Reader Has Debit Card Problem

Here is a new one we hadn’t heard about previously with plastic money from GUARDIAN reader Mike:

“I got gas on my debit card at a station on Vista May 13th in the amount of
$30+. When I got to work I checked my online bank transactions and they had put a
hold of four $100 amounts on my account as well as the amount of fuel. I called and
they said they do that with smaller banks and credit unions. They said not to worry
about it that it would drop off tomorrow.”

There is no excuse for this practice regardless of the size of the sponsoring bank. As a frequent traveler, the GUARDIAN is accustomed to a “hold” on rental cars and hotel rooms because there is the potential for additional charges. When a charge is fixed–like at the gas pump we say… “NO DEAL!”

Anyone else had similar experiences?


Here is a logical explanation from GUARDIAN reader Chuck who didn’t invent the internet, but did create some gas pump credit card software:

This is actually called prenoting It used to be 50$. While $100 seems excessive you must realize gas is much more per gallon than it was when 20 years ago when I wrote the software for the pumps.

Here is how it works: a transaction at the pump starts with a prenote to insure that there is enough money in account to pay for ANY size gas tank… then there is a post note that is the actual amount of gas purchased. This is due to the fact that you can’t easily put gas from tank back into the pump if your account is low.

The prenote is not released immediately for several reasons… most common is that there are smaller banks (or just most) that do not have real time transaction processing with the rest of the world’s card system. They deal mostly with a “trust but verify” status on each account.

Comments & Discussion

Comments are closed for this post.

  1. The solution is to use a credit card. Holds do not apply with a credit card to my knowledge. A hold insures the merchant will get his money with a debit payment. People with substantial balances this practice is not a problem but people operating near empty on their cash balance it causes problems.

    Think about the merchants who accept debit cards. If someone with a small balance goes out and buys a bunch of stuff in a short period of time with not enough money to cover what they bought someone gets stuck holding the bag.

    It is a necessary evil in these times when we have dishonest people and folks who have no control over impulse purchases.

  2. I notice a sign on the gas pumps at Jacksons advising of a possible hold on the card account you are using and to contact your bank if there are questions. I really feel that it is unjustified, but I guess the other side of the coin is if it so unjustified and I am unsatisfied then I can pay in cash. It may still be accepted in some stores.

  3. You hit it editor…fraud.

  4. Fred Meyer does the same thing. They put like a $100 hold on your credit card, and if you don’t have that much room, they decline it. That is before you even START pumping gas. This is for if you pay at the pump. Going to the attendant and paying a fixed amount on a CC works just fine.

  5. Costco knows (some how) exactly how much you can dispense with a card. I had around $37 and change in my checking account once, Went to Costco for gas and it stopped pumping at the exact penny. Kinda cool to watch the dial slow down as it got close to the amount you can use.

  6. If everyone had the same size tank, bought the same grade or type of fuel, then it wouldn’t be necessary.

    Seems there are other options for people who don’t want to be “defrauded”. One could ride the bus or a bike or use a credit card or use a dedicated gas card or pay in advance and bypass the card reader.

    The card reader doesn’t know in advance how much you’re going to pump or what you’re going to pump.

  7. I would never use a debit card. Since my checking account pays no interest I don’t keep much money there and wouldn’t want to keep track of every transaction my spouse and I make from day to day. People who have joint accounts can get into a lot of trouble. We don’t use ATM accounts either. Use checks, credit cards or cash.

  8. I can understand the stations’ reasoning, but I still think it’s wrong. That extra money isn’t theirs, so they have no right to hold onto it.
    If you have $150 in your debit account, pump in $20 worth of gas, then pull in at a store down the street a ways and try to buy a $100 item, the machine there will block the sale because your account will show as not having enough money.

    If I write you a check for $20 and you then demand $100 as a deposit to ensure that my $20 check is good, you’re likely to end up with a fat lip and a sore jaw.

  9. Anyway, why doesn’t the machine just put a hold on the exact amount for the gas you pumped into your tank?
    The amount taken is recorded immediately. Still sounds like they’re playing games that would get them pummeled if they did it in person.

  10. The problem is the DEBIT transaction. As a human being, you should NEVER use your PIN number unless you are withdrawing cash from an ATM.
    Debit transactions are EFT’s (electronic fund transfers) that are unregulated and unmonitored by any third party. By using your PIN, you are giving the merchant (and their bank processor) direct access to your account, completely unregulated. If they choose to steal all your money, your only recourse is to sue them one-on-one, probably in Delaware! Its the wild, wild west in debit network land, and your account is the saloon for processors and merchants to use and abuse. The only safe transaction is a credit transaction, where you have the protection of a third party (Visa/MC) should any funny business arise from the merchant or processor. The big companies try to trick us into using our PIN so they can take Visa/MC out of the transaction, thus eliminating any protection you may have against them.
    Live and learn!

  11. I think the hold a merchant can put on your account is BULL! I have actually had checks bounce because of this practice. And on top of all of that my bank charged me for a bounced check fee. I have no way of knowing that a merchant put a hold on my money till it is too late. I think this should be outlawed. After all it is my money not theirs!

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