Using debit card in restaurants

Avatar for skinny42
iVillage Member
Registered: 06-12-2003
Using debit card in restaurants
8
Wed, 11-24-2004 - 3:22pm

Hi Friends,

I've discovered a practice that my bank, Bank of America, is doing that I think people should be aware of.

I used my debit card to pay a restaurant bill last Monday night. The transaction was 40.18 and we tipped in cash. The next day when I went to my checking account online, I noticed that the bank placed a hold in the amount of $48.21, which is exactly 20% more than the amount of my purchase. I first called the restaurant to see if they had made a mistake, but they charged the correct amount. When I called Bank of America, I was told by a customer service guy that they always place a hold on 20% more than your debit in case the restaurant employee goes back and puts a tip on the debit card. They assured me that, when the transaction is actually posted to my account it's for the correct amount. My issue with this is, what if I thought I had that extra $8 available and bounced a check because of it?? I just think this is a shady practice. Anybody else ever had this happen?

On a lighter note, I hope you all have a safe and happy holiday weekend!

Nini

iVillage Member
Registered: 07-26-1999
Wed, 11-24-2004 - 4:23pm

Debit cards seem to work differently in Canada. The only amount that a bank can deduct from your account when you use a debit card is the exact amount you authorize on the transaction when you use the pin pad.

Restaurants are no different. Here many restaurants have debit machines that have an extra step in the pin pad process where you push a Yes or No button to add a tip to your purchase. If you choose yes, then it automatically adds the amount of your tip to the amount of your purchase and you have to select "ok" again to authorize the new total amount. That is the only way a higher amount can be deducted, but you know it's going to happen because you agree to the higher amount when you do the pin pad process.

I think that is a really deceptive practice--if it is a debit purchase, a waiter shouldn't be allowed to go back and add anything to the amount you agreed to. I would be very angry if I ended up with less money than I thought because a waiter added a tip that I didn't authorize to a debit purchase...

iVillage Member
Registered: 04-02-2003
Wed, 11-24-2004 - 4:25pm

This is not a practice done just by the bank. The place of business has something to do with it also. They want to make sure you have enough in your account to cover the tip if added and most of the time it is.

I have found this happens with credit cards also. I got gas once at a place where I almost always use my debit card. On my debit card, it never shows up as a pending transaction, it only shows up when it is posted. When I used my credit card this one time, it place a hold on quite a bit more than my purchase (like $10 extra on a $25 purchase). Not sure why it happened with my credit card and not my debit card.

Kathie

iVillage Member
Registered: 05-10-2004
Wed, 11-24-2004 - 4:42pm
Yes this is a common practice amongst banks & credit unions.

 

iVillage Member
Registered: 03-28-2003
Wed, 11-24-2004 - 6:02pm
Hotels do this too. When my husband and I went on our honeymoon, his aunt paid for our hotel room as her wedding gift to us. Well, turned out she gave them the wrong expiration date, so they asked us to secure the room until they could reach her by telephone, which they did later in the evening. Our card was never charges, but when I went to use the cc for my new glasses, it was rejected. The hold was on my card for over a week!
Avatar for netchickie
iVillage Member
Registered: 03-28-2003
Thu, 11-25-2004 - 7:26pm
Some hotels won't allow the use of debit cards for this very reason. I believe it is more the restaurant than the bank, I use Bank of America and notice that some restaurants only do the exact amount of the bill and some add exactly 20% to the first run. When it actually posts it is always for the amount I charged plus the tip I specified. It just good to keep this practice in mind whenever using your card.

iVillage Member
Registered: 11-03-2003
Thu, 11-25-2004 - 8:36pm

Hey everybody,

I've had this happen with hotels & restaurants, with both debit and credit cards. It is a practice that banks allow because the merchants demand it, even though it is the consumer that pays the price.

For hotels, they demand pre-payment in the form of a credit card, and then they "hold" more just in case you have room service or charge something else to your room......then they can be covered in the event that you skip town without paying for those extras.

For restaurants, you eat, they bring you a bill, you give them your credit/debit card, they ring it up , then you write in the tip and sign, then they go ring it up AGAIN! It really is ridiculous, because by being allowed to "ring it up" again, they could theoretically put in ANY amount they want.

ID theft is on the rise, and we all should try to fight it. Next time you eat out, ask for the tip to be included in your FIRST ticket.....they won't like it, but they CAN do it. Just tell them to add 15% to the bill. They automatically do it ALL THE TIME with large groups. And also insist that they NOT put a hold for even one single penny over the amount of the bill.

I am sorry for such a soap-box tirade on Thanksgiving Day! I just want all of us to stand up for our rights as consumers and not be taken advantage of by merchants!!!

I wish the very happiest of Thanksgivings to everyone here!

Melanie

iVillage Member
Registered: 06-15-2003
Thu, 11-25-2004 - 9:03pm

Hi skinny, I worked for a restaurant chain for many years, and yes it is a bank thing.


They automatically approve for a certain percentage over the check, some banks will charge 15%, some 20%. The restaurant has no control over this.


Like someone else said, gas stations do the same thing. I have noticed that some are actually posting the limits on the pumps.


okeefester3



~okee

(formerly oneandonlyother)

iVillage Member
Registered: 09-22-2003
Mon, 11-29-2004 - 11:53am
That doesn't make sense. A debit comes directly out of your account, why do they need to hold additional money? I would clarify if the restaurant ran your transaction as credit, rather than debit. I worked in a restaurant and they usually run as credit, since you're not able to enter your pin number directly. There's a difference between the two. Also if your debit card is run as credit, a merchant can hold more than the amount of the transaction and their payment might come out of your account and they still can be holding money, therefore you can have UFC in your account. Just another reason to pay in cash.