If I Win the Lottery… I’m Filling My Gas Tank

We’ve all heard the jokes. Economic headaches and heartaches abound during downturns, and we’ve all seen them. Paying more and getting less has become the status quo. A friend and business associate of mine was buying another truck for his company. Not your average truck mind you, but a $75k truck able to haul large chunks of marble and stone for monuments. Still he had been at his bank some time, had more than enough to buy the truck outright, and his business was profitable. To get a loan for the truck, the bank required 3 years of financials for the business, and 3 years of financials for him as an individual. Really? Blessed beyond the average Joe, he told them what he thought of that (politely, but firmly), ended his business dealings there, and bought the truck out right. Oh, to have that kind of freedom! Still, my dad always said to, ‘Vote with your feet’, which this man did by going to another bank.

Well in my world of plastic driven businesses and how they accept credit and debit cards, a new thing has hit the fan making our lives so much easier (sarcasm) during these salad days: when you use your debit card at the pump (ie: to get gas), and you enter your PIN number the bank may reserve $100 from your account. By saying ‘reserve’, what I mean is to lock up $100 and hold onto it for a couple of days. This takes some mild explaining…

Let’s say you go out to dinner and your meal cost with tax exactly $100. You give the waiter your plastic be it credit or debit, and he swipes it on the credit card terminal in the back and enters in $100. Well he may have entered in $100, but your card is actually billed for $120. The extra 20% is for the tip. Now don’t freak out, because it doesn’t stay there, because here is what then happens. The waiter brings you your receipt stating $100 and leaves a line for the tip. You write in $15 for the tip, sign it and give it back. At the end of the shift, the waiter enters the tip amount for $15 (he can do that in a system set up for restaurants), and closes the ticket out. The extra $5 is then returned to your card. Well, not returned as much as released. This is because it put a hold on the extra $20 and waited until the ticket was closed for the final amount.

The same thing often happens in hotels. If a room is $80, they charge in advance, because if you can’t pay the next day the hotel can’t take back the service they have provided. Letting someone sleep in a room is not like selling a car. Stop paying for the car and they take it back. Can’t pay for the room and the hotel is out of luck. Thus hotels bill in advance and are actually reserving the money by locking it up on the card. The money is technically still there, but you can’t spend it.  The next day when you leave they get the money and you get back an overages. Make sense?

Here’s the issue (and this came directly from a bank, not MC/Visa): If you go to get gas, pay with your debit card, and enter your 4-digit PIN number, your bank might reserve $100 on your debit card (that is to say your checking account) that you can now, no longer use until the system clears it which can take up to 2 business days (or longer depending on the gas station). This is because what normally happens when you use plastic to pay at the pump is that your card is authorized for a $1 transaction to make sure it’s good, then you pump your gas, and when you return the handle your card is billed the remaining amount. The problem is that since gas is so expensive, and some gas stations have been left in the lurch, some banks have taken to reserving a full $100 to make sure the station gets paid and then just like the waiter and the tip, the rest is returned to your card …just not immediately. The gas station like a normal business closes out at day’s end and it may take up to 2 business days to release the remaining funds back to your card.

For now the path to avoid this is simple: Don’t enter your PIN number. Just select “Credit”.

This entry was posted in American Express, Credit Card, Credit Card Terminal, Debit Card, Discover, MasterCard, POS, Technical Support, Visa. Bookmark the permalink.

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