which immediately reduces your available balance to $701. However, your balance is actually still $1,000 because that money hasn't gone anywhere just yet. It doesn't leave your account until they first submit their batch of transactions for processing and the bank subsequently settles the transaction.

This happens often for online purchases that end up not going through ( they dont like your card, or you have to resubmit the order again before it really goes through) Ive had this happen when i was trying to order something online, and just tried to go through with the transaction a few more times. Each time the amount the purchase was going to be made for, showed up in my account and was held for a few days before being released

its a pain, but im pretty sure its perfectly legal.

Calling something legal sure dont make it right.

I used to use my debit card all the time for gas. Until about 2 weeks ago when the gas station charged me $20 for gas and then held another $100 for 3 days. They use to hold $1.

If my neighbor took $100 without my consent they would call it theft. Even if they were planning on returning it later. I dont see this being any different.

I have since stopped going to that gas station chain and found another that doesnt ask for a PIN number when using my debit card. And imagine that, they only hold $1.

It really does depend on the station and the financial institution. You can always ask your specific Financial istitution how long holds are for PIN based and Signature/Credit based transactions. At the institution that I work at when a member pays with thier Debit card and they use there PIN number the transaction takes 60min to clear the account. When the purchase is Signature/Credit based it takes 4320min (72hrs) to clear. I found the station in our area that holds $1.00 and that is where I go. I also make sure I use my PIN number as much as I can to avoid long holds.

Shell Oil does it, and I used my pin, they took $75.00 out of mine. Then my wife went to the same Shell, they held $50.00 from ours again. This is just nuts, I don't care what excuse they use, we will not use Shell Oil again.

Some of the gas stations around here have it posted that they put a hold of $75 on all purchases with debit cards. Some also charge you a fee for using a debit card the same as if you went to a different banks ATM. I had a $1.95 point of purchase processing fee show up once.
Now I always press the credit button when using my debit card since it has a Visa logo on it.

Originally Posted by SPJ

Now I always press the credit button when using my debit card since it has a Visa logo on it.

My debit has the logo as well. But the newer software in the gas pumps can differentiate between credit and debit regardless of the logo and will force you to choose debit if it is a debit card. That is how I decide whether to buy gas at a particular place or not. If it insists that I say it is a debit card and punch in my PIN then I go buy gas somewhere else.