Consumers already frustrated by the high price of gas may also be hit with a couple of nasty surprises at the pump: Their credit cards may turn stingy, imposing limits that leave unfilled tanks, or they may get greedy, "blocking off" more of your credit or debit card limit than needed for a fill-up.
Jeff Lenard, spokesman for the National Association of Convenience Stores, sympathizes. Of the group's 145,000 stores, 80 percent sell gas. "Consumers are already pretty ticked off" over gas prices, he says. "Then they get hit with one or both of these things."
"These things" are:
Credit or debit limits too small for a fill-up
For years, thieves have tested stolen cards at gas stations because they may remain anonymous by paying at the pump. To combat that fraud, stations have imposed limits of $50 to $75. When gas prices were lower, that was no problem. Today's high gas prices cause law-abiding consumers to be cut off in mid-pump.
"Blocking off" more than needed
Card issuers' policies allow merchants to temporarily lay claim to -- "block off" -- a larger-than-needed chunk of consumers' credit limits or debit card balance when the final purchase price is uncertain at the time credit is authorized.
Holding patterns
"Blocks" or "holds" assure merchants -- not just gas stations -- they'll get paid in full in cases when a transaction is authorized before a final amount is owed. It doesn't just happen at the pump. For example, the practice lets a restaurateur accommodate an extra-generous tipper or secures a hotelier against guests suddenly infatuated with the minibar. It applies at gas stations too, because the station doesn't know how much will be pumped when it OKs a sale by credit or debit card.
"If you're running low on funds and only want to pump $20 of gas, your account could be dinged $75, and then a cascade of fees could start," says Lenard. "Guess who benefits from that? Not the convenience store."
Your account could be dinged $75, and then a cascade of fees could start. |
-- Jeff Lenard
National Association of Convenience Stores |
At gas stations, the hold should only last a few moments -- until the final real amount is processed -- but for signature debit transactions, this may take up to three days. Gas stations have even received complaints from customers when the bank has held the money for a week, Lenard says. "When you look at the electronic statement, it looks like the gas station is holding your money. If you pay by PIN debit, that hold should be done instantly. If it takes significantly longer, someone is messing with your money."
Why are holds allowed? Jay Hopkins, a Visa spokesman, says they're needed when cardholders use their cards "in places where the exact amount of a transaction may not be known when the merchant first requests an authorization for a purchase. This feature enables cardholders to take advantage of such services as express or video checkout at hotels, pay-at-the-pump fueling and one-swipe payment at restaurants."
Hopkins also says the payment network has rules set up to prevent consumers from being too far down and out: "To help ensure that holds do not disrupt cardholder access to the funds in their accounts, Visa requires that card issuing financial institutions release all holds within three business days of the authorization request or when the transaction clears, whichever is earlier," he says.
Where consumers can be hurt, though, is that rules are unclear about how much can be blocked off, and how soon the unused portion of credit is "returned" to a consumer. The "blocks" can push consumers over credit or debit card limits, forcing them to pay fees